Things from my Newsblur: June 2014 Edition

- Tickets for Restaurants

The in-depth story about why Alinea, Next and the Aviary moved to a ticketing system for their bookings as opposed to the standard restaurant reservation system (or using OpenTable).  While it’s long, it’s a great in-depth explanation that explores the qualitative reasons for making such a move and provides a lot of interesting data that helps show the impact of the move.   I won’t be surprise if a number of restaurants (especially higher-end ones) move to such a system in the coming years! (Nick Kokonas, Alinea)

- Economics of a Small VC Fund

Ever wondered about how lucrative (spoiler alert:  unless you make your LPs good money, it isn’t!) it is to run a small VC fund?  Well, in an extraordinarily transparent post, Charlie O’Donnell walks you through the economics of his small fund!   (Charlie O’Donnell, This is Going to be BIG)

- Interview with Fred Wilson

Fred Wilson’s one of the best known and (with his partners) most successful venture capitalists on the East Coast (and I suspect the US & world).  He also writes a blog, where he posts every day which should be required reading for those budding entrepreneurs out there, those who work for/with them, and those that invest in them (and I guess, just folks who want to learn/know stuff).  Here’s the transcript (on his blog) of a recent interview he did with Business Insider (Alyson Shontell and Fred Wilson, Business Insider and A VC respectively).

- Beautiful Illusions:The Economics about UberX

Uber’s been in the news recently, with protests in Europe’s and the firm’s claims that the “median small business income” with Uber X in NYC is $90,000+.  Here, Justin Singer goes into the numbers and unsurprisingly finds that the numbers are rather generous (essentially it’s more of a revenue figure, than an income one), and leads to some more general questions about Uber’s future.  (Justin Singer, Justin-singer.org)

- An Oral History of Ghostbusters

Our Man’s mentioned that oral histories are all the rage, but after the recent one on Trading Places, how could he not indulge you with the one on Ghostbusters.  Is seemed like it was a mess to make, but a LOT of fun!  Anyways, who you gonna call?  (Justin Matloff, Esquire)

- Who Owns Chicken Tikka Masala

In a 2001 speech on British race and identity, Robin Cook (then the British Foreign Secretary) said "Chicken Tikka Massala is now a true British national dish, not only because it is the most popular, but because it is a perfect illustration of theway Britain absorbs and adapts external influences."

Unfortunately, the commonly told story behind its origination isn’t entirely (or at all) true!  (Mark Hay, Roads & Kingdoms)

- Teledyne: Case Study of an Excellent Capital Allocator, Dr. Henry Singleton

It still boggles Our Man’s mind that when he was getting his MBA, Henry Singleton’s name never came up – given he was one of the great entrepreneurs, businessmen and capital allocators in the 20^th century!  If you invested in Teledyne stock in 1966, you’d have had a 53x return on invested capital over the next 25yrs (vs. 6.7x for the S&P 500, and 9.0x for GE).  Here’s the closest thing to a case study on Singleton, and his conglomerate Teledyne.  (John Chew, CS Investing via Value Walk)

May 2014 Review

Portfolio Update 
- Equity: The two changes to the portfolio both came in the Equity book, with OM adding to the positions in THRX and TWTR in the middle of the month.  THRX is splitting itself into 2 separate companies (a royalty management one and a pure biotech research one) in early June.  TWTR offered an interesting technical point; during May, its stock touched $29.51 putting it down around 61% from its post-IPO peak  ($74.73) in late-2013, a very similar amount to the level Facebook fell (from $45 to $17.55) post its IPO to its eventual trough in 2012.

Performance Review
May proved the first unabashedly positive month in a while for the portfolio, which rose 1.92% during the month to bring it’s YTD performance to -0.8%.

The portfolio was able to benefit from the rise of Equity markets, especially in the US, most obviously through the index-linked Technical book (+53bps).  The Equity book (+130bps) was also a strong contributor, driven by positions in THRX (+51bps), and the Internet-related positions which added +113bps (QIWI +86bps after some favorable rulings in Russia, and VIPS +33bps helped, while TWTR -36bps cost money despite rising in the latter part of the month), though this was partially offset by the position in RDY (-30bps).   European markets failed to perform as well as the US, in part due to the uncertainty in Ukraine, and the International/Country book cost -9bps.  Unsurprisingly, the Puts/Hedges book (-29bps) was a negative contributor.

The Currencies book (+34bps) performed well, driven by the Short Euro position (EUO +45bps) as speculation continued that in addition to the announced measures, the ECB would continue with further monetary easing.   

The rest of the portfolio has more limited exposure, but the books were small positive contributors; Absolute/Bond Funds (+6bps), China Thesis (+5bps) and Energy Efficiency (+1bp)

Portfolio (as at 5/31 - all delta and leverage adjusted, as appropriate) 

29.9% - Equities (THRX, PNQI, TTM, TWTR, RDY, QIWI, VIPS, P & DRWI)

21.3% - Technical (DDM, SSO and QLD)

21.2% - International/Country (GREK, EWP, EWI & GVAL)

5.8% - Bond/Absolute Return Funds (DLTNX and HSTRX)

0.2% - Energy Efficiency (AXPW, and XIDE) 
 
-2.9% - Hedges/Put Options (premium of 36bps in EWZ Jan-15 puts, and 6bps in EWJ Jan-15 puts) 
 
1.5% - China-Related Thesis (CROC – Short Australian Dollar, more than offset by CAF – Long Chinese A-Shares) 

-50.0% - Currencies (EUO – Short Euro, YCS – Short Japanese Yen)

3.5% - Cash 

Disclaimer:  For added clarity, Our Man is invested in all of the securities mentioned.  He also holds some cash and a few other securities (of negligible value).  You should not buy any of these securities because Our Man has mentioned them, but should do your own work and decide what’s best for you.