5 ms·

It's contrarian article: 1. In many tech area: networks effects and zero marginal costs creates winner(s) take all. In that sense it make sense to follow the w

It's contrarian article: 1. In many tech area: networks effects and zero marginal costs creates winner(s) take all. In that sense it make sense to follow the winners as previously investors underestimated how big winner could be (e.g. Amazon, Google, Facebook, Apple). 2. Everywhere else: betting on underdogs that are mispriced is much better strategy in long-run. See Warren Buffet got huge returns by looking at fundamentals, but his strategy would not work well in tech.

fancyfredbot 6y ago
I think the point was not that you should invest in Yahoo (for example), it was that you should only invest in Google if it is underpriced.
- ptero 6y ago
  In many cases in tech knowing something is underpriced is only possible after underpricing is gone.
baxtr 6y ago
Exactly. Because if not, why isn't bing on par with google by now?
- Retric 6y ago
  Bing does seem to be on a slow upward trend: https://www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/ https://www.statista.com/statistics/216573/worldwide-market-... It’s still only 6% of global search vs 86% for google.
  - kohtatsu 6y ago
    I wonder how much of that is from dark patterns in Edge.
    - stormdennis 6y ago
      Do DDG searches count in Bing's percentage?
      - chris_f 6y ago
        No inside knowledge, but it wouldn't make sense for Bing not to count searches from all of the below as part of their total number. - DuckDuckGo - Ecosia - Qwant - OneSearch - Search Encrypt - Swisscows - etc.
      - mrslave 6y ago
        I thought that DDG used Yahoo! Search under the hood exclusively (because... why use more than one?). It turns out that it is a complex mix of resources from multiple partners[0]: > In July 2016, DuckDuckGo officially announced the extension of its partnership with Yahoo! that brought new features to all users of the search engine, including date filtering of results and additional site links. It also partners with Bing, Yandex, and Wikipedia to produce results or make use of features offered. The company also confirmed that it does not share user information with partner companies, as has always been its policy. [0] https://en.wikipedia.org/wiki/DuckDuckGo https://en.wikipedia.org/wiki/DuckDuckGo
        partdavid 6y ago
        That's Bing anyway.
        runarb 6y ago
        One way to quickly find out what underlying provider a metasearch engine uses is to search for "my user agent". You will then normally see the user agent of the crawler in the result snippet. Doing this on DuckDuckGo: https://duckduckgo.com/?q=my+user+agent&t=hk&ia=answer https://duckduckgo.com/?q=my+user+agent&t=hk&ia=answer , reviles http://www.bing.com/bingbot.htm http://www.bing.com/bingbot.htm in the snippet for whatsmyuseragent.org .
- Spooky23 6y ago
  Part of betting is about the payout. Had Bing bested Google, that would have had a significant impact on Microsoft stock price. Horse racing is a better place to make the point. Risking your bets on likely winners has a low payout overall — underdogs have a reward that batter aligns with risk.
  - IgorPartola 6y ago
    Horse racing has some really interesting mechanics not present here. The top three bets are win, place, and show. Win means the horse game in first. Place means it came in second OR first. And show means third OR second OR first. So one popular bet is to put money on the favorite to place or show. Even if an underdog wins the race, you still make some money. I don’t know of where else you have such mechanics.
