171: Microsoft & Google Cybersecurity, Amazon + Affirm, Rivian IPO, OnlyFans, Jim O'Shaughnessy, Dan McMurtrie, Chip Shortage, Economic Value of Aging, iPhone Battery
171: Microsoft & Google Cybersecurity, Amazon + Affirm, Rivian IPO, OnlyFans, Jim O'Shaughnessy, Dan McMurtrie, Chip Shortage, Economic Value of Aging, iPhone Battery
"it’s a Ship of Theseus type of situation..."
People are frugal in guarding their personal property; but as soon as it comes to squandering time, they are most wasteful of the one thing in which it is right to be stingy.
—Seneca, On the Shortness of Life
👋 I’m back! Did you miss me? I missed you!
🗣🎤🎧 This is follow-up to edition #104 on Joe Rogan and Spotify, which itself was a follow-up to the Holocene-era edition #18 where I wrote about my worries regarding Spotify & podcasting.
A recent Verge piece looked at proxy measures, and it seems like my anecdotal findings about Rogan losing a big chunk of his audience and influence / reach / zeitgeistness after going exclusive were probably correct.
The headline: “Joe Rogan, Confined To Spotify, Is Losing Influence”
“Confined to Spotify”. Ouch..
A guy like Rogan has got to value reach and influence as much as money, if not more, so that has to be frustrating to him.
I bet Spotify convinced him that “everybody’s on Spotify anyway, and we’ve got a million engineers, it’ll all be great, we’ll recreate the Youtube video experience in-house, have a great podcast player, people will follow you here”…
On top of that, I still think that Rogan would end up with more money down the road if he hadn’t taken that deal, because there’s plenty of ways to monetize that don’t require injecting a middleman between you and your audience (f.ex. supporter (💚 🥃) Andrew Wilkinson wrote about paid memberships here), and wouldn’t have hurt audience growth like going exclusive.
Long-term, most of the value is in the size and intensity of the audience, so while he got mucho dollars in his pocket from the Spotify deal, he also lost a lot of long-term value if his reach in 5 years is much smaller than it would’ve been without going exclusive, and now he doesn’t even have a direct connection to his audience anymore — the subscriber list is Spotify’s, not Rogan’s, so if he ever gets out, he has to rebuild and that’ll disrupt things too.
👁👁 I wish we would invent a non-intrusive therapy to get rid of floaters inside our eyeballs (the things you see moving around as little lines and shadows under certain light conditions). It would be a nice quality-of-life improvement for many people.
🥪 I’m planning to do a longer fast this week, ideally from Monday to Thursday.
No food, only water, electrolytes (salt, magnesium, potassium), and vitamins.
It’ll be my 7th longer fast since 2019. Someday, I’ll write more about my intermittent fasting + time-restricted feeding habits, but in the meantime, this podcast on the topic is excellent.
🌱 You’ve probably heard of the “Peter Thiel question”:
“What important truth do very few people agree with you on?”Here’s one of mine…
I think that when you’re mowing the lawn, you should leave the grass cuttings right there, where they fall.
It’s mad to catch them in a bag just so you can ship them somewhere else.
I don’t know if this practice was invented by fertilizer companies — kind of like how cereal companies made stuff up about breakfast being the most important meal of the day and orange juice being good for you (27 grams of sugar per 250ml in Tropicana’s “all natural, no sugar added”, more than a full-size KitKat chocolate bar) — but all you’re doing is basically taking nutrients out of the soil and shipping them somewhere else, over and over.
Even if you have municipal composting and they’re not going to the dump and taking space/releasing methane there, it’s still volume on a diesel truck that could be used by something else.
I’ve been mowing without catching the cut grass for over 15 years, and you know what happens? Absolutely nothing. Within less than a day it dries up and falls to the bottom of the lawn, providing nutrients and moisture-retaining capabilities to this micro-ecosystem.
I’m guessing people are afraid the cuttings are just going to stay there on top of the grass for a long time and be ugly, but it’s really not the case.
If you’re one of those lawn-obsessed, King of the Hill type people, you were never going to listen to me anyway… But for the others who just want the grass to be cut and move on, try it, and when you see it’s not a big deal, keep going. It’ll save you some steps on the process too (nothing is more precious than time).
Oh, and while I’m on the topic, unless you have a baseball-stadium-sized piece of land, I recommend that your next mower is either electric or a push/reel mower.
Nobody needs that noise and those toxic fumes from half-combusted gasoline: “each weekend, about 54 million Americans mow their lawns, using 800 million gallons of gas per year. According to the U.S. Environmental Protection Agency, a new gas powered lawn mower produces volatile organic compounds and nitrogen oxides emissions air pollution in in in one hour of operation as 11 new cars each being driven for one hour. The EPA estimates that over 17 million gallons of fuel, mostly gasoline, are spilled each year while refueling lawn equipment. That's more than all the oil spilled by the Exxon Valdez, in the Gulf of Alaska.
