I’ve heard it said that in its early days the consumer internet was treated as another place to replicate tried-and-true practices from the offline world. Newspapers and magazines were thriving under a hybrid subscription and ad-based model, so it made sense that even as it collected ad revenue from service providers, Angie’s List charged consumers […]
In his seminal paper The Nature of the Firm, Ronald Coase posits that in cases where it is difficult to reliably procure labor or draft and enforce contracts that unambiguously cover the full scope of future activities, a firm will handle production itself rather than rely on arms-length market transactions. For example, hiring freelancers to […]
During the mid/late-90s, electronic trading networks eSpeed (acquired by NASDAQ) and BrokerTec (acquired by NEX, which was then acquired by CME) rolled out central order limit booking (CLOB) for the inter-dealer trading of US Treasuries. Today, more than 80% of dealer-to-dealer Treasury volumes are electronic, the overwhelming majority of which is executed via CLOB.The dealer-to-client […]
I recently did an interview with my friend @LibertyRPF. It will serve as a substitute for my 2020 year-end review since it contains everything I wanted to say (and more). With permission from @LibertyRPF, I have reproduced the interview below. You can access the original here. Interview with David Kim a.k.a. Scuttleblurb 𝕊𝕡𝕖𝕔𝕚𝕒𝕝 𝔼𝕕𝕚𝕥𝕚𝕠𝕟 #𝟙 Scuttleblurb is one of […]
Banks, regulators, and fixed income investors rely on Moody’s and S&P to provide a consistent and standardized metric of credit risk across names and over time. As I explained in The Self-Reinforcing Standards Moat:…ratings underpin the risk weightings that banks attach to assets to determine capital requirements, dictate which securities a money market fund can […]
In the decade or so leading up to the mid-2000s, FactSet was in the business of aggregating third-party content from a variety of different vendors – financial information from Thomson Reuters; index data from MSCI, Russell, and S&P; trading data from exchanges – cleaning it up, hosting it on mainframes, and rendering it on workstations […]
Industrial enzyme production beings with several thousand bacteria dunked into ever larger containers of liquid and nutrients. These microorganisms feast on the nutrients and replicate like crazy before being transferred to a fermenter — a giant steel vat that regulates temperature, pressure, oxygen, and Ph levels — where they are suspended within another nutrient-infused medium. […]
A deep local presence can confer competitive advantages in industries with low entry barriers. Rollins typically commands the largest share in its markets, allowing it to service more houses per technician outing than competitors, resulting in greater labor productivity and scale economies on marketing and branch overhead. Fastenal clusters its stores near customers, permitting steady […]