Matthew Giampetroni

In an ideal world, corporate executives would allocate capital to maximize long-term value per share. But, for reasons that are mostly understandable, there’s a lot of evidence that they fall short of this objective

M&A is by far the largest source of redistribution of corporate resources among the capital allocation alternatives. M&A deals in 2021 totaled nearly $2.6 trillion, or 13.5 percent of sales. The chart shows that M&A tends to be cyclical. Early movers tend to do better than companies that buy later in the cycle.

According to Kapferer, “luxury is superlative, not comparative”. The beauty of luxury is that no one can definitively say whether a Louis Vuitton bag is better than an Hermes bag because that concept doesn’t even make sense

People buying premium or even super-premium like to justify every dollar by a return on investment. Premium means pay more, get more in functional benefits. Luxury is elsewhere: it signals the capacity of the buyer to transcend needs, functions, or objective benefits.

The primary job of senior management is to create value over the long term.

People on the outside sometimes wonder why businesses with so few traditional assets seem to require so much financing. Well, they  are  accumulating assets: users are the new assets, and their  use  is what you’re out to monetize.Whatever your business model is, acquiring users is the new building factories.