3 ms·

This sounds slightly like a no true Scotsman arguement to me. I'm sure you could find some none pure tech plays that are successful. Plus companies like Uber d

This sounds slightly like a no true Scotsman arguement to me. I'm sure you could find some none pure tech plays that are successful. Plus companies like Uber don't exactly own assets, its more tech company than not. For all the promise of the Web, people live in the real world, that's where the money is to be made, mega tech companies are necessarily going to live at the interface.

ethbro 7y ago
The irony is that essentially all of SoftBank's playbook is ripped from Buffett. Except Buffett did it with non-tech, capital-heavy companies. Where it arguably works a lot more reliably.
- benj111 7y ago
  "SoftBank's playbook is ripped from Buffett" How so?
  - ethbro 7y ago
    Buffett's hypothesis (as I understand it) boiled down to (1) find successful businesses that are capital-starved, (2) pair them with businesses which naturally generate float (e.g. insurance), under a corporate umbrella, (3) invest the float in those businesses and thereby beat market returns (by only selecting quality businesses, and having the ability to provide mentorship / experienced leadership).
    - benj111 7y ago
      Ok fair enough, that's more late Buffett. I don't think he invests so much in capital starved businesses, more he just uses the cash generated by eg insurance to invest in high quality businesses. I suppose the difference here is the high quality part. Wework doesn't seem to have much of a moat, have particularly good governance, or have much of a track record of anything.
    - prolepunk 7y ago
      What does 'generate float' mean as a financial term?
      - sambroner 7y ago
        It basically means "hold cash", so visa, stripe, insurance companies etc. all get cash from customers, hold it for a period of time, and distribute it to customers. Holding it for a period of time is "generating float." For many of these companies the float is a large multiple of the profit.

ethbro 7y ago

The irony is that essentially all of SoftBank's playbook is ripped from Buffett. Except Buffett did it with non-tech, capital-heavy companies. Where it arguably works a lot more reliably.

benj111 7y ago
"SoftBank's playbook is ripped from Buffett" How so?
- ethbro 7y ago
  Buffett's hypothesis (as I understand it) boiled down to (1) find successful businesses that are capital-starved, (2) pair them with businesses which naturally generate float (e.g. insurance), under a corporate umbrella, (3) invest the float in those businesses and thereby beat market returns (by only selecting quality businesses, and having the ability to provide mentorship / experienced leadership).
  - benj111 7y ago
    Ok fair enough, that's more late Buffett. I don't think he invests so much in capital starved businesses, more he just uses the cash generated by eg insurance to invest in high quality businesses. I suppose the difference here is the high quality part. Wework doesn't seem to have much of a moat, have particularly good governance, or have much of a track record of anything.
  - prolepunk 7y ago
    What does 'generate float' mean as a financial term?
    - sambroner 7y ago
      It basically means "hold cash", so visa, stripe, insurance companies etc. all get cash from customers, hold it for a period of time, and distribute it to customers. Holding it for a period of time is "generating float." For many of these companies the float is a large multiple of the profit.