Founder led companies outperforming the rest

We believe that investing with founders gives you an edge in the stockmarket. Behind every stock there is a company and behind every company are people. Why not invest with the best like Jeff Bezos and Mark Zuckerberg? Amazon and Facebook have outperformed for years they seem to be able to take risks and make investments most companies wouldn't be able to. We believe a main reason is the founders long term vision. Thankfully Bain & Company have quantified the out performance of founder led firms, you can see below that they beat the index by 3.1x.

https://hbr.org/2016/03/founder-led-companies-outperform-the-rest-heres-why

The founder mentality=owner mindset
Bain's study found that when the founder was still CEO the company generated 31% more patents, were more likely to make investments and had a willingness to take risks to better position the company for the future. These companies had a strong sense of purpose for servicing customers this purpose helped employees feel more engaged at work. The founders treated everything like their own money because it was with large stakes in the business and hated bureaucracy. It's hard to have a successful business but it's even harder to keep growing into the future. The long term view of founder led companies meant that overtime they were positioned for change compared to management with shorter time horizons (average S&P500 CEO 9.9 years in 2014) and little equity in the business.

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Best CEO ratings

Glassdoor recently announced the top CEO's as rated by their employees. In what should be a tough crowd to please the top 5 CEO's had an employee approval rating of 97%. Two of the top five were private companies represented by consulting firms Bain and McKinsey. The reason for Bob Bechek's success? He made time to support employees and help them with their professional development. The other top performers were internet companies like Facebook, Linkedin and Ultimate Software (see below).

https://www.glassdoor.com/Award/Highest-Rated-CEOs-LST_KQ0,18.htm

The top ten has changed considerably from last year. Only three of the top ten made it again Tim Cook from Apple, Mark Zuckerberg Facebook and Scott Scherr Ultimate Software. Out of the top 50 four were women. In the S&P500 there are only 20 female CEOs so they are outperforming percentage wise at 8% versus the index of 4%.

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Internet Trends 2016 report

Mary Meeker just released her 2016 internet trend report. There are 213 slides we have included our favourites below. US internet advertising actually accelerated last year growing 20% vs 16% driven by mobile up 66% y/y. Google and Facebook were 76% of internet advertising growth. If you're in the print business you probably wouldn't like to see the slide below.

This chart helps explain some of Apple's (iOS) problems their average selling price has increased while Android prices have halved.

As we all know owning a car is expensive costing $8,558 year in the US, depreciation is 44% of the annual cost. Commuters spend 4.3 hours a week traveling to work time that Google or Facebook could use entertaining you! The rise of Uber has a big impact not just on cars but carparks freeing up extra space should help reduce property costs. Most users like Uber for its convenience but 84% surveyed use it after a few drinks.

China has spent more building roads in the past six years than than previous 30 but now its slowing.

Retail in China is online first. The top 2 Chinese retailers are e-commerce players. Alibaba is around 6.5% of retail sales compared to Amazon's 3% of sales in the US.

Source: http://www.kpcb.com/internet-trends

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.