It makes the distinction between a winner’s game (where you win by winning) and a loser’s game (where you win by not losing).
He argues that investing has become the latter but does offer some advice:
(1) play your own game – “Impose upon the enemy the time and place and conditions for fighting preferred by oneself.” Simon Ramo suggests: “Give the other fellow as many opportunities as possible to make mistakes, and he will do so.“
(2) keep it simple – “Play the shot you’ve got the greatest chance of playing well.”
(3) concentrate on defence (selling) vs. offence (buying).
Poland’s InPost, that recently listed, has an interesting story and strategy.
It almost went bust but now handles 36% of Poland’s eCommerce volumes and is aiming for 50% margins.
They believe “slipper distance” lockers are the future of eCommerce parcel delivery – they are greener, more convenient than convenience stores, and safer than leaving parcels on a porch.
It will be interesting to see if this strategy is indeed the future.
“People exhibit a bias blind spot: they are less likely to detect bias in themselves than in others.“
“Most people recognise that other people are likely to be biased when judging an attractive person, for example, but think that their own judgment of an attractive person is unaffected by this type of halo effect.“
Clearly, the majority of people cannot be less biased than their peers – hence the blindspot.
Fascinating article on the ballooning software requirement in cars.
“Even low-end vehicles are quickly approaching 100 ECUs and 100 million of lines of code as more features that were once considered luxury options, such adaptive cruise control and automatic emergency breaking, are becoming standard“.
A must read essay on what leadership means and what solitude (seemingly a contradictory state) has to do with it.
Lessons here for investors – solitude, concentration, introspection, original thought.
This quote was also a gem – “I used to have students who bragged to me about how fast they wrote their papers. I would tell them that the great German novelist Thomas Mann said that a writer is someone for whom writing is more difficult than it is for other people.“
Bastiat’s broken window fallacy states: breaking a window may seem to generate economic activity through its repair, but it’s actually a loss once you take the opportunity cost into account.
But what if things looked different at scale? Does destruction lead to positive effects?
What if we all “both underestimate the costs of being stuck in bad equilibria, and overestimate the pain caused by burning down the system.“
This article explores this idea, by reviewing several fascinating economic papers.
Interesting essay on the future of the web – Web3.
Web3 allows a new generation of disrupters to create products that actually pay people to use them, and aligns the incentives of creators, consumers, suppliers, and investors.
“Imagine going to Disney World, and getting shares in Disney, the company, every time you took a ride, bought Mickey Merch, or sent your friend a picture. Or that owning shares in Disney let you skip all of the lines as long as you held the shares. That’s what tokens do.“
In the essay he presents Web3 competitors to all the major web platforms.
One neat way to describe the landscape is to think of “crypto as listed versions of traditional VC, with a real-time, 24/7 quoted price.” (Source).
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.
