468: Investing Results, Elon Musk Bio, GitHub Copilot, Volkswagen EVs, LinkedIn & Azure, Starlink, Nuclear Floppies, and iPhone Security

"your favorite thing is out there, you just haven’t found it yet"

Nothing whets the intelligence more than a passionate suspicion, nothing develops all the faculties of an immature mind more than a trail running away into the dark.

–Stefan Zweig

🗓️ ✨2️⃣0️⃣2️⃣4️⃣✨ 🍾🎉 Happy New Year!

The start of a new year feels like a good time to zoom out and look back, if only briefly, before our gaze returns forward where it can do the most good.

2023 has been a transformational year in my life, one of those pivot points where things shift to a different trajectory. The headline there is I joined Jim O’Shaughnessy’s OSV in March. We recorded a podcast together to mark the occasion (🎧).

In their recent Holiday Special (more on that below), friends-of-the-show (💚 🥃) David and Ben from Acquired discussed a book called ‘Transitions’. I haven’t read it, but their description of it resonated.

We do better in life if we rapidly recognize transitions, accept the end of our life as it used to be, and embrace our new reality. This has to happen when we have kids, get married, or start a new job.

2023 has been a year of *very rapid* growth for me.

I think I’ve learned more in ‘23 than in the past 5 years combined thanks to getting to know many great people, working on so many creative projects, and going up multiple learning curves at the same time doing things I had never done before.

I feel it’s just the beginning. As the Haïtian proverb says:

Beyond mountains, there are more mountains.

It has been challenging as a lot of this occurred in parallel — juggling lots of balls at the same time 🤹🏻‍♂️ — but it’s oh-so-satisfying to see what used to be blank pages turn into real things.

I cannot wait for these projects to reach the finish line and for you to be able to check them out, and for new projects that are on the horizon to move from ideas to execution.

🤪😮‍💨🗓️🗓️ The kids have been home 24/7 for 7 or 8 weeks (it’s been so long, I lost track). The teachers’ strike is ending on January 9, so at least I’ve got that going for me, but my mental health will take some time to recover.

🗣️🗣️🎙️🎄 Ben & David at Acquired released a Holiday Special where they look back at the year and discuss their partnership:

• 🎧 Acquired Holiday Special 2023

Following their bromance in real-time makes me wish I had such a creative/business partner in the mold of Buffett & Munger or Jobs & Ive. A close friend to create with, a 50/50 brother-or-sister-in-arms ⚔️

It’s a nice daydream, but I’m not sure if I’m wired for that. I think I work well with others, and I love my friends and enjoy doing various projects with them.

But it’s not a 1:1 fusion type of situation.

I don’t know why 🤔

Considering how rare such long-term partnerships are, the base rate is probably *against* most people finding that Yin to their Yang. But hey! Put your authentic self out there and stay open to opportunity!

Other things I want to note in the ACQ Holiday Special:

• Congrats to Ben on expanding the family and going full-time on Acquired! 💚 🥃

• Mark Leonard’s favorite books! (I knew all of them except ‘Hard Facts’ — I ordered it)

• Friend-of-the-show Cedric Chin (🇸🇬) is mentioned! Check out the podcast we did together, I really enjoyed that conversation.

🛞🔌🚘🔋 When I visited MBI (🇧🇩🇺🇸) and his lovely wife N. in Ithaca last fall, he drove us around to show us the area. He mentioned that to relax, he often drove along a few scenic routes.

I never used to do that… until I got my EV6 electric car.

It’s so much fun to drive, I sometimes take it for a spin before bed, listening to a podcast. Doing the same with a gas car would’ve felt wasteful, but now it only uses something like 20 cents of cheap & clean hydro.

Part of what makes it so much fun is the combination of instant torque and one-pedal driving. This makes driving feel like a direct brain-to-car interface. This advantage of EVs is underestimated by those who have never tried one.

I also got an OBD2 port scanner, but I haven’t played with it yet.

With it, you can get the diagnostics and real-time telemetry from the car and send it to your phone.

I’ll write more about it when I’ve used it more, but it adds a lot of geeky fun to a car that is already pretty fun if you like data (it’s very satisfying to see the kilowatts flow back into the battery from regenerative braking).

