3-Bullet Sunday (Great Companies are Forged in Crisis, A Few Things We Learned, & The Platform Delusion)

Netflix Deep-Dive incoming!

Dear Compounders,

Netflix share price plummeted over 40% since its latest earnings and we have seen fund managers such as Bill Ackman of Pershing Square taking a sizeable stake in the company.

In the next research report, I will go through Netflix business model, future growth, risk and its valuations.

Gain access to the upcoming Netflix research and all past research reports by becoming a paid member today!

---

I. Great Companies are Forged in Crisis

This article reminded me of my time in California, where my guide explained to me the importance of forest fires.

Hmm..?

This seems counterintuitive to me at first as well. But he went on to explain that the fire removes low-growing underbrush, cleans the forest floor of debris, opens it up to sunlight, and nourishes the soil.

In other words, this reduces competition for nutrients allows established trees to grow stronger and healthier.

The same goes for companies. Every crisis paves the way for established companies to strive.

In this article, Ensemble Capital shares the traits of companies that are likely to emerge stronger.

👉Read Here: Great Companies are Forged in Crisis

During March of 2020, I too was hunting for companies that were likely to emerge stronger from the COVID-19 crisis. In this article, I highlight the metrics I use to look for companies that were going to survive and likely to emerge stronger.

👉Read Here: How to Identify Companies that Will Emerge Stronger after COVID-19

---

II. A Few Things We Learned

Every quarter, Octahedron Capital will publish a slide deck on stuff they learned.

It’s a quick way to go through the key points highlighted during the earnings call of numerous internet companies to have a pulse on the bigger picture.

This quarter’s slide covers:

• Digital Advertising

• Gaming & Content

• Payments & Fintech

• On-Demand & E-Commerce

• Software

---

III. The Platform Delusion

This book was recommended to me by several readers and so I decided to give a read.

And boy… was it helpful in explaining the differences, strengths and weaknesses of the various types of platform.

All tech companies like to describe their business models with buzzwords such as platform, flywheel effect and the likes nowadays.

Because they know investors are attracted to these words like bees to honey. A true platform would have a winner-take-most dynamics and will generate handsome returns.

But how many of them truly have a competitive advantage that are durable and how many of them are faking it?

The Platform Delusion does a great job in explaining the patterns to spot.

Till next week!

Thomas Chua

Want to gain access to in-depth research reports on high-quality growth companies? Become a Steady Compounding member by clicking here!