This post is translated from Chinese to English using ChatGPT 3.0 as an experiment without my editing. Does it pass the Turing Test?
1.0 One Paragraph Thesis:
A data SaaS company with a long growth runway, high revenue growth, high gross margin, high profitability, and cash flow production capability. The more data assets accumulate, the more valuable they are, with short sales and delivery cycles, perceived quick-time-to-money, high user stickiness, and operating leverage. The company has further established data-driven marketing tools through R&D and acquisitions to increase the value and usage habits of terminal users. The market mistakenly categorizes ZI with other high-growth but unprofitable SaaS companies and YTD stock price has fallen with the Federal Reserve’s interest rate hikes and the SaaS sector. As macro pressures ease, the company’s large concentration in software client vertical, longer sales cycles, and insufficient sales team bandwidth may improve. In the medium to long term, operating margins and ROIC will continue to improve as revenue scale and growth reach a steady state. Annual returns of over 20% are expected.
In the high flying world of investing, Lei Zhang maintains a relatively low profile. Yet since being seeded by David Swensen of Yale Endowment with $20 million in 2005, he has achieved a ~40% compounded annual return (28x not adjusting for inflation), making him one of the best performing investment managers. To put it into perspective, Warren Buffett has achieved a compounded annual return of ~22%, albeit for the past 50 years!! Today, Lei Zhang’s Hillhouse Capital, named after a street nearby Yale where Lei received his MBA and master’s in public policy, manages ~$18 billion. Though not exclusively tech focused, Lei is best known for backing several of the most successful Chinese internet entrepreneurs and start-ups (e.g. Tencent, Baidu, and JD.com). On April 29th, Lei paid a visit to the “Temple of Value Investing” Columbia Business School to share his investing and life lessons. Below are my synthesis of his wisdom:Continue reading “Value Investing – Lei Zhang’s (Hillhouse Capital) Lecture at Columbia Business School”→
On May 1st, I flew to Omaha Nebraska with ～100 other fellow CBS students to attend the 50th annual shareholder meeting of Berkshire Hathaway, with the hope to meet the school’s most famous alumni Warren Buffet, and his partner Charlie Munger.
I have been a student of their essays and annual letters and am familiar with their investment and personal philosophies. Nonetheless, only seeing them live did I truly understand how remarkable they are. One is 84-year old and other is 91, yet they still possess the youth, energy, and mental clarity to conduct 6 hours of shareholder Q&A. The dynamic between Warren and Charlie are truly like an old couple, with Warren being the mellow and politically correct grandma, and Charlie the witty but sharp-tonged grandpa. They projected their wisdom, humor, and positive energy to a fully-packed CenturyLink Center.
Today (April 14th, 2015) Paul Hilal from Pershing Square came to speak during the “Value Investing with Legends Class.” In his introduction of Paul, Professor Big G (Bruce Greenwald) said this, “The public face of Paul Hilal’s fund is Bill Ackman, the talent to a large extent is standing in front of you.”
Paul certainly lived up to the “generous” introduction. He gave a very meaty lecture, full of insights, important life lessons, juicy and entertaining details of Pershing’s activist campaign against Canadian Pacific Railway in 2012. Paul came across as personable, candid, and grounded. But underneath all these qualities, it was clear that he would not hesitate to turn ruthless (I think all successful business people have this quality more or less) when it comes to sticking to his principles/beliefs and driving value from his investment ideas. Many of the lessons he conveyed are not just about investing, but more importantly about life, about being a principled person, and about life in business. There are lessons to be drawn whether you are an investor, a consultant, a general manager, or a banker. It is learnings like this that makes me feel lucky to be at Columbia Business School. Continue reading “Value Investing – Paul Hilal’s (Pershing Square) Lecture at Columbia Business School”→
Two weeks ago, Mohnish Pabrai came to give a lecture at Columbia Business School’s “Value Investing with Legends” class. His investment philosophy and methodology spoke to me personally so I wanted to share the learning on this blog. Below are some information about him and my key takeaways from the lecture. In addition, I found a taped video of Mohnish’s lecture from a couple of years ago and below is the link. He is quite an entertaining speaker and extremely willing to share his thoughts and ideas with students.