💚 🥃 August is really slow, I guess. I’ve had fewer new paid supporters sign up than ever during the past few weeks. ¯\_(ツ)_/¯
The current math is that 4.3% of you contribute, and 95.7% read for free.
Just a reminder that if you like the food, don’t forget to tip your waiter, it really does make a difference in allowing me to continue to build this project with you:
Investing & Business
Microsoft & Google Shifting in 6th Gear on Cyber-Security
Big bucks committed as part of a push by the US federal govt to tighten things up after the recent wave of cyber attacks and high-profile ransomware events:
Microsoft said it will invest $20 billion over five years, a four-fold increase from current rates, to speed up its cyber security work, and make available $150 million in technical services to help federal, state and local governments to help keep their security systems up to date.
Google said it was devoting $10 billion to cybersecurity over the next five years, but it was not immediately clear what if any of the figure represented new spending. It also said it would help 100,000 Americans earn industry-recognized digital skills certificates that could lead to high-paying jobs. (Source)
Microsoft is already one of the biggest players in the field and has been growing aggressively in recent years, so this “four-fold increase” isn’t charity. Probably just an acceleration of existing business plans as demand is clearly going up faster than before.
This should also be good for all of the new crop of best-of-breed security companies like Crowdstrike, Okta, Zscaler, Cloudflare, SentinelOne, etc.
It also can’t hurt the cloud hyperscalers, who have strong security built-in, and sell that expertise as part of the package when they replace an on-prem setup, necessitating an in-house security team, which for some companies isn’t up to implementing best-practices and really locking things down — there are only so many security experts on the market, not every company can have its own Delta Force team.
Tech & Interactive Media, Net and Gross Margins vs Rest of S&P 500
A couple of interesting charts, via Modest Proposal:
Two great charts showing tech/interactive media vs the rest of the core of the S&P 500 in operating and gross margins. Can see the shift in tech from hardware to more software like models and the emergence of the internet completely change the margin profile
This is a good opportunity to remind ourselves that indices may keep the same names, but the components change over time, so historical comparisons may be misleading because in some ways, you aren’t really comparing a thing to itself (it’s a Ship of Theseus type of situation..).
Amazon + Affirm, BNPL Edition
Amazon is partnering with Affirm to offer some ‘buy now, pay later’ services (Affirm’s stock is up 47% pre-market). Two interesting things on this:
Someone on WSB had some good detective work on the deal almost two weeks before it was announced.
Friend-of-the-show The Dentist has a good thread on Amazon’s various payment initiatives and puts the Affirm deal in context.
Interview: Jim O'Shaughnessy (Podcast)
Bill Brewster is kicking off the second season of his podcast with a homerun:
Great conversation with a friend-of-the-show and supporter (💚 🥃), and just overall very interesting seeker-of-good-questions-and-answers about this funny game called life that we’re all playing.
They go all over the place, the past, the present, the future. They even talk about my savior, Dr. John E. Sarno (I gotta write about my years with debilitating RSI at some point).
It was also nice to see the introduction of my buddies at Koyfin as a new sponsor to the show (full-disclosure: I made my first ever private investment in Koyfin, after years of using the product daily and loving it enough to become an annoyance to the team, sending them bug reports and feature suggestions all the time — it’s great to see them killing it and building more and more cool stuff for me… uh, and for other users too, I guess).
EV Truck Maker Rivian Files for IPO @ $70bn Valuation
Best known for having big orders for EV delivery vans from Amazon, who has invested billions in it, the company has filed with the SEC and is reportedly looking for a valuation around $70bn (!), making Elon Musk quip that maybe they should at least sell 1 vehicle per billion of market cap.
It was valued at $27.6 billion for its last round of financing in January…
But I don’t care. I’m not going to invest in it, but by my calendar, we’re way behind schedule on EVs and I’m very happy to see cheap capital go to the space, or any new player accelerate what it’s building and what vehicles it brings to market.
If investors want to shovel free money to the EV space, more power to them, I support them fully and hope it’ll be similarly beneficial for the world as the great investment in fiber optics around the dot-com bubble was.
We’ve had all we needed to make volume-produced EVs for a few years now, we just need to actually do it — the main problem I see is that despite all the press releases, the legacy automakers have been dragging their feet because they all want to squeeze as much $ out of all their old platforms as possible before the switch. They’re mortgaging their long-term future for some short-term gains.
What we need are electric versions of whatever is on top of the best-seller list (F150s, RAV4s, Accords, Camrys and such).
That would sell great, and while it may eat short-term profits, it would set things up for the long-game, rather than let others get years of experience with mass-market EVs and race ahead of you on the learning curve the way Tesla has been doing to everyone else (Model S came out in 2012, and there’s still barely real competition to it that sells in any numbers).
🚗 Chip Shortage Keeps Making Victims 🛻
Toyota to cut global production by 40% [...] planned to make almost 900,000 cars next month, but has now reduced that to 540,000 vehicles.
