337: Constellation Software 2022 M&A, U.S. Immigration is Off, Costco Hot Dogs, GE Wind Power, AI Sports Coach, Rucking, and 600 Years Old Painting
"it’s been a while since we had a ‘Teraton Asteroid Impact’"
If you want him to do it, you've got to change the picture of the world inside his head. –Robert Penn Warren
🚶🏻♂️🎒🧱 I’m excited. I may have found my second sport!
(I don’t count bodyweight exercises as a sport, so I’ve only got running)
Rucking, or walking with a rucksack, is the most obvious thing in the world once you think about it — if walking is great for you, how about walking with extra weight!
Better cardio, more strength and endurance. No wonder every military in the world uses it heavily to whip recruits into shape.
Somehow I had never really considered it, but I wish I had started years ago, I’m sure it would’ve done me much good.
I’ll never find the time to consistently walk 5x or 10x more TIME per week than I do, there’s just not enough hours in a day. But I can pretty easily increase the BENEFIT that I’m getting from that same amount of walking by adding weight, and progressively increasing it over time.
You know me, I’m a gear nerd, so I immediately looked up the best equipment to do this. The Rucker 4.0 25L is already on my wishlist, but I’ll try to hold off on it as long as I can, because it’s not necessary.
In the meantime, I can simply use my old university backpack with heavy textbooks, or sandbags, or bricks covered in duct-tape (so they aren’t too abrasive and destroy the backpack fabric).
Part of the beauty of the activity is the low cost and simplicity, so I’ll try to keep it that way as long as I can. But those ex-special-ops-designed Goruck bags with metal plates look mighty tempting… 😅
💚 🥃 🐙 If you are not a paid supporter yet, I hope this is the edition that makes you go:
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✨ Constellation Software 2022 M&A ✨
Friend-of-the-show C.J. (🍁) shared a few graphs on Constellation from RBC (another one here, list of M&A here). I particularly like this one 👆 that shows capital deployed since 2016, plus 2022 year-to-date (three quarters in).
Eyeballing things, it looks like 2022 will probably end with 10x+ capital deployed in acquisitions vs 2016.
If we just pretend that they deploy as much capital in Q4 as the average of the previous Qs, that’s a CAGR of 49.33% in the growth of capital deployed since 2016 🤯
It’s not a straight line, you can see how 2020 was lower (though is that just the pandemic effect?)… But the renewed fervor in going after larger deals will no doubt help — even if that should be very lumpy too.
Friend-of-the-show and supporter (💚 🥃) Damien C. Tanner pointed out a very interesting acquisition that Topicus made in Q3:
RiskSpectrum is a risk and reliability software solution for the nuclear energy market, and is used by 60% of nuclear power plants globally. The solution was acquired from Lloyd's Register. We estimate RiskSpectrum generates $4.7MM revenue per annum and Topics paid $3.7MM for the company. RiskSpectrum is based in Sweden.
For more on Constellation, check out this podcast:
🗽 U.S. Immigration is still off 🇺🇸
as of June, there were about 1.7 million fewer working-age immigrants living in the US than there would have been if immigration had continued at its pre-2020 pace, he said. About 600,000 of those are college-educated. [...]
The once-in-a-generation labor deficit has seen US employers struggle to hire and keep employees over the past two years, with those in construction, hospitality, and services -- which all historically rely on a greater proportion of immigrants -- feeling more pain. The shortage of both US-born and foreign workers has also triggered higher wages across industries, adding more fuel to the hottest inflation seen in about four decades.
🌭 Costco *is* making money on its hotdogs 🌭🌭🌭 🛒
So many fighting-inflation memes about Costco’s hotdogs. Friend-of-the-show Trung Phan (🎤) surfaced Jim Sinegal’s transcript where he says they’d basically have to raise the price of the iconic hot dog over his dead body, and all the clever ways that they’ve been able to keep prices down by vertically integrating hot-dog supply chain, etc.
At the end of the day, whatever they call it, this hot dog is a classic loss-leader and worth way more than the direct profit/loss.
Anything that improves the chances of getting someone in the store reduces the chances that they’re going to churn off their membership. Even if the effect is relatively small, at Costco’s scale, I have little doubt that they’re making a lot more on those hot dogs indirectly than whatever the ingredients cost.
Not only that, but all the so-called ‘earned media’ that the hot dog is bringing the company. How much would they have to pay to have ads that are talked about as much as this damned hot dog? To create affinity and positive associations with customers? Make being in the store feel more pleasant?
Just the media value of the hot dog must easily pay for all the COGS that go into keeping the hot dog on the menu.
