No. of Recommendations: 10
One, many of the stock picks on this board are technology stocks, and based in Silicon Valley. This book gives you an idea of the seedy underbelly of technology start-ups, fake it till you make it, and pivoting. Hopefully it encourages a bit of skepticism.

Two, it re-inforces what the knowledgebase says about investing in companies with great management. Theranos was a horror show of misrepresentation, dishonesty, internally siloing information, bullying employees, and other unbelievable behaviour.


I think I mentioned on another post that my son worked for a competitor to Theranos that was bought by Illumina. After the sale some of the employees moved to San Diego. One guy made the move from there to Theranos and called my son to ask if he could use his name as a reference. As the conversation unfolded Ryan commented that Theranos "sounds like a scam." He said if you knew just a little about the complexity of what they were trying to do you would have known the claims were vastly overstated. That was 2014.

When I am looking at an investment I am reminded of the boardroom scene from "Big". (In this movie Tom Hanks wishes to be big and grows from the size of child to an adult, but when he gets there he still has the brain of a 12 year old. The insight of a 12 year old is what allows him do well at his toy company job. Anyway...) In this scene the hot shot MBA unveils a prototype of next year's hot toy along with charts and focus group studies. The toy is a building that turns into a robot. When he proudly asks if there are any questions Tom Hanks says: "I don't get it."

MBA: What exactly don't you get?
TH: It turns from a building into a robot, right?
MBA: Precisely.
TH: What is fun about that?

https://www.youtube.com/watch?v=3ERuhks3GNk

My rambling point is that it is a great idea to get past those slick PowerPoints that are presented by George Clooney lookalikes and ask the really simple questions. Does it work? Who's going to buy it? Can they make money? Yeah the hover board that is powered off of teen spirit sounds great, but realllly?

The simplest questions are the best and should be asked first.

Jeb
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