Since its 2004 debut, the search engine giant has soared. Interestingly enough, it was a tough sale. The original range was for the offering was supposed to be between $108 and $135, but the company ultimately priced the deal at $85. Of course, that turned out to be a huge opportunity, as the company is now trading for more than ten times that. So what can investors learn looking back? To see, I took a look at the S-1 filing. Here are five takeaways — things that you can looking for when trying to find the “next Google”:
#1. Global Leader
When Google came public, it was already a global brand and one of the most visited destinations on the Web. Plus, the company had a bold mission, which was to “organize the world’s information and make it universally accessible and useful.” Beyond the mission, the business model was also clear-cut: Read more »
“Last month, I went to Omaha for the annual Berkshire Hathaway shareholders meeting. It’s always a lot of fun, and not just because of the ping-pong matches and the newspaper-throwing contest I have with Warren Buffett. It’s also fun because I get to learn from Warren and gain insight into how he thinks. Here are three things I’ve learned from Warren over the years:
1. It’s not just about investing.
The first thing people learn from Warren, of course, is how to think about investing. That’s natural, given his amazing track record. Unfortunately, that’s where a lot of people stop, and they miss out on the fact that he has a whole framework for business thinking that is very powerful. For example, he talks about looking for a company’s moat—its competitive advantage—and whether the moat is shrinking or growing. He says a shareholder has to act as if he owns the entire business, looking at the future profit stream and deciding what it’s worth. And you have to be willing to ignore the market rather than follow it, because you want to take advantage of the market’s mistakes—the companies that have been underpriced.
I have to admit, when I first met Warren, the fact that he had this framework was a real surprise to me. I met him at a dinner my mother had put together. On my way there, I thought, “Why would I want to meet this guy who picks stocks?” I thought he just used various market-related things—like volume, or how the price had changed over time—to make his decisions. But when we started talking that day, he didn’t ask me about any of those things. Instead he started asking big questions about the fundamentals of our business. “Why can’t IBM do what Microsoft does? Why has Microsoft been so profitable?” That’s when I realized he thought about business in a much more profound way than I’d given him credit for. Read more »