💚 🥃 I hope 2024 will be a wonderful year for you — your favorite thing is out there, you just haven’t found it yet — but together we certainly will do our best!

Cheers! 🥂

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🏦 💰 Business & Investing 💳 💴

🌱 A Decade of Investing Results (2013-2023) 🌳

At the end of a year, most people will look back at the past 12 months, but I find that a little short-term. I try to take a longer view.

So I looked at the performance of my PA in Canadian dollars over the past decade:

2014: 47.10%
2015: -2.32%
2016: 13.50%
2017: 33.25%
2018: 7.53%
2019: 44.75%
2020: 30.53%
2021: 28.77%
2022: -27.08%
2023: 55.44%

2014-2023 CAGR: 20.5%

(This doesn’t include dividends and I couldn’t be bothered to go back and calculate them ¯\_(ツ)_/¯ )

I’m very pleased with those results, but I’m under no illusion that it’s all or even mostly due to skill, or that I should expect anything similar going forward.

Even this year’s result, which appears high, is mostly due to the arbitrary starting point of the year, which happened to be at the bottom of a fairly deep down cycle.

It’s easy to imagine the exact same starting and ending points, but if 2022 had been +5%, 2023 would’ve been a much more modest-looking number.

What matters to me is that I enjoy investing — learning about the world through companies, products, technologies, strategies and tactics, etc — and that my results allow me to meet my financial objectives.

It doesn’t matter if someone else is doing better, or if I could do better by investing in a different way if I would find it less enjoyable or if it would prevent me from doing other things I like.

If I dropped everything else in my life and spent 100% of my working hours on investing, I could study more companies, look under more rocks for opportunities… But I value the other things that I’m doing very highly, so investing will remain a part-time activity.

As I wrote about in Edition #44 (time flies!):

Investment Style and Stock Selection as Lifestyle Design

For me to want to invest in something, I have to want to spend lots of my time thinking about it, because the alternative is indexing to free me to do other things that are fun.

I’m lucky that most of the businesses that I find interesting happen to have attractive economics and that in recent times their industries have had strong tailwinds. I know it’s luck, but I’ll take it, because I have to accept the bad luck when it comes too. [...]

Let’s paint a hypothetical picture: I figure that the best returns may come from investing in mining companies and oil companies. But I have no real interest in these things… If I invest in them, I’ll be spending a lot of my time reading about and thinking about things that are not interesting to me.

That doesn’t sound like something I want to do. [...]

What’s the point of having more money if you like your life less?

That’s still how I think about it. Because I don’t invest anyone else’s money (well, other than my wife’s), I have the luxury of not having to care too much about relative performance or quarter-to-quarter comparisons to indices or any of that.

📖👍 Elon Musk biography by Walter Isaacson 🚀🔌🚘🔋

A few days ago, I finished reading this ˜700-page tome.

When the book first came out, a lot of the chatter was about how it was a bit disappointing. I think that helped lower my expectations, which was beneficial, because I enjoyed it more than I expected.

I would recommend it to anyone trying to understand Musk and his various businesses. It seems that everyone has an opinion on him, but very few people go deeper than the memes, the soundbytes, and the pre-packaged narratives created by either the fanboys or haters.

If you read this and the Vance bios (which I have also read), you get a much better picture of the man, warts and all. Like with Steve Jobs, it’s okay to have a nuanced opinion and like certain things and dislike others.

One thing I wasn’t aware of before reading this book: Musk himself, and some people around him, suspect that he may be bipolar. That would explain a lot about the cycles of more manic and more depressive phases.

It’s also clear that his impatience and impulsivity help him push things forward faster than anyone else as an industrialist but hurt him as the owner of a social media platform. Your strengths can be your weaknesses.

The book is very easy to read: It’s basically a series of vignettes, and once you get past the historical chapters, it feels like shadowing Musk for a few years: Following him around from factory to factory, meeting to meeting, media event to media event gives a sense of how hectic his life is, and how whenever things start going too well he gets uneasy and *has* to figure out a way to get back to wartime energy. He can never slow down and enjoy any success, he’s always on to the next thing (usually multiple things in parallel).

