Key Points:
- Lessons for picking tech stocks: “Nothing but Net” provides 10 valuable lessons for investors to pick tech stocks, using case studies on companies.
- History of prominent tech stocks: The book explores the history of tech stocks such as Amazon, Facebook, Google, Netflix, and Uber, examining their innovation, revenue growth, and management strength.
- Structured approach: The author presents key points in a structured manner, providing action questions, logical tests, and characteristics to evaluate management quality.
- Guiding principles: The book offers concrete guiding principles based on the author’s 23 years of research experience, emphasizing customer-centric companies and analyzing management quality.
- Substitutes for information sources: The author suggests substitutes for information sources available only to institutional investors, such as using a Netflix subscription as a consumer survey proxy.
- Addressing investor questions: The book answers questions about identifying turning points, monitoring metrics, profitability importance, and when to sell high-growth tech stocks.
- Additional topics: Some topics not covered in the book include the impact of interest rates on tech companies’ multiples, the role of ETFs in stock valuations, international tech stock experiences, and investor selection for tech companies.
- Applicability to new age businesses: The methodologies provided in the book are valid for new age businesses worldwide, and the experiences of US tech stocks may prove similar to those in other countries.
- Recommended for investors: As technology companies continue to grow globally, “Nothing but Net” is considered a valuable resource for investors in the years to come.
In Nothing but Net, Mark Mahaney, a well-known US technology analyst, shares his 10 timeless lessons for picking tech stocks. The book provides valuable insights through case studies on prominent tech companies, making it an engaging read.
One of the strengths of the book is its exploration of the history of successful and failed tech stocks. Mahaney delves into the strategies of companies like Amazon, Facebook, Google, Netflix, and Uber, analyzing their product innovation, customer focus, revenue growth, and management strengths. Additionally, the book examines companies like Yahoo, eBay, Priceline, Spotify, Blue Apron, Zulily, Groupon, and Snap to derive intriguing insights.
In presenting his lessons, Mahaney demonstrates analytical rigor by structuring his key points. For example, he provides action questions to address high valuations of internet companies and logical tests to assess profitability potential. He also highlights key characteristics to evaluate management quality.
With his 23 years of research experience, Mahaney offers concrete guiding principles for investing in tech stocks. He emphasizes the importance of customer-centric companies and suggests examining a minimum of three to five years of public markets experience before drawing conclusions about management quality. Additionally, he advises readers to use a company’s app before making investment decisions.
The author also provides substitutes for information sources typically available only to institutional investors. One notable example is using a Netflix subscription as a proxy for extensive consumer surveys. Subscribing to Netflix allows individuals to assess the quality of content and user experience.
Throughout the book, Mahaney addresses common questions that trouble investors when it comes to new age businesses. He provides insights into identifying turning points for companies, monitoring essential metrics, understanding the importance of profitability for high-growth tech companies, and deciding the optimal timing for selling such stocks.
While the book covers various aspects of tech stock investing, there are a few additional topics that could have been included. These topics include the impact of interest rates on tech company valuations, the role of exchange-traded funds (ETFs) in influencing stock valuations, experiences of international tech stocks, and the significance of investor selection for tech companies. Nevertheless, the book’s methodologies can be applied to new age businesses worldwide, and it offers valuable lessons for investors.
As the technology sector continues to expand globally, “Nothing but Net” is a recommended read for investors seeking insights into picking tech stocks.
