Rome wasn’t built in a day, but they were laying bricks every hour.
You don’t have to do it all today. Just lay a brick.
—James Clear

📉 🥱🤣 The hardest thing to do in a market crash is to keep thinking long-term.

In a true panic, almost everybody’s time horizon rapidly approaches zero, and price movements drive the narrative to a whiplash-inducing degree. Fear is a very contagious psychological condition, like laughter or yawning.

Friend-of-the-show Ray (👋) with a very cutting observation:

So funny how when a stock you don't own but like is down 30%, you suddenly feel like: damn this business is a lot more complex than I thought 😭😂

📍🗺 Modern technology is amazing.

I had some problems with my Airpods Pro. They’re still under warranty, so I shipped them back to Apple for repair or replacement.

I was able to track them from the local FedEx drop-point to a larger FedEx warehouse to Ottawa’s airport to Toronto’s airport…

If you’re curious how a tiny device *without* a GPS or a cell antenna can be located, it’s quite clever:

Once in a while, the Airpods send a Bluetooth ping. This includes some anonymized data about the device (an encrypted serial number or whatever).

Any nearby iPhone that gets that ping relays it to Apple, but it adds some meta-data about where that ping was received, thanks to the phone’s location data (based on GPS and on a constantly updated map of known wifis locations).

So when I open my “Find My” app and look up the device, I ask Apple: “Hey! do you know where this serial number is located?” and if they’ve had a ping from it, they relay it to me because I have the credentials to access info on that serial number.

I have no idea whose iPhone located my AirPods, and that person doesn’t know whose Airpods they located, yet the end result is that I can track my headphones as they travel across the country.

Any sufficiently advanced technology is indistinguishable from magic!

🎥 💻 On Friday, I signed up for a paid Zoom account for the first time.

They recently made 1-on-1 calls limited to 40 minutes on the free plan, and Zoom is the best way for me to record podcasts, so I kind of had to (I’m sure Google Meet will soon become paid too).

The good news is that I got a 50%-off coupon for the first 6 months, so there’s that. But while signing up, I noticed a few things about Zoom:

Their payment processor kind of sucks. It took longer than usual to get the payment through, and it showed that quaint “please don’t reload your browser while this is going on” popup that we don’t really see anymore.
They use dark patterns to try to get you to spend more. Without me doing anything, they bundled a whiteboard product with my subscription, and it seemed free, but the fine print showed that only the first month was free and after that, it was $3 CAD a month (for something I don’t need). When I went to my account and clicked to cancel it, it logged me out and I had to re-log in, find the subscription management page inside the profile page, and re-cancel it a second time.

Tsk tsk tsk, Zoom 👎

💚 🥃 For the price of one alcoholic drink, you get 12 emails per month (plus 𝕤𝕡𝕖𝕔𝕚𝕒𝕝 𝕖𝕕𝕚𝕥𝕚𝕠𝕟𝕤 and podcasts!) full of eclectic ideas and investing/tech analysis.

That’s pennies per edition for the Serendipity Engine!

If you make just one good decision per year because of something you learn here (or avoid one bad decision — don’t forget preventing negatives!), it'll pay for multiple years of subscriptions (or multiple lifetimes).

You can even sign up in single digits seconds on your phone with Apple/Google Pay by clicking the button below (if you don’t see paid options, it’s because you’re not logged into your Substack account):

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🏦 💰 Liberty Capital 💳 💴

NASDAQ 100 Drawdowns since 1988

Anything stands out? I think this chart shows pretty well why so many people were deeply scarred 🤕 by the dot-com crash and tech winter that followed…

You can play with the live chart here.

🎧 Part 2: Nvidia: The Machine Learning Company (2006-2022)

Friends-of-the-show Ben and David (💚 🥃) released part 2 of their Nvidia history, and it’s just as great as part 1. Make sure you listen to #1, and then check it out:

Nvidia: The Machine Learning Company (2006-2022)

It illustrates well just how many times the company bet the house on a radical new technology or direction, and how long it took for these bets to pay off, even though they all look obvious and linear in the rearview mirror. It takes conviction to keep building for years and years, investing untold millions without much traction…

📱 Cable’s The Wireless Opportunity 📶

Ben Thompson (💚 🥃 🎩) has a good free piece about cable companies’ strategic position in the digital value chain, including this interesting bit about their incursion into wireless:

What, though, makes the cable companies such effective MVNOs? […]
it turns out that cable MVNO customers are far more likely to consume data over WiFi, perhaps because of cable company out-of-home WiFi hot spots. This could become even more favorable in the future as cable companies build out Citizens Broadband Radio Service (CBRS) service, particularly in dense areas where cable companies have wires from which to hang CBRS transmitters. Moffett writes:
In a perfect world, Cable will offload traffic onto their own facilities where doing so is cheap (high density, high use locations) and leave to Verizon the burden of carrying traffic where doing so is/would be expensive. Because the MVNO agreement is “perpetual and irrevocable,” and is based on average prices (i.e., the same price everywhere, whether easy or hard to reach), Cable is presented with a perfect ROI arbitrage; they can take the high ROI parts of the network for themselves, and leave the low ROI parts of the network to their MVNO host… all without sacrificing anything with respect to their national coverage footprint.

This “ROI arbitrage” is such an interesting dynamic.

Reminds me a bit of how Amazon could always depend on the USPS and various postal services around the world to reach the most remote, hardest to reach customers, but it could use its own logistics network for people located near its existing fixed assets base.

