Supersonic Boom, Books, Bankruptcy

3.26.2017

New Amazon Book Store

BOOK OF THE WEEK

The Intelligent Investor by Benjamin Graham — This is the foundational book on value investing. It is known as Warren Buffet’s favorite book, and is a great dive into the fundamentals of investing. This book is accessible to those without a background in finance. There is a lot of wisdom in this book, so I am only going to hit some highlights. Always remember that investing is simply purchasing a portion of a company at a market price from another investor. Even great companies can be overvalued, and even horrible companies can be great buys, specifically if you can purchase for more than the value of assets. Next, understand that investing is about not losing. Consistent, compounded returns will almost always outpace crazy wins and crazy loses. Investing is just as much about understanding yourself as it is about understanding business. It is really incredible that this book was written in the 40’s. 4/5

PODCAST OF THE WEEK

Lots of great podcasts from this past week. Jerzy Gregorek on Tim Ferriss is the creator of The Happy Body, a daily workout routine designed around flexibility first, then strength, then speed. The takeaway here is that from any age, from any starting point, anyone can dramatically improve. The key is to build time into your routine. Routine is everything! I have been monitoring my own goals using the calendar app and an app called ‘Way of Life.’ For me, this is really the only way to get better.

Another great podcast from Masters In Business with Derek Thompson. Thompson is a writer for the Atlantic and recent author of Hit Makers: The Science of Popularity in an Age of Distraction. The takeaway here is that virality is largely a myth. There are usually reasons why products become popular, and it does no favor to the creator to imagine success as a function of luck. Two notes I scribbled:

  1. M.A.Y.A — Most advanced yet acceptable. People assign value to familiar processes, and even huge advances may not catch on. Timing is key, user experience is crucial, and switching costs are often higher than one would assume.
  2. Identity is that which we are not — People often associate most strongly with that which they do not associate with. This is powerful! I think identity may be more strongly linked to the intersection of what we are not and what most people are.

NEWS

The repeal and replace of the Affordable Care Act failed. The whole ordeal seemed rushed and unorganized. It continually amazes me to see dramatic and sweeping reform rushed in this manner. Why is there such a rush? Since this failure, the administration is going to need a win. Public sentiment seems to suggest that tax policy is the next item on the agenda. I am most interested to hear if repatriation is discussed. For those unfamiliar, companies that make money abroad will often hold that cash in foreign accounts to delay or avoid paying US corporate taxes, which are among the highest in the world. During a repatriation holiday, companies get a tax break for bringing that foreign cash into the US. We are talking about $2.5 Trillion held overseas. A large portion of that coming back into the US would mean investment, M&A, and a lot of tax revenue. The markets have been pricing this into the past few months. If the administration can’t get it done, we are going to see a blood bath in the markets.

Meanwhile, the probe into Russia-Trump campaign lives on.

BIG DATA

Big data has been a big topic of discussion this past week. I heard somewhere that ‘data is the new oil.’ Data management tools are getting easier and easier to handle, processing speeds are improving, and more devices are storing data than ever before. Not to mention that all of this data will be food to feed the machine learning algorithms that are popping up like weeds. Alteryx, a data blending service, IPO’d at nearly $900MM this week. Very much like oil, data is of varying quality, will require refining, storage, distribution, and protection. Unlike oil, we are creating data exponentially. The most interesting questions for me at this time are around storage and access. Where are we going to put all of this data? Will we start treating bad data like litter and fine perpetrators for mucking up our digital landscapes? Who is going to be able to access the data? While privacy is a huge issue, do we want scientists to have free access to certain data sources? Should certain agencies have access to safeguard citizens? I have seen a lot of movement on the tech side of the equation, but really haven’t seen a lot of movement on the access side. We need to have this conversation! Company idea: Feed data into the company, the company can encrypt the data, scramble identification information, and then provide tools and access to the data. I want more data to be made public so we can cure diseases and fact check our politicians.

Interesting side note from IBM’s 10K. Could there be a gold rush on the big data producers?:

“It is estimated that there are more than 9 billion connected devices operating in the world today, generating 2.5 quintillion bytes of new data daily. Watson IoT will bring the power of cognitive to the challenge of extracting and analyzing data embedded in intelligent devices in real time. In addition, the recent closure of The Weather Company acquisition essentially expands the company’s IoT platform; with one that collects, integrates and analyzes data from three billion weather forecast reference points, including satellites, weather stations, airplanes, consumer apps and more for IBM and our clients.

BOOM

BOOM raises $33 million in Series A funding. This company is building super sonic commercial jets, and I think that is pretty awesome. Why do I care? Because air travel is the worst end to end consumer experience of anything I can think of. From purchasing a ticket that fluctuates in price all day, to having to spend an hour getting to the airport, to security, and finally sitting in the most uncomfortable seats imaginable, air travel is awful. By pushing the boundaries of speed and efficiency, BOOM, and companies like it, will help bring down costs and allow airlines to improve the experience. Now let’s see if they can execute.

“This funds our first airplane, all the way through flight tests,” explained Boom founder and CEO Blake Scholl in an interview. “Now we have all the pieces we need — technology, suppliers and capital — to go out and make some history and set some speed records.”

IS RETAIL DEAD?

Sears says they might go bankrupt, and Payless Shoes is preparing to file. Meanwhile, Amazon is opening physical stores. I visited one this weekend and was very impressed. No prices shown. All books in the store are 4 stars on Amazon or above. The books are facing the customer, as opposed to the spine. It felt much more curated than a traditional bookstore. I, like Amazon*, do not think retail is dead. Retail is being re-imagined, and I am excited for the new and improved experiences in the pipeline. Big business opportunities for those who want to help these retailers innovate.

LINKS!

Must read article on how the Trump administration will effect climate change

The truth is that President Trump has taken climate change into account for his own properties. Trump’s Ireland golf resort filed a permit application to build a sea wall, citing “global warming and its effects.”31 In Palm Beach, where Trump’s home Mar-a-Lago sits on the water’s edge, elected officials expect that sea levels in the region may increase by seven inches by 2030 and two feet by 2060.32

A great piece from the Atlantic on race in America and how Trump is a reaction to Obama’s presidency.

MUSIC!

Drake — More Life

RIP Chuck Berry — Roll Over Beethoven

*I am an investor in Amazon and unsure why people always disclose this…