So, lately there’s been some grumbling about Square being under-appreciated, while TTD roared back from a recent drop.
TTD CEO, Jeff Green was on “Mad Money” and with expert precision made three key points: 1. TTD does an expert job of managing profitability/growth; 2. TTD can excel in China because they bring ad spend/money into China; the TAM will grow to 1 TRILLION in the next 7.5 years. While Green spoke, Cramer was giddy. My wife normally doesn’t care about the market, but since we have a big hunk in TTD I asked her to watch. We were laughing out loud, I even taped Cramer’s reactions. He literally looked like a school girl listening to an amorous suitor.
I found this downright charming. Cramer genuinely loves business. He is cuckoo for Cocoa Puffs, but undoubtedly brilliant. He was so delighted because it feels great to see the elite of the elite do their thing. Green had a very short amount of time to do his thing and he smashed the ball out of the park. The next day the stock was up 8%. Storytelling is a fascinating art in that it takes extreme intelligence and hard work to keep things simple. I know very little about the technical aspects of TTD, but I know greatness in storytelling and management when I see it. And he’s not a great looking hunk - meaning his charisma is fueled by intelligence, authenticity, vision, and likability. According to Wikipedia, Cramer gets roughly 500,000 viewers. These are obviously all or mostly investors. And there is likely no shortage of marketing people who watch.
Compare this to Square’s Jack Dorsey. No doubt Dorsey is extraordinary businessman, entrepreneur, personality. But in his last media tour - which was extensive - guess what he virtually never mentioned. Square! Incredible. The entire focus on Twitter, which is arguably the most important media company in the world. How much would companies spend to get big media attention? How much impact does it have? It’s impossible to fully quantify. But it’s a lot.
There are so many great companies around Fooldom/Bert-n-Saulville to choose from that we each need our own little short cuts to prune our portfolio gardens. For me leadership is ultra-essential. When I walk onto a 747 to fly across the ocean I want my captain 100% focused on the flight I’m on. As Tom Gardner once wrote, “Focus! Focus! Focus!”
Drucker believes that most people – and, by extension, most companies – are terribly unfocused. They have too many loves to satisfy and too few commitments. They dabble here, dally there, and fail to master anything. Peter Lynch, the greatest mutual fund manager of all time, called this phenomenon di-worse-ification. Drucker called it a driver of mediocrity.
Running two separate companies is a form of diworsification. I predict Square with its unfocused CEO, relatively inexperienced CFO, massive product line-up becomes more unstable as it grows into the tens and tens of billions.
I am extremely grateful to all of you here who do deep dives into the finances, run models and deep dive into technology. But sometimes I think it blinds investors to the most obvious and blatant flaws in a company and gives scientific certainty to investing which is as much art/intuition as science. We can talk all day about the 100,000 complex moving parts of an airliner. But if the pilot’s unfocused…
Green has the ability to charm people, to make friends, to bring disparate parties together. He reminds me a lot of Reed Hastings - who somehow built Netflix without infuriating anyone. Again, this doesn’t show up on a spreadsheet, but Hastings charisma/intelligence/maturity, were essential to Netflix going from 1B to 150+ Billion. He made deal after absurd deal in which NBC et al radically undervalued their content. Seriously, watch Cramer’s responses here…
Jeff Green - Mad Money
This is some high level Jedi mastery.
Champion of the Intangibles