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jerryking : underwriting   5

What You Need to Know to Pick an IPO
April 7, 2019 | WSJ | By Andy Kessler.
Dig up dirt on the competition and board members, and buy to hold long-term.......How do you know which IPOs to buy? No, not to trade—you’d never get it right. Lyft priced at $72, traded at $85 on its first day, then closed at $78, only to fall to $67 on its second day. It’s now $74. I’m talking about buying and holding for a few years. Yes I know, how quaint.

The trick is to read the prospectus. What are you, crazy? That’s a couple hundred pages. Well, not the whole thing. But remember, where the stock trades on its first day is noise....... So understanding long-term prospects are critical. Here are a few shortcuts.

(1) First, glance at the underwriters along the bottom of the cover. On the top line are the banks putting their reputation on the line. If the one on the far left is Goldman Sachs , Morgan Stanley or JPMorgan , you’re probably OK.
(2) open the management section and study the directors. Forget the venture capitalists or strategic partners with board seats—they have their own agendas. Non-employee directors are the ones who are supposed to be representing you, the public investor. And their value depends on their experience.
(3) OK, now figure out what the company does. You can watch the roadshow video, look at prospectus pictures, and skim the offering’s Business section. Now ignore most of that. Underwriters are often terrible at positioning companies to the market.......when positioning companies, only three things matter: a monster market; an unfair competitive advantage like patents, algorithms or a network effect; and a business model to leverage that advantage. Look for those. If you can’t find them, pass. Commodities crumble........read the Management’s Discussion and Analysis. Companies are forced to give detailed descriptions of each of their sectors and products or services. Then flip back and forth to the Financials, looking at the items on the income statement and matching them up with the operations being discussed. Figure out what the company might look like in five years. And use my “10x” rule: Lyft is worth $25 billion—can they make $2.5 billion after-tax someday? Finally there’s the Risk section, which is mostly boilerplate but can contain good dirt on competition.
(4) Put the prospectus away and save it as a souvenir. Try to figure out the real story of the company. Do some digging.
(5) My final advice: Never, ever put in a market order for shares on the first day of an IPO.
10x  advice  algorithms  Andy_Kessler  boards_&_directors_&_governance  business_models  competitive_advantage  deception  due_diligence  howto  IPOs  large_markets  long-term  Lyft  network_effects  noise  patents  positioning  prospectuses  risks  stock_picking  think_threes  Uber  underwriting  unfair_advantages 
april 2019 by jerryking
Buyer demand for recall cover exceeds supply
July 28, 2002 | Business Insurance | Sally Roberts.

Risk managers seeking product recall coverage for food and beverages are finding a market with fewer players, smaller capacity and higher prices. The combination of the soft market and an increase in frequency and severity of product recall losses over the past few years - particularly in the meat and poultry industry - has sent many reinsurers and insurers running from the market. As a result, few underwriters remain, which leaves many food and beverage manufacturers and retailers in need of coverage but unable to find adequate limits and prices.
product_recalls  insurance  underwriting  frequency_and_severity 
june 2012 by jerryking
I advise the families of kidnap victims
20 Aug. 2011 | Financial Times pg. 2. | Sarah Duguid.

The kidnap and ransom industry, or K&R, is traditionally made up of three components: a security team, an underwriter and a broker. It was a few years after my interview that I realised that I could add a fourth dimension: psychology.

Kidnap is a uniquely human crime that relies on the fact that we are social -animals. It's immensely traumatic for the victim to be isolated, and their family -suffers too. I could see a gap in the market: if companies were prepared to pay for physical security for their employees, they would be willing to pay for psychological support as well. So, I called some brokers at the company where I failed The Wait and told them my idea. They loved it, and they took me on as a sub-contractor.
career_paths  security_&_intelligence  think_threes  JCK  psychologists  underwriting  psychology  kidnappings 
january 2012 by jerryking
Obsessed to a Fault - WSJ.com
APRIL 18, 2006 | WSJ | By LIAM PLEVEN. GeoVera, among the
largest sellers of quake insurance to homeowners on the open market in
California, is trying to buck the trend and make a profit at the same
time. About 40% of its business -- worth roughly $100 M in annual
premiums -- comes from selling quake insurance there. "What sets us
apart is our focus on catastrophe underwriting. That's all we do,"...The
company is a case study in the broader economics of disaster
insurance...GeoVera executives believe they can use their brains -- by
devouring data on the homes it insures, and keeping a close eye on the
location of its customers and the type of coverage they're buying -- to
make the company profitable. They analyze mounds of information about
the 115,000 homes the company insures: What are they made of? When were
they built? What types of foundations do they stand on? How solid is the
soil beneath them? Are they on a slope? How close are they to
California's 200-odd active faults?
catastrophes  insurance  disasters  GeoVera  underwriting  data_driven  risk-management  competingonanalytics  massive_data_sets  haystacks 
october 2010 by jerryking
Top entrepreneurs talk about how to keep your customers, and find opportunities, in tough economic times
MAY 11, 2009 | Wall Street Journal | 5-person panel discussion
moderated by Gwendolyn Bounds. Wendy questions the group of
entrepreneurs under the theme "What’s the secret of being an
entrepreneur in these hard economic times?"....trying to stand out from the crowd. I think the best one we did, which we launched when it was about six degrees outside, was a marketing campaign that says, what this town could really use right now is a good bowl of chicken soup.

Chicken soup is one of the great comfort foods in every single culture, and we think that we need to be selling comfort right now. And chicken soup also is a way to define the restaurant. .....people are always looking for joy. They’re always looking to be connected. They’re always looking to feel generous. So Danny’s insight, which is so brilliant, is for the cost of a bowl of chicken soup, you get to feel generous. You get to feel connected. You get to feel part of the community. That story is easy to tell because we all have a memory of chicken soup growing up.......Marketing is not this blank check that lets you sell whatever you want. The challenge that we’re facing, as we enter this serious recession, is not how do we stop doing everything. It’s how do we create experiences and stories, interactions, that don’t necessarily cost a lot of money, but create value for everyone concerned.......I think that for an entrepreneur who is interested and passionate about creating something in the technology space, whether it’s a device or a service or a platform, this is an extraordinary time, because there’s an enormous lull in the Fortune 1000 with respect to innovation and new ideation. ........on the equity side, where they don’t have these types of opportunities, we look for innovative companies that actually create a disruption. The simple thing is, if you can offer the environment where we can lower your costs and improve quality, it’s a no-brainer.

But in general, we have to make certain that these entrepreneurs really know the industry, they know the customers, they know the competition and most importantly, they know thyself, they know what they can and cannot do.

So it’s interesting when you play across the capital structure, how you bifurcate this, and I think it all has to do with innovation and creating something that doesn’t exist, that fits a pent-up need.
disruption  self-awareness  Gwendolyn_Bounds  Seth_Godin  Danny_Meyer  entrepreneur  economic_downturn  hard_times  attention  innovation  ideation  ideas  underwriting  geographic_ingredient_branding  Buy_American  craftsmanship  soups  marketing  storytelling  lingerie  intimate_apparel  idea_generation  emotional_connections  small_batch  generosity  joy 
may 2009 by jerryking

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