(Updates with valuation in seventh paragraph.) (Bloomberg) — Aetna Inc. agreed to buy Humana Inc., the second-largest provider…

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Earlier in the week I wrote that the time for TV and film distribution startups might finally be upon us, arguing that radical reductions in the cost of production are a force for change that could break the legacy arrangements that have held for so long and usher in an era of direct connection between artist and consumer.

This chart shows that TV viewing is declining fast amongst American teens, weakening one of the key points of legacy control and creating more space for new distribution startups to build an audience. I haven’t seen equivalent stats for the UK, but I imagine they would be similar.

70215-cotd_tv



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The case is clear for updated rules for overtime pay.

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Greece's full-blown debt crisis and Puerto Rico's unfolding one have dominated headlines all week, but some of the biggest U.S. investors have China at the top of their worry lists.

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The airlines have little reason to compete on price.

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(Bloomberg Business) — When you get a raise, especially after a long spell of puny or no hikes in pay, it’s a time to celebrate. So it's easy to tell…

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A Vermont senator has a chance to make socialism a palatable ideology, much like what Ron Paul did for libertarianism. Will America buy it?

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Some investors were quick to ditch Puerto Rican bonds when the island said it couldn't meet its credit obligations, but many others don't even realize some of the commonwealth's $72 billion in debt is lurking in their portfolios.

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<p>There’s so much milk flowing out of U.S. cows these days that some is ending up in dirt pits because dairies can’t find buyers.</p>

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<p>BP Plc will pay a record $18.7 billion to resolve claims by the U.S. and five states along the Gulf of Mexico related to the 2010 oil spill.</p>

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The shutdown of Greece’s banking system is crippling businesses and making it hard for people to pay their bills.

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Billionaire Saudi Arabian Prince Alwaleed bin Talal has announced plans to give away his $32-billion fortune to charity.

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Don't make permanent decisions with temporary feelings.

— banksy (@thereaIbanksy) July 2, 2015

When I saw Banksy’s tweet this morning I thought ‘great advice for life’. Then I thought it’s great advice for investment decisions too.

Most obviously investment decisions should be rational rather than emotional, based in analysis of likely long term outcomes.

It’s important for us that we’re excited about the startups we invest in, but that excitement should be rooted in data rather than emotion. E.g. X market is exciting because it’s growing at y% and the company in question is z% better than the competition. Y and Z will be estimates based on a combination of research and educated guesswork but they should be defendable.

It’s also important that we feel a strong connection with the entrepreneur, but it’s the presence of that connection which allows an investment to be made rather than the strength of the feeling driving the investment decision.

So far so obvious.

Where it gets trickier is in competitive situations, particularly in hot markets when it’s easy for smart people to unknowingly have feelings drive their decisions. Fear of missing out regularly pushes people to make investment decisions they otherwise might duck. That might be rational – if our hot startup has a 10% chance of being the next Uber then it’s worth me investing even if it has a very high chance of failure – but more often it is rooted in temporary feelings related to loss aversion, embarrassment and greed.

Fear of partnership reprisals for simply not getting enough deals done has similar effects.

Where clever people often go wrong is deciding they want to do make an investment because of temporary feelings and then using their intelligence to build rational arguments that support the ‘10% chance of being the next Uber’ thesis. If you find yourself getting emotional when you defend your analysis then ask yourself if you’ve made this mistake. I’m not saying I’m smart, but this is a mistake I’ve made before and will probably make again.

This same logic applies to many important startups decisions everywhere that are emotionally charged, e.g.:

  • should I take this big round of financing that scares and excites me?
  • is my founding team the right team for the next stage of growth?
  • which features should I take out of our increasingly bloated product?
  • which of these strategic options should I ditch so I have time to properly focus on the other two?
  • how long should I hang on for this big deal?
  • and many more….



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Hewlett-Packard took a big step toward its Nov. 1 breakup by filing paperwork with the SEC that outlines the two businesses it plans to create.

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(Bloomberg) — The U.S. government will pay Anthem Inc. $742 million and Humana Inc. $549 million to reimburse big insurance claims the companies covered…

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