What We’re Reading
A few good pieces the Collab team came across this week …
Labor
Japanese continue to work long hours because, almost without exception, big companies continue to judge employees by input not output. They base promotion and pay not on merit, but on age and years at the company. It is almost impossible, by law, to fire incompetent staff hired on permanent contracts.
Contrarians
Wow:
Kerby also found that, among his sample of around 1,500 VCs, a whopping 40% went to either Harvard or Stanford.
Popularity
Music
As the company has grown—it now has 170 million users in more than 60 countries and 75 million of them are paying subscribers—it’s turned around the fortunes of what had been a declining industry. After global music revenues slumped from 2001 to 2014, streaming has put the recording business on an upward trajectory again, growing more than $3 billion in the past three years. Spotify reported $1.3 billion in revenue for the first quarter of 2018, and analysts expect it to generate more than $6 billion this year, 90% of it from subscriptions and 10% from advertising.
Tails
In 2015, for example, the top 200 companies by earnings accounted for all of the profits in the stock market, according to calculations by Kathleen Kahle, a professor of finance at the University of Arizona, and Professor Stulz. In aggregate, the remaining 3,281 publicly listed companies *lost *money.
Counter
Maybe public markets aren’t doomed:
The public company has historically been a crucial element of the American economy. Various predictions have been made recently that the public company’s future is bleak. This essay maintains these gloomy conjectures are erroneous. Companies leave the stock market by way of public-to-private buyouts with some regularity but large firms are rarely affected.
Enjoy your weekend.