Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch27
Mike Chung
" Buy low, sell high " is often quoted in finance. While its wisdom is hard to question, its application is hardly extensive. To understand why this is so, it is helpful to put ourselves in the shoes of a typical investor. Let's call him Joe. To Joe, " buy low, sell high " probably means: " I'm gonna find the next hot thing and get it early when its stock price is low. " While that's not a totally unreasonable target, such an endeavour is deeply flawed. To start with, for Joe to successfully find the " next hot thing " he needs extensive and specific business knowledge. Unless he is a genuine visionary (of the Steve Jobs type), chances are quite low that he has deep insights. Those who make a living trying to find the " next hot thing " are called venture capitalists and they expect to lose money on most projects and have a few pay off in a big way. Joe probably doesn't have the required resources to back a large number of investment prospects in the same manner as venture capitalists. But suppose that Joe does indeed stumble on the next hot thing. What are the odds that he will find it early enough? It would be tempting to say he has a better probability of winning the lottery. Even worse, by the time Joe buys shares of a hot stock in the open market, he has probably overpaid for them. After all, a hot stock is one that attracts excess attention from the trading public and therefore commands a hefty price premium. Moreover, the competitive advantage that made a hot stock perform in a stellar manner would most likely attract more competition. The economic law of diminishing returns would kick in resulting in a low likelihood of long-term profitability for the underlying business. For instance, Microsoft was one of the most prominent hot stocks of the 1990's. But since then competitors have caught up with the software giant and market participants are no longer feverishly buying its shares. Ditto for the most recent case of Research in Motion.
“低买高卖”常被引用于金融界。虽然它的智慧不容置疑，但它的应用并不广泛。要理解为什么会这样，我们不妨设身处地地为一个典型的投资者着想。就叫他乔吧。对乔来说，“低买高卖”的意思可能是:“我要找到下一个热门股，并在股价低的时候尽早买进。”虽然这不是一个完全不合理的目标，但这种努力存在严重缺陷。首先，对于Joe来说，要成功地找到“下一个热门事物”，他需要广泛而具体的业务知识。除非他是一个真正有远见的人(像史蒂夫·乔布斯那样)，否则他有深刻见解的可能性很小。那些以寻找“下一个热门事物”为生的人被称为风险资本家，他们期望在大多数项目上赔钱，而有一些项目会获得大笔回报。乔可能不像风险投资家那样有足够的资源来支持大量的投资前景。但假设乔确实偶然发现了下一个热点。他能尽早发现的几率有多大?人们很容易说，他中彩票的可能性更大。更糟糕的是，当乔在公开市场上购买热门股票时，他可能已经多付了钱。毕竟，热门股票是指吸引了交易公众的过度关注，因此价格溢价很高的股票。此外，使热门股票表现出色的竞争优势很可能会吸引更多的竞争。收益递减的经济规律会导致基础业务长期盈利的可能性很低。例如，微软是20世纪90年代最突出的热门股票之一。但从那以后，竞争对手赶上了这个软件巨头，市场参与者不再狂热地购买它的股票。最近的动态研究公司(Research in Motion)也是如此。
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Pub Date : 2021-01-22DOI: 10.1002/9781119639695.index
{"title":"Index","authors":"","doi":"10.1002/9781119639695.index","DOIUrl":"https://doi.org/10.1002/9781119639695.index","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90483011","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch30
{"title":"Board Culture and Orientation","authors":"","doi":"10.1002/9781119639695.ch30","DOIUrl":"https://doi.org/10.1002/9781119639695.ch30","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81795689","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch12
{"title":"Investment Team Diligence","authors":"","doi":"10.1002/9781119639695.ch12","DOIUrl":"https://doi.org/10.1002/9781119639695.ch12","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87032675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.part4
{"title":"The Art of Value Creation","authors":"","doi":"10.1002/9781119639695.part4","DOIUrl":"https://doi.org/10.1002/9781119639695.part4","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87630580","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1142/9789814508179_0003
Trandafir Raluca Andreea, Truicã Luiza Denisa, Spãtariu Elena Cerasela
The notion of performance has multiple meanings and sometimes it is paradoxical as each company must define performance for its internal and external communication. As we are trying to find a definition of performance based upon the features that a company should have, we find that every day companies invent new ways to compete in a competitive environment. One thing is certain: performance is achieved over time and can be seen. We will test the model on the analysis of credit risk indicators of multitude of existing indicators, we considered representative performance.
{"title":"Performance Analysis","authors":"Trandafir Raluca Andreea, Truicã Luiza Denisa, Spãtariu Elena Cerasela","doi":"10.1142/9789814508179_0003","DOIUrl":"https://doi.org/10.1142/9789814508179_0003","url":null,"abstract":"The notion of performance has multiple meanings and sometimes it is paradoxical as each company must define performance for its internal and external communication. As we are trying to find a definition of performance based upon the features that a company should have, we find that every day companies invent new ways to compete in a competitive environment. One thing is certain: performance is achieved over time and can be seen. We will test the model on the analysis of credit risk indicators of multitude of existing indicators, we considered representative performance.","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90832229","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch8
{"title":"LP Universe","authors":"","doi":"10.1002/9781119639695.ch8","DOIUrl":"https://doi.org/10.1002/9781119639695.ch8","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81431824","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch4
{"title":"Welcome to the Land of Ad‐Venture","authors":"","doi":"10.1002/9781119639695.ch4","DOIUrl":"https://doi.org/10.1002/9781119639695.ch4","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80186944","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch31
{"title":"Let Me Know How I Can Be Helpful: Value Creation","authors":"","doi":"10.1002/9781119639695.ch31","DOIUrl":"https://doi.org/10.1002/9781119639695.ch31","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74934443","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-22DOI: 10.1002/9781119639695.ch1
{"title":"The Business of Cash and Carry","authors":"","doi":"10.1002/9781119639695.ch1","DOIUrl":"https://doi.org/10.1002/9781119639695.ch1","url":null,"abstract":"","PeriodicalId":22469,"journal":{"name":"The Business of Venture Capital","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74895646","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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