Most of life’s encounters, good or bad in social welfare, present us each individually with the opportunity to choose our own long term benefits and detriments. By circumstance, I was exposed professionally to see Mary Meeker’s high times at Morgan Stanley while the ink was still wet on my undergraduate diploma. I’ll call loosely the phenomenon “Mary’s World”. In the spirit of the Holiday Season, I’d like to offer “Thanks” for the wisdom provided by a youthful exposure to Mary’s World.
Although I might have otherwise been afforded a more focused introduction to my investing focus today, exposure to Mary’s world provided painful observations which I can block from my memory or use to be a wiser human being.
Exposure to Mary’s World allows us a pure form model to recognize what is faith and hype. Careful evaluation also offers the ability separate the greater fool relevance of each from the logic which generally informed her comparative analysis of the likes of AOL Time Warner (TWX, TWC, AOL), Yahoo (YHOO), eBay (EBAY), and Amazon (AMZN).
Next time investment professionals and the investing public want the autograph of any number-crunching research analyst, we should all recognize the certain magnitude of a bubble. But, the lessons as relate to media and social focus are farther reaching to those who now very well recognize the hazards of aggregating (building unsustainable prices) or aggregated (regression to the mean) perspectives in mass. Contrarian investing may be less unfashionable today than in the early 90s because climbing a wall of worry is much less hazardous than anticipating a greater fool.
Objective contemplation of the fittest who survived Mary’s World allows us more than to merely make social or moral judgments about Wall Street’s business model. There is more to appreciate here than just knowing to not again be a small fish in a comparatively uninformed school of a large pond.
Those who chose to absorb and use wisdom may never again fail to consider the relevance of Wall Street’s business model in all of their investing decisions. IPOs, Products, and Celebrity Analysts don’t exist for the public’s good. They all exist for Wall Street profit.
Wall Street people can be broken down into a few simple groups: Asset Gatherers, Marketing-Driven Product Engineers, Lawyers (who generally protect the first two), and lastly the Talent which identifies market inefficiencies objectively.
Most retail analysts are like financial advisors and fall under the role of asset gatherers in my view. But Mary Meeker may have possessed a real talent that more often informs proprietary trading or something other than sell-side research. Her market was so big and her presence so extraordinary that the only role she isn’t well recognized for having filled is that of the lawyer who protects the other roles. Such is not to say she didn’t partially serve the functions of that role as well.
As for Mary’s subjects, not only were companies like AMZN and EBAY “real”, so too was the concept of “Network Externalities”. Such was true before Mary made their presence known, or more than priced into the market. But, we must thank Mary each time we observe Network Externalities because it’s in memory of Mary’s World that we’ll never forget the common sense constraints of Net work Externalities. What history suggests is worth $100 is probably never worth too much more. Among Closed-End Funds (“CEFs”) which I spend much of my time researching in depth, I’m amazed each time people pay $120 for $100 in assets, or selling CEFs exposed to Well-Intentioned Activism at significant discounts. But, both still happen plenty.
Not everybody achieves the wisdom of the price paid for life’s encounters. I offer Mary Meeker a retrospect and objective farewell. To be candid, I am unsure whether I would today have any acumen or desire to identify conflicts of interest in the investment industry if I had never been exposed to the implosion of Mary’s World. Lessons are always expensive, and in youth I lacked the wisdom to avoid the peril’s of Mary’s World entirely. While the“Queen of the Net” was quite a distraction to learning of my own professional interests, I was lucky for her reign to cover a youthful portion of my life where I had less wealth to pay in dollars, and more analytical acumen with which to pay attention.
The above text is licensed to Covestor Ltd. (“Covestor”), by Dan Plettner. Such text may be disseminated only by Covestor. Dan Plettner invests and receives income for securities research, including “buy-side” research. Dan licenses his own real time trading data to Covestor Ltd. (“Covestor”). Covestor is a Registered Investment Advisor that uses Dan Plettner’s data to create the Core, Activism Profile Closed-End Funds, Long Short Opportunistic, Pure Short Opportunistic, Tax Advantaged Income, Taxable Income, and MLP Direct Ownership models for its clients.
