Good analysis of the bill proposed in Congress on regulating Big Tech.
The bill tries to restrict a lot of activity that is seen as anti-competitive behaviour on platforms.
It is also aimed at breaking up the businesses, making data easily portable, and acquisitions harder.
“Taken together, these laws would be a revolution in antitrust law, adapted for an era where Big Tech marketplaces, not railroads, are the dominant businesses of the day. They could also have many serious unintended side effects, so the final form of these laws matters a lot.”
“88% of customers were likely to recommend Disney+ and, perhaps more impressively, 74% of Disney+ customers did recommend the product to someone in their social circle.“
Interesting to see cracks form in cloud computing paradigm.
In the article a16z make a stark case for repatriating workloads – “We show (using relatively conservative assumptions!) that across 50 of the top public software companies currently utilizing cloud infrastructure, an estimated $100B of market value is being lost among them due to cloud impact on margins — relative to running the infrastructure themselves.”
“If you’re operating at scale, the cost of cloud can at least double your infrastructure bill.” … “You’re crazy if you don’t start in the cloud; you’re crazy if you stay on it.“
Computing paradigms do move in cycles but the analysis is missing things like flexibility (cloud is better at flexing workloads up and down) and capital intensity of businesses being a driver of valuation.
It is interesting because it goes against a lot of consensus views.
(1) The demand boost is largely temporary (fiscal stimulus) and will start to subside e.g. consumer discretionary was actually up last year.
(2) Supply will eventually catch up (lumber production +20%, booming semiconductor exports Taiwan/Korea, lots of full container ships at US ports).
Inflation depends largely on the labour market and that still has considerable slack (U-6 rate is 11% vs. 8% pre-Covid, slide 79 Atlanta Fed Wage Tracker is benign).
Things like commodities (China is delevering anyway) and ISM diffusion indices (see chart) don’t drive inflation.
Interesting how much better Airbnb has fared than traditional hotels coming out of the pandemic.
“As of April 2021, Airbnb’s sales were 182 percent higher than January 2019 sales, while sales volumes for the majority of traditional hotel companies were down an average of six percent compared to January 2019.“
Only some Casino hotels (Caesers, Boyd) have done better.
The mind boggles at the level of innovation going in ecommerce.
One major part is entertainment and retail = retailtainment – “shopping as a mass leisure activity”.
This is a great article on the phenomenon, covering the plethora of ways it is developing.
As usual one needs to look east where a lot of development is taking place.
One of the enablers is software that is designed to be addictive – for example infinite scrolling can mimic the bottomless bowl effect leading to 73% more consumption.
A useful inflation tracking index (consisting of seven measures of inflation) that is both more timely and overcomes the challenges of each individual measure.
The latest update (7th June) – pictured – suggests inflation could be peaking.
For the first time this year the mean and median are holding steady.
This is a fascinating slightly old interview with Chris Cole of Artemis Capital Management.
He runs a long volatility fund i.e. a crash protection fund.
In the interview he talks about the core principle of the fund – to sacrifice the next linear predictable outcome in order to gain exposure to a truly convex upside outcome.
Around minute seven he goes into a brilliant analogy using George Lucas’ success with Star Wars.
Most interestingly, this idea can also be applied to life as Chris describes in minute 47 of the interview embedded here.
Worth checking out their writing and following him on Twitter.
