Explore the four types of intangible assets that drive digital businesses in this insightful Tech Strategy Podcast. Gain a deeper understanding of the role and value of these assets in today’s digital landscape.
Category Archives: Valuation (Question 3)
Valuing Amazon (Part 1): The Problem of Intangible Assets, ROIC and RONIC (Tech Strategy – Daily Article)
Key take-aways for this article: The key to valuation is estimating growth, ROIC and RONIC. This is difficult for digital companies because of the opacity of intangible assets and investments. In Part 2, I will give you frameworks for taking apart intangible assets in digital companies. *** I am in Kuala Lumpur this week, writing […]
My Valuation for Microsoft (Tech Strategy – Podcast 148)
Delve into Jeff Towson’s Podcast 148, where he provides a comprehensive valuation for Microsoft and its tech strategy. This episode offers expert insights into the tech giant’s future, making it a must-listen for tech enthusiasts and investors alike. Tune in to understand Microsoft’s position in the market and potential growth opportunities.
9 Rules for Valuation of Digital Businesses (Tech Strategy – Daily Article)
I’ve covered three topics that relate to digital valuation: DCF Discount rates and Cost of Capital Growth, ROIC / RONIC and value Plus I did an aside on Seth Klarman and his counter-strategy to growth investing. Seth Klarman and When to Ignore Growth in Digital (Asia Tech Strategy – Daily Lesson / Update) I thought […]
Growth, ROIC / RONIC and Growth + Sales in Digital Valuation (Tech Strategy – Podcast 102)
Growth, ROIC, and growth+sales are all important factors to consider when valuing a digital business. Growth is important because it shows that the business is expanding and has the potential to generate more revenue in the future. ROIC is important because it shows how efficiently the business is using its capital. Growth+sales is important because it shows how much revenue the business is generating from each new customer.
An Intro to Growth and “Birds in the Bush” in Digital Valuation (Tech Strategy – Daily Article)
This is my third article on digital valuation. In Part 1, I talked about DCF – and where it works and where it doesn’t. In Part 2, I talked about the discount rate, which is a particularly inaccurate factor. And that brings me to Part 3, which is about growth – and when it creates […]
An Intro to Discount Rates and Cost of Capital for Digital Valuation (Tech Strategy – Daily Article)
In podcast 101 (Why DCF Sucks for Digital Valuation), I went through how I use DCF for digital valuation. And I basically argued that much of DCF thinking is a ridiculous attempt at a precision that is not actually possible. As an example, I talked about how projecting my weight vs. my happiness into the […]
Why DCF Sucks for Digital Valuation. (Tech Strategy – Podcast 101)
Discounted cash flow (DCF) is a common method for valuing businesses. However, DCF is a poor method for valuing digital businesses. This is because digital businesses are characterized by rapid growth, unpredictable cash flows, and network effects. As a result, the assumptions underlying DCF are not met, and the resulting valuations are often inaccurate.
An Intro to Digital Valuation (Tech Strategy – Daily Article)
I have been expanding from digital strategy to digital valuation as a topic. I recently summarized (briefly) how I do valuation long hand (i.e., pen and paper) with one form. That was in: Valuation Like Warren Buffett in 1 Slide (Asia Tech Strategy – Daily Lesson / Update) But the relevant slide from that article […]
Valuation Like Warren Buffett in 1 Slide (Tech Strategy – Daily Article)
I have mentioned a few times on the podcast that I use a one page sheet to do an initial estimate for valuation. I got asked about that today so I thought I would send it out. However… I am not a hedge fund or other such analyst. I do not spend my days updating […]