Podcast note: 25. How to use VC thinking to buy stock?

This blog is the note and review about the podcast for 互联网金融在中国 in 疯投圈.

Podcast link

startup depends on big companies because sometimes big companies will purchase the startups, which giving the win for startups or if the startups compete with big companies, it will be much harder.

It is better for startups to avoid to fight with big companies.

Primary Market:

liquidity is low -> even its evaluation is much high but we cannot convert to money.

VC steps:

exit is most important, it is art.

Advantage of Primary Market

Avoid daily price volatility and unreasonable behaviors

They can communicate with and understand the CEO and cofounder.

Not only investment analysis, but also people connection, selling, branding.

It is easier to sell shares but long shares is hard.

Secondary Market

The duration of the funding of Secondary Market is about 2 - 3 years.

The duration of the funding of Primary Market is about 7–10 years.

That means most of investors in Secondary Market focus on short term profit because duration of the fund is short and there are noise in Secondary Market.

Warren Buffett’s fund source come from insurance and he can wait much longer than other funds. So that he can do investing long term value.

Thinking Primary Market

Since in Primary Market, the revenue model is unclear, even there is low profit for current now, not guarantee no future

watching future

watching user stickiness

watching user increment

whether the requirement replacement or not

watching moat

Thinking Secondary Market

Since the fixed revenue model, it is logically to measure the growth of revenue or business model

Without communicating directly with management of the companies in Secondary Market, how do we know whether the companies will make big win in the future?

First head: understand for the CEO, cofounder.

Second head: it is better to understand the industry domain knowledge and the management team in the companies, know the employees in the companies.

My review

This podcast, most of content is satisfying what I expect.

They talk about the difference between primary market and secondary market and why we should invest them in different thinking.

In conclusion, without directly communicating and cooperating with management of the company, it is harder to invest long term in the company, except for that we have some similar industry experience and some information about the company comparing with other common people.