I just had a look at my Readwise app and I have 200 highlights from the book, so by this one metric, I found a lot worth remembering.

Some of my favorite parts are about how SpaceX found ways of doing things much faster and cheaper than the “cost plus” incumbents, vertically integrating and going the DIY route whenever a supplier tried to charge them $20,000 for a small steel part that ended up costing SpaceX $200 to make themselves.

Musk’s Algorithm (below) is well known, but it was fascinating to see it being applied to all kinds of situations again and again:

1. Question every requirement. Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from "the legal department" or "the safety department." You need to know the name of the real person who made that requirement. Then you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous, because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb. 

2. Delete any part or process you can. You may have to add them back later. In fact, if you do not end up adding back at least 10% of them, then you didn't delete enough.

3. Simplify and optimize. This should come after step two. A common mistake is to simplify and optimize a part of a process that should not exist.

4. Accelerate cycle time. Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted. 

5. Automate. That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out.

Bottom line: The book is worth reading if you have any interest in the man and have a genuine desire to understand him and his companies.

For the unthinking fanboys and haters, it will probably be a Rorschach test and they will cherry-pick certain passages to confirm what they already believe. But for anyone with an open mind and the ability to see nuance, it’s a good read about a very interesting human.

🤖 GitHub Copilot Chat rolls out to everyone

While Copilot itself can help generate and fix code, Copilot Chat is a companion that acts more like ChatGPT, but specialized for programming questions:

GitHub Copilot Chat is a chat interface that lets you interact with GitHub Copilot, to ask and receive answers to coding-related questions within GitHub.com and supported IDEs. [...]

Copilot Chat can help you write unit test cases by generating code snippets based on the code open in the editor or the code snippet you highlight in the editor. [...]

Copilot Chat can help explain selected code by generating natural language descriptions of the code's functionality and purpose. This can be useful if you want to understand the code's behavior or for non-technical stakeholders who need to understand how the code works. [...]

Copilot Chat can propose a fix for bugs in your code by suggesting code snippets and solutions based on the context of the error or issue. This can be useful if you are struggling to identify the root cause of a bug or you need guidance on the best way to fix it.

I gotta admit, this is an extremely high-value use case for LLMs, and Microsoft’s acquisition of GitHub in 2018 now seems like a much better deal than it seemed just a couple of years ago.

Not only are software engineers a scarce and expensive resource, but improving the productivity and quality of the code of even the worst engineers can make a huge difference.

Super coders may end up spending less time on commodity tasks and more time in deep thoughts thanks to these tools, but it may be the bottom quartile coders that see the biggest relative improvement — and by creating a floor below which it’s harder to fall, very expensive mistakes, bugs, and delays may be avoided.

I’ll be interesting to see the research on Copilot use over the years once there’s more longitudinal data on.

🇩🇪 Volkswagen, Porsche, and Audi will also switch to Tesla’s charging port for their EVs 🔌🚘

VW said it is “exploring adapter solutions” so that its current EV owners can access Tesla’s Supercharger network and expects to have something to roll out by 2025. That same year, you’ll start to see new VW electric vehicles rolling off the assembly line with Tesla’s charging port natively installed.

the deal will give its customers access to 15,000 Supercharger locations in North America.

The VW group was one of the last holdouts.

Victory for the Tesla plug is now pretty much total.

🚚📦→☁️✋ LinkedIn gives up trying to migrate its infrastructure to Microsoft Azure

Microsoft acquired LinkedIn in 2016, and yet:

LinkedIn has set aside an effort to relocate its data center technology out of its physical facilities and into Microsoft’s Azure cloud [...]

[It] announced its plan to move to Azure in 2019, three years after Microsoft acquired the company for $27 billion. [...]

Issues with the planned migration arose from LinkedIn attempting to use its own software tools instead of those readily available on Azure, one of the people said. LinkedIn is in the process of constructing an additional data center to handle its computing needs, the person said.

This is a good reminder of just how difficult and painful these full migrations are, and why most companies end up with multi-cloud or hybrid infrastructure setups.

