Private Equity
3 min read · 06 October 2011
“Don’t you know that you are a shooting star, And all the world will love you just as long, As long as you are.” – Paul Rodgers, Shooting Star With the IPO market now blown wide-open, and the media completely infatuated with frothy trades in the bubbly late stage private market, it is common to see articles that reference both “valuation” and “revenue” and suggest that there is a correlation between the two. Calculating or qualifying potential valuation using the simplistic and crude tool of a revenue multiple (also known as the price/revenue or price/sales ratio) was quite trendy back during the Internet bubble of the late 1990s. Perhaps it is not peculiar that our good friend the price/revenue ratio is back in vogue. But investors and analysts beware; this is a remarkably dangerous technique, because all revenues
10 min read · 25 May 2011
Sorry I haven’t posted in a while -- it’s been a hectic stretch. And I also have to admit that I’ve been watching a lot of Indiana Jones movies with LittleLP lately. Every now and again, I’ll wonder if I should be doing something productive like scribbling down a blog post or paying some bills, but the moment I see that fedora I’m frozen in place like one of Indy’s antagonists in the presence of some ancient and mystical idol. And I’ve long thought that the best of the bunch is The Last Crusade, but only recently did I realize that the last scene of that movie offers a metaphor for the craft of investing. Stick with me on this for a moment: As you’ll recall, the movie reaches its climax when the good guys catch up
5 min read · 22 March 2011
5 min read · 02 March 2011
2 min read · 09 November 2006