    - Spooky23 6y ago
      Even more interesting is the Exacta and Trifecta bets, where you bet on order. I worked with a pretty hardcore handicapper. He would plan for certain races for weeks and look at training and other factors. Basically, he'd cover the Saratoga meet and pair favorites a longshots and come out ahead enough to stay ahead. You could tell how well he did by the toys purchased in the Fall. Good year, a truck, bad year a laptop.
- 6510 6y ago
  Personally I avoid everything Microsoft because of the many unfixed bugs in Windows. Bing is a fine search engine specially compared to desktop search but it reminds me to much of all the weird experiences.
eru 6y ago
Warren Buffet also made good money betting an underpriced top dogs. Most famously perhaps his investment in Coca Cola in 1988. It was his single largest holding back then, and still is one of his largest today. In some sense, for Warren Buffet a mispriced top dog is much more valuable, because he can put more capital to work.
ralfd 6y ago
The winner was Microsoft though. Apple was (is?) the mispriced underdog with 5% market share.
- Flockster 6y ago
  Only if you are excluding their strong position in the smartphone and tablet market. (Not to mention increasing services and headphones (AirPods and Beats)).
  - caymanjim 6y ago
    For sure. Apple's laptops, while incredibly expensive and profitable, can effectively be considered loss-leaders. Apple is all about brand buy-in, services, warranty sales, etc. Over 50% of their profit is from the iPhone alone. Mac only accounts for about 10% of profit. Even with high retail price, margins are low.
    - itsoktocry 6y ago
      >Apple's laptops, while incredibly expensive and profitable, can effectively be considered loss-leaders. Things that are incredibly profitable are by definition not loss leaders. >Even with high retail price, margins are low. Is this true? Being as how one can purchase a similarly spec'd laptop for a fraction of the cost of a MBP makes me skeptical. I'd assume they're killing it on their laptops.
      - rbrtl 6y ago
        > one can purchase a similarly spec'd laptop for a fraction of the cost of a MBP Is this true? Do you have a spec sheet? My own research suggests for about the last 5 years Apple hardware has been pretty competitive.
        gjulianm 6y ago
        I'm on you with this. These comparisons are usually made only looking at CPU, RAM and disk, without taking into account that there's quite a lot more to a laptop. Once you take into account the rest of specs, similar high-end laptops are on the same ballpark of cost.
roenxi 6y ago
> zero marginal costs creates winner(s) take all Tech is still young, and we shall see. Google made around $16 billion dollars in 2014. That means an economic rationalist is willing to pay everyone on earth something in the order of $2 dollars to use their service rather than Google's. It isn't too late to discover that the equilibrium position is we get paid to use certain search engines or social networks. That'd drive the marginal cost up.
- buzzerbetrayed 6y ago
  Didn’t Microsoft essentially pay people to use Bing at the start with their “2 Microsoft reward points per search” policy? I feel like I remember doing that for about a week.
  - jakear 6y ago
    This is still available.