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🧪🔬 Science & Technology 🧬 🔭

SpaceX launches first Starlink satellites with direct-to-cell capability 📡🛰️🛰️🛰️🛰️🛰️🛰️ 📲

SpaceX partnered with T-Mobile to offer connectivity directly to satellites, though it’s still early days and more testing and regulatory approval is necessary.

SpaceX claims that text capability will begin in 2024 and voice and data will follow in 2025. We’ll have to wait and see if Musk is being optimistic about timelines again…

U.S. Nuclear Weapons Arsenal Used Floppy Disks until 2019 💣💾

Not even 3.5-inch hard-shell disks. Big 8-inch truly ~f~l~o~p~p~y~ ones!

“The Air Force completed a replacement of the aging SACCS floppy drives with a highly secure solid-state digital storage solution in June,” Justin Oakes, a spokesman for the Eighth Air Force, said in an email. “This replacement effort exponentially increased message storage capacity and operator response times for critical nuclear command and control message receipt and processing.”

Old IBM mainframes from the 1970s are still chugging along, controlling the stockpile of weapons of mass destruction (there’s no other accurate term for it):

The report said that the Strategic Automated Command and Control System ran on an IBM Series/1 computer — a piece of hardware that dates to the 1970s — and used eight-inch floppy disks to manage weapons like intercontinental ballistic missiles, nuclear bombers and tanker support aircraft.

These 8-inch disks can only hold 80 kilobytes of data!

I gotta admit that using 8-inch floppies did reduce the risk of having a 22-year-old hacking into the system…

📱🔐 Apple beefs up iPhone security against stolen device takeover (the kind that really ruins your day)

There’s always a trade-off between security and convenience.

Apple could make its devices *much* more secure by making them incredibly inconvenient for users (ie. no numerical passcodes, only alphanumeric passwords, at least 40 characters long with high entropy, requiring the password every time you do anything, etc).

However, if you annoy your users to death, they won’t buy your devices.

You have to balance security against other needs. It’s a lot more common for people to forget their passwords than to have their devices stolen, so Apple has to have a way for people to recover access to their data.

This is why it’s possible to reset an iCloud password using a device’s passcode, which thieves have been using to take over people’s whole digital identities, access bank accounts, etc.

Through social engineering or simple shoulder surfing, they get people’s passcodes, and then steal the devices. Then rapidly reset the iCloud password, get access to email and Keychain (the app that stores saved passwords), get passwords for banking and other accounts, and then try to steal as much as possible.

To prevent this, Apple is making some changes in the upcoming version of iOS:

With Stolen Device Protection: If you want to change an Apple ID password when away from a familiar location [like home or work], the device will require your Face ID or Touch ID. It will then implement an hour-long delay before you can perform the action. After that hour has passed, you will have to reconfirm with another Face ID or Touch ID scan. Only then can the password be changed.

Biometrics will also be required to have access to Keychain or to add a recovery key.

This isn’t bulletproof and it won’t be activated by default at first (I recommend that you turn it on once it’s available), but it’s a big step in the right direction.

🤰🏻 One of Humanity’s Greatest Achievements 👩‍🍼

Hannah Ritchie:

One of humanity's greatest achievements is stopping women from dying in childbirth.

Maternal death rates (per 100,000 births) in the generations that came before me:

Mum: 6
Grandma: 27
Great-grandma: 300
Great-great-grandma: 450

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🎨 🎭 The Arts & History 👩‍🎨 🎥

🐜 🐝 'Honey, I Shrunk the Kids' (1989) 🥣🔍

I watched it with the kids. It was their first time.

It holds up pretty well. They seemed into it.

I remember when I first saw it as a kid, it gave me a perspective shift that made me look at everything around me differently.

I used to daydream about what it would be like to be very small in various situations (on the school bus, in the jungle, inside an ant colony or a bee hive, etc). I wonder if it will have the same effect on my kids.

The special effects of the water droplets during the sprinkler scene are impressive for the era. I have some guesses as to how they did them, very clever.

That neighbor kid is so annoying, I wish he got stepped on early in the film. That certainly would’ve raised the stakes!