I mean, I can’t prove it, but I’d take those odds ¯\_(ツ)_/¯ COST 0.00
‘GE is laying off 20% of its workforce devoted to onshore wind power’ 🌬
“We are taking steps to streamline and size our onshore wind business for market realities to position us for future success. These are difficult decisions, which do not reflect on our employees’ dedication and hard work but are needed to ensure the business can compete and improve profitability over time,” a spokesperson for GE Renewable Energy told CNBC. [...]
According to analysis from Melius Research, GE’s renewables segment is going to generate between $15 billion and $16 billion in revenue this year, and onshore wind will make up the vast majority, roughly 70%.
Wait, isn’t wind power supposed to be growing quickly and creating lots of ‘green jobs’? GE 0.00
🧪🔬 Liberty Labs 🧬 🔭
🏋️♀️ 🚴♀️ ⛹️♀️ 🤖 AI sports/fitness coaches?
I’m not thinking of the “personalized fitness” apps that already exist.
Rather, I feel that at the very elite levels of Olympics athletes, it may be possible with machine learning to create even more effective training/recovery regimens, in large part because of how quantified the lives of these athletes already are, and that they’re willing to go very far to gain tiny edges over their competition.
Once you have all the data on exactly how someone trains, exactly what they eat, how they sleep, all kinds of sensors with data, video recordings of training sessions and videos of every other past competition and every other competitor, bloodwork, genetics, continuous blood glucose monitoring, hormone panels, etc.
You may be able to find all kinds of useful correlations that a human coach, with their limited ability to ingest the data and make inferences on it, may not be able to see.
You may also have the ability to detect ways to optimize performance that may be counter-intuitive and would never be apparent to human coaches. Or just the level of detail; oh, your magnesium could be tweaked by X and your protein intake could be improved by changing the ratio of amino acids and your sleep should be better if your bedroom is 2 degrees cooler and we could retrain your gait to be slightly different so the biomechanics are more efficient, etc.
Whatever, I’m just pulling stuff out of the air, I’m sure the pros would know what to focus on.
And the interesting next step is that this kind of stuff will come for the rest of us, in a cut-down version.
Regular people won’t be as quantified as elite athletes, but with the increasing number of sensors in our devices and some basic tracking of what we’re eating (ideally by just taking photos of our plates and letting machine learning figure out the calories/macros), we could get part of the way there, and get some of the same benefits. Hopefully with a kind of 80/20 rule where you get a lot of the benefits without having to run on a treadmill hooked up to VO2 max equipment.
📆 Days Since Incident 🌎
Well, I can’t say it better than Mark Frauenfelder:
Days Since Incident is a constantly updated list of earthquakes, typhoons, tsunamis, asteroid impacts, volcanic eruptions, tornadoes, etc. According to the site, 235 days have passed since the last 5 kiloton asteroid impact, 2,540 days since the last 100m megatsunami, and 75,780 days since the last mega-colossal volcanic eruption (which occurred in Indonesia on April 9, 1815). — MF
The website is a list of types of incidents that you can scroll through.
Thankfully, it’s been a while since we had a ‘Teraton Asteroid Impact’ 😬
🧬 Cost to sequence the full human genome 🧬
Illumina — a company which has some 80% share of the global gene sequencing market — unveiled two new sequencing instruments this week. The company claims these tools will bring the cost of sequencing a full genome to less than $240 and give the company capacity to sequence ~20,000 genomes a year, up from 7,500. Tell those numbers to a scientist from the year 2000, when one human genome sequence would cost close to $100m, and they'd likely laugh you out of the lab.
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🎨👨🎨 This painting is 600 years old (!) 🖼
If you know a little art, you know that this isn’t what paintings looked like in the mid-1400s…
The Cultural Tutor writes:
And that mirror in the background is barely ten centimetres across, yet it contains a reflection of the entire room.
Including the artist at work, one of the greatest painters who ever lived, a man called Jan van Eyck…
[...] things like perspective and depth weren't a feature of Medieval art. Saints weren't drawn "realistically" - it was more important that they could be recognised. Often their paintings weren't set in a specific place; the background was decorative, even plain gold.
Jan van Eyck, born in the Netherlands in 1390, who would take Gothic art to its extreme. His greatest achievement was to bring an almost unbelievable realism of detail and texture to painting.
His artistic heritage - of Gothic ornateness and disinterest in idealism - led him to focus very deeply on the texture of *things* as they actually appeared. He added layer upon layer of detail until they became - via a different method to the Italians - realistic. [...]
Remember that van Eyck was doing all this before Leonardo da Vinci was even born.
The whole thread is fascinating, and includes many images to illustrate what others were doing at the time and some highlights of van Eyck’s attention to detail.
If you want to go deeper into this rabbit hole (🐇), Wikipedia has lots of his paintings in high-resolution, and a very detailed page about his life and work.