I don't normally do this, but this randomly (and luckily) hit #1 on HackerNews today and you said we can share some of our own writing - so thought I would share as I think it is relevant to your readers:
Title: Suppose I Wanted to Kill a Lot of Pilots: The history of "thinking backwards"
Selected Quote: "Believing he was on to something, he got a little excited and sent Joseph Stalin a letter in 1948 criticizing the lack of innovation within the Soviet system. This earned him a political prisoner title and a 25-year sentence in the Gulag Archipelago.
Fortunately, Stalin died.
In addition to the many other positive outcomes that his death brought about, Altshuller was released after four years and went on to become a science fiction writer while developing his innovative engineering theories. These theories began to gain popularity in the 1970s as problem-solving tools."
I think cigarette companies are a good past example of a short thesis that didn't play out, although I'm not exactly sure if it was really a popular short thesis in the 90s - more that there was great uncertainty about the future of the industry. IIRC, they had this massive settlement with the states and to pay for it they were effectively granted a cartel so they could raise prices, and their stocks have done fine even though smoking is down considerably.
I think what Rubenstein observes is often more the rule than the exception. If the economics of an industry stay intact or improve, that will probably offset any volume decline for a long time. For example Netflix has done well but the cable networks have not done that badly yet (not great, but not *that* badly).
I also think it's interesting that the conventional wisdom has started to swing around that regulation usually entrenches incumbents, who have the scale to deal with it. I wonder if we get more intelligent regulation as a result or if nothing changes.
Someone sent me this by John Hempton which makes a similar point about shorting Kodak in 1991. http://brontecapital.blogspot.com/2009/12/kodak-bill-gates-and-efficient-markets.html?m=1
I don't normally do this, but this randomly (and luckily) hit #1 on HackerNews today and you said we can share some of our own writing - so thought I would share as I think it is relevant to your readers:
https://newsletter.butwhatfor.com/p/invert-always-invert-avoid-failure
Title: Suppose I Wanted to Kill a Lot of Pilots: The history of "thinking backwards"
Selected Quote: "Believing he was on to something, he got a little excited and sent Joseph Stalin a letter in 1948 criticizing the lack of innovation within the Soviet system. This earned him a political prisoner title and a 25-year sentence in the Gulag Archipelago.
Fortunately, Stalin died.
In addition to the many other positive outcomes that his death brought about, Altshuller was released after four years and went on to become a science fiction writer while developing his innovative engineering theories. These theories began to gain popularity in the 1970s as problem-solving tools."
Thread on Maimonides https://mobile.twitter.com/ZoharAtkins/status/1410612795712802822
I think cigarette companies are a good past example of a short thesis that didn't play out, although I'm not exactly sure if it was really a popular short thesis in the 90s - more that there was great uncertainty about the future of the industry. IIRC, they had this massive settlement with the states and to pay for it they were effectively granted a cartel so they could raise prices, and their stocks have done fine even though smoking is down considerably.
I think what Rubenstein observes is often more the rule than the exception. If the economics of an industry stay intact or improve, that will probably offset any volume decline for a long time. For example Netflix has done well but the cable networks have not done that badly yet (not great, but not *that* badly).
I also think it's interesting that the conventional wisdom has started to swing around that regulation usually entrenches incumbents, who have the scale to deal with it. I wonder if we get more intelligent regulation as a result or if nothing changes.
I'm still not sure what Scale's like behind the scenes. Is it just an absolute army of low-paid contractors, or is it actually AI/machine learning?
Thoughts on an investment framework
https://gurusundaram.substack.com/p/a-framework-to-analyse-understand