Ford to cut F-150 pickup truck production due to chip shortage
The global semiconductor chip shortage has hit manufacturers around the world and is now causing a headache for the sex toy industry.
😬
OnlyFans Follow-Up & Dénouement (for now)
This is follow-up to what I wrote in edition #170.
So it looks like MasterCard wasn’t the main driving force behind OF having to shoot itself in the head, it was its banking partners (so what I wrote about MA probably applies to them instead — find & replace):
[Onlyfans CEO Tim Stokely] said the change came in response to an increased level of obstacles from banks, which would “cite reputational risk and refuse our business”.
“We pay over one million creators over $300m every month, and making sure that these funds get to creators involves using the banking sector,” he said, singling out Bank of New York Mellon as having “flagged and rejected” every wire connected to the company, “making it difficult to pay our creators”. [...]
“We’re already fully compliant with the new Mastercard rules, so that had no bearing on the decision,” he said. (Source)
But here came a twist that happened in true internet-time (where a week is about 6 months in the offline world). Mere days after the policy-change announcement, the company posted this statement:
🦇 Interview: Dan McMurtrie a.k.a. @SuperMugatu 🧛♂️
Back in the Mesozoic era of edition #58, I called Dan’s interview with Bill Brewer a “Top 5™ financial podcast for 2020”.
Looks like he may have done it again for 2021, this time on Brandon Beylo’s pod:
Very interesting 3-hour ride that contains a high number of “surprising bits of information”, to use Claude Shannon’s way of looking at signal and noise.
In other words, he talks about different things, or at least in different ways, with less predictability, than most other people who discuss investing on podcasts, which is valuable.
He’s clearly an 🦇 investing vampire 🧛♂️. For a dude that is turning 30, he sounds more experienced than his age would imply, which reminds me of this:
People with highly varied lives who repeatedly encounter difficult problems creating skill gain, may have effectively 10 or 50 times the life experience of somebody who's been repeating the same day over and over for decades.
There are 300-year-old vampires walking among us in the guise of free-loving serial entrepreneurs who have since taken up angel capital and opened their own martial arts dojo, and others who've lived less than 1000 non-duplicated days (< 3 years) since puberty.
Human variance in age and lifespan is far greater than chronology suggests. —Eliezer Yudkowsky
I also really enjoyed his interview on ♾ 🔁 back in May 2020. I had never linked to it because I didn’t have a newsletter back then, so let’s remedy that:
21% Sales CAGR over 50 years 📈
Science & Technology
‘The economic value of targeting aging’ ($38 TRILLIONS per extra year)
Not that it wouldn’t be the right thing to do even if there was no economic benefit, because reducing human suffering and helping people lead fulfilling lives should be an end onto itself, but this adds another argument why we should focus *a lot more* on curing the diseases of aging and repairing the damage caused by aging before it results in pathologies:
targeting aging offers potentially larger economic gains than eradicating individual diseases. We show that a slowdown in aging that increases life expectancy by 1 year is worth US$38 trillion, and by 10 years, US$367 trillion. Ultimately, the more progress that is made in improving how we age, the greater the value of further improvements. (Source)
A Publication Epidemic
In about 3 days, the number of PubMed citations to COVID-19 in PubMed (now 168,928, all in 2020-21) will exceed those for Staphylococcus (169,445, for 1881-2021).
Very few pathogens/associated clinical infection syndromes have had a larger research footprint in the literature than SARS-COV-2/COVID-19. TB and HIV are still way ahead, for now.
‘iPhone Battery — The 40-80% Lie’
It’s important to periodically check on your beliefs to see if they still apply, because even if you did great research back when you formed a position, things change… And when you find something that has changed, it’s important to update.
Based on fairly old information that was correct at the time, I’be been trying to keep my phone’s battery charge mostly between 80% and 20%, to slow the inevitable chemical degradation.
But the video above, by the excellent René Ritchie, made me update, and now I won’t bother with that anymore. I suspect many of you are probably doing what I was doing, and would find it interesting (or maybe pass it on to people you know).
It wasn’t as egregiously ridiculous and counter-productive as the people who force-quit every app manually all the time (I never did this, for the record), but it’s a “good to know”.
The Arts & History
📷🪟🪳
Is taking photos of bugs on windows a real genre of photography?
Because I kinda like it.
I bet Microsoft hates it, though…
(“bugs on windows”, get it? 🥁💥)
What if Will Hunting was a Guitar Genius instead of a Math Genius?
See for yourself:
If you leave the grass behind it helps to cut it before it gets too high - the clumps are kinda ugly. I am so happy electric mowers are so good now. But I also wonder why we have so much grass. There are acres and acres of it around that could just as easily be left wild and cut back once or twice a year (you need a tractor or brush hog). If an alien came down and saw all the constant mowing they would have to scratch whatever they have for a "head."
Great post, once again. (I've always said to leave the grass cuttings ... but no one ever listened...)