ARM 2021 Results + China Dispute Resolved (?)

Arm, which makes the basic blueprint used to design chips, had revenue of $2.7 billion last year, up 35% from the previous year. Licensing business revenue rose 61% to $1.13 billion and royalties, tracking the numbers of chips sold using Arm technology, rose 20% to $1.54 billion. [...]
Haas said 29.2 billion chips using Arm technology were shipped last year, nearly 8 billion in the fourth quarter. He said Arm's focus on the automotive sector three to four years ago was paying off and revenue from that segment more than doubled last year thanks to electrification and increasing computing power for cars.

That’s a lot of chips!

If you divide $2.7bn by 29.2bn chips, you get an average of about 9¢ per chip.

Not altogether onerous, though we have to remember that there’s wide variability between some tiny underpowered commodity ARM chips used in some IoT fridge and the flagship SoCs used in top-end smartphones and tablets.

This part is intriguing, I gotta see if more details are available, because this story was just crazy:

Haas also reiterated that Arm has resolved a public dispute at its Chinese joint venture, ousting former Chief Executive Allen Wu. He said the venture, Arm China, makes up about 20% of the company's revenue. (Source)

Roper: Another large divestiture? 🤔 (Cash pile 📈)

Private equity firm Clayton, Dubilier & Rice is nearing a deal to buy a majority stake in Roper Technologies Inc.’s process-technology unit in a deal that values the division at as much as $3 billion [...]
The buyout firm could announce a deal for the unit as soon as this month [...]
The process-technologies unit is generating a combined $300 million in earnings before interest, taxes, depreciation, and amortization, some of the people said. It includes Roper Pumps, wastewater-processing business Cornell and PAC, which provides analytical instruments for laboratories in the hydrocarbon industry. Roper has been exploring a sale since last October. It considered separate unit sales before settling on selling as a group (Source)

This is what we’re talking about:

Clearly one of their more volatile segments, but still getting 32.5% EBITDA margins and rebounding nicely thanks to energy’s recent spike.

After the sale of Transcore and a few other smaller units recently (CIVCO Radiotherapy, Zetec), they have a huge pile of cash to redeploy. If this new deal goes through, at their usual IG leverage, we’re looking at close to $10bn in powder. It will be interesting to see if they can get significantly lower multiples on acquisitions because of the recent tech crash.

An obvious question: Is this a sign that there’s a huge asset they want to buy and are trying to raise the money for it?

I tend to doubt it. The timing of closing for these things can be hard to pin down and line up perfectly with a purchase… I suspect it was opportunistic: Someone came to them and offered a price high enough for the assets.

🧪🔬 Liberty Labs 🧬 🔭

☢️ 🇬🇦 Amazing 2 BILLION years old natural nuclear reactor in Africa

You can read the paper here for more details.

Here’s a highlight:

Isotopic compositions ofthese elements allowed for reconstruction of the effectiveneutron ﬂuence (up to 1021 n=cm2), the amount 235U consumed (>5 tons), the energy released (˜15 GW yr). Also, using ﬁssion products of 24 000 yr^239Pu, an estimate was made of the effective duration of this nuclear ﬁssion chain reaction (150 000 yr). The average power, therefore, was only about 100 kW, equivalent to a small research reactor.

A natural formation equivalent to a small research reactor ran for 150,000 years without human interventions (humans didn’t exist yet)!

🇫🇮 🔌⚡️🇷🇺 Russia cuts electricity export to Finland

A Russian energy supplier officially cut off electricity to Finland on Saturday ahead of the Nordic country’s expected announcement that it plans to join NATO. [...]
Fingrid had disclosed on Friday that Russia would be cutting off its supply to the country beginning early Saturday, but the Finnish transmission system operator said that its electricity only made up 10 percent of the country’s consumption.
“The lack of electricity import from Russia will be compensated by importing more electricity from Sweden and by generating more electricity in Finland,” Reima Päivinen, senior vice president of power system operations at Fingrid, said in a statement. (Source)

Well, I guess now’s a good time for Finland to make plans to permanently stop importing electricity from Russia…

🎨 🎭 Liberty Studio 👩‍🎨 🎥

📺 🍿 TV Show Recommendations from Matt Ball 🎥 🎬

I know that I have some taste overlap with friend-of-the-show Matt Ball (👨‍🚒), as I *loved* Fleabag a few years ago after watching it based on his recommendation, and I know he’s a big Deadwood fan too… 🤠

So I asked him for some recs, and I’m passing his answers along to you because chances are, they’re good:

Station Eleven (HBO Max)
Slow Horses (Apple TV+)
Severance (Apple TV+)
For All Mankind (Apple TV+)

(3/4 on Apple TV+… the hit/miss ratio seems pretty high there — Looks like they’re trying to be HBO, not Netflix 🤔)

I’ve heard enough good things about Severance from enough people whose taste I trust that this was on my list without even watching a trailer (I try to avoid spoilers if I know I’ll be watching something for sure anyway), and I’ve been curious about For All Mankind for a while because of the Ron D. Moore connection (he did the reboot of Battlestar Galactica), but I haven’t watched yet — I hear the first season starts a bit slow, but it’s worth sticking with it.

The other two are totally new to me. It may take a while, but I’ll report back when I’ve had a chance to watch any of these (Severance will likely be first).

Liberty’s Highlights

280: NASDAQ Crashes since 1988, Nvidia's A.I…