fancyfredbot 6y ago

I think the point was not that you should invest in Yahoo (for example), it was that you should only invest in Google if it is underpriced.

ptero 6y ago
In many cases in tech knowing something is underpriced is only possible after underpricing is gone.

baxtr 6y ago

Exactly. Because if not, why isn't bing on par with google by now?

Retric 6y ago
Bing does seem to be on a slow upward trend: https://www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/ https://www.statista.com/statistics/216573/worldwide-market-... It’s still only 6% of global search vs 86% for google.
- kohtatsu 6y ago
  I wonder how much of that is from dark patterns in Edge.
  - stormdennis 6y ago
    Do DDG searches count in Bing's percentage?
    - chris_f 6y ago
      No inside knowledge, but it wouldn't make sense for Bing not to count searches from all of the below as part of their total number. - DuckDuckGo - Ecosia - Qwant - OneSearch - Search Encrypt - Swisscows - etc.
    - mrslave 6y ago
      I thought that DDG used Yahoo! Search under the hood exclusively (because... why use more than one?). It turns out that it is a complex mix of resources from multiple partners[0]: > In July 2016, DuckDuckGo officially announced the extension of its partnership with Yahoo! that brought new features to all users of the search engine, including date filtering of results and additional site links. It also partners with Bing, Yandex, and Wikipedia to produce results or make use of features offered. The company also confirmed that it does not share user information with partner companies, as has always been its policy. [0] https://en.wikipedia.org/wiki/DuckDuckGo https://en.wikipedia.org/wiki/DuckDuckGo
      - partdavid 6y ago
        That's Bing anyway.
      - runarb 6y ago
        One way to quickly find out what underlying provider a metasearch engine uses is to search for "my user agent". You will then normally see the user agent of the crawler in the result snippet. Doing this on DuckDuckGo: https://duckduckgo.com/?q=my+user+agent&t=hk&ia=answer https://duckduckgo.com/?q=my+user+agent&t=hk&ia=answer , reviles http://www.bing.com/bingbot.htm http://www.bing.com/bingbot.htm in the snippet for whatsmyuseragent.org .
Spooky23 6y ago
Part of betting is about the payout. Had Bing bested Google, that would have had a significant impact on Microsoft stock price. Horse racing is a better place to make the point. Risking your bets on likely winners has a low payout overall — underdogs have a reward that batter aligns with risk.
- IgorPartola 6y ago
  Horse racing has some really interesting mechanics not present here. The top three bets are win, place, and show. Win means the horse game in first. Place means it came in second OR first. And show means third OR second OR first. So one popular bet is to put money on the favorite to place or show. Even if an underdog wins the race, you still make some money. I don’t know of where else you have such mechanics.
  - Spooky23 6y ago
    Even more interesting is the Exacta and Trifecta bets, where you bet on order. I worked with a pretty hardcore handicapper. He would plan for certain races for weeks and look at training and other factors. Basically, he'd cover the Saratoga meet and pair favorites a longshots and come out ahead enough to stay ahead. You could tell how well he did by the toys purchased in the Fall. Good year, a truck, bad year a laptop.
6510 6y ago
Personally I avoid everything Microsoft because of the many unfixed bugs in Windows. Bing is a fine search engine specially compared to desktop search but it reminds me to much of all the weird experiences.

eru 6y ago

Warren Buffet also made good money betting an underpriced top dogs. Most famously perhaps his investment in Coca Cola in 1988. It was his single largest holding back then, and still is one of his largest today. In some sense, for Warren Buffet a mispriced top dog is much more valuable, because he can put more capital to work.

ralfd 6y ago

The winner was Microsoft though. Apple was (is?) the mispriced underdog with 5% market share.

Flockster 6y ago
Only if you are excluding their strong position in the smartphone and tablet market. (Not to mention increasing services and headphones (AirPods and Beats)).
- caymanjim 6y ago
  For sure. Apple's laptops, while incredibly expensive and profitable, can effectively be considered loss-leaders. Apple is all about brand buy-in, services, warranty sales, etc. Over 50% of their profit is from the iPhone alone. Mac only accounts for about 10% of profit. Even with high retail price, margins are low.
  - itsoktocry 6y ago
    >Apple's laptops, while incredibly expensive and profitable, can effectively be considered loss-leaders. Things that are incredibly profitable are by definition not loss leaders. >Even with high retail price, margins are low. Is this true? Being as how one can purchase a similarly spec'd laptop for a fraction of the cost of a MBP makes me skeptical. I'd assume they're killing it on their laptops.
    - rbrtl 6y ago
      > one can purchase a similarly spec'd laptop for a fraction of the cost of a MBP Is this true? Do you have a spec sheet? My own research suggests for about the last 5 years Apple hardware has been pretty competitive.
      - gjulianm 6y ago
        I'm on you with this. These comparisons are usually made only looking at CPU, RAM and disk, without taking into account that there's quite a lot more to a laptop. Once you take into account the rest of specs, similar high-end laptops are on the same ballpark of cost.

roenxi 6y ago

> zero marginal costs creates winner(s) take all Tech is still young, and we shall see. Google made around $16 billion dollars in 2014. That means an economic rationalist is willing to pay everyone on earth something in the order of $2 dollars to use their service rather than Google's. It isn't too late to discover that the equilibrium position is we get paid to use certain search engines or social networks. That'd drive the marginal cost up.

buzzerbetrayed 6y ago
Didn’t Microsoft essentially pay people to use Bing at the start with their “2 Microsoft reward points per search” policy? I feel like I remember doing that for about a week.
- jakear 6y ago
  This is still available.