51: John Malone Tried to Buy Netflix, IPO Mania, Roblox, Softbank's Day Trading, Ackman, Amazon, Stripe, Apple ARM Macs Again, and Vitamin D

"It was clear where he was headed. If he didn’t understand yet, he would.”

Nov 13, 2020

Technology is the main reason why so many people are alive to complain about technology. —Gary Kasparov

3 days after publication, the special edition interview with David Kim got 6,200 views, which isn't bad for a newsletter with 2,166 subscribers.

I'd say that's a sign of product market fit.

You guys and gals like these kinds of interviews, eh? Noted.

Sadly, there's just one David, but I'll try to do more in that vein, if I can.

Investing & Business

That Time John Malone Tried to Get DirectTV to Buy Netflix…

“I tried when I chaired DirecTV to acquire Netflix, and that was when [Hastings] was struggling with getting rid of his old mail platform. What I saw was global scale…” [...]
The Liberty Media founder and chairman said he had invited Netflix co-founder Reed Hastings to a Liberty board meeting “and he assured us all that he had no intention of producing his own content … to which I responded ‘bullshit.’ It was clear where he was headed. If he didn’t understand [yet], he would.”

Malone went futurist for a bit:

“I think for me the message is very clear. There is not going to be any more mass media. Media will be the computers of individuals, and every individual will have a deep database on them in the hands of large organizations who are going to use artificial intelligence to service and exploit the knowledge of that individual.”

They also asked Malone about a bunch of media businesses:

[Malone is] “definitely a buyer” of Amazon [...]
Google parent Alphabet: “OK, I would own that stock.”
Facebook: “I would own that stock”(A caveat he noted — both Alphabet and Facebook might face regulatory headwinds.)
Netflix: “Overpriced.”
Disney: “Overpriced.”
Discovery: “I love it.”
Studio business: “Really tough.”
Movie theaters: “Dying.”
Broadcast networks: “Traditional vehicles [are] going to go.”

You can see the video of the interview here (but it won’t play for me because it’s geo-blocked in Canada… What a bunch of BS).

Source. h/t Redwood Capital

It’s Raining IPOs (DoorDash, Wish, Roblox, Airbnb)

Between early and mid-December, public investors will likely get their first crack at buying stock in food delivery provider DoorDash, e-retailer Wish and kids gaming company Roblox, according to people familiar with the matter. Airbnb is also expected to file its prospectus by early next week (Source)

I’ll be especially curious to look at that Robox S-1 (and read whatever Matthew Ball has to say about it — Hi Matt!).

As ‘BDR529’ said (you need a catchier Twitter alias BDR, for real):

the TAM is global weekly chore allowances

Update: BDR529 told me that his username is actually the license plate of the Blues Brothers' car. Mea culpa, that’s actually cool. I've seen that movie like 15 times, the only thing I can watch with my father and we're both laughing all the time. Never memorized the plate though.

Here’s a keynote video by Roblox’s founder and CEO David Baszucki explaining what they’re up to. I haven’t had a chance to see it yet, but it’s recommended by Rishi Gosalia, so it must be good.

Update: Right before publishing this, DoorDash filed its S-1.

DoorDash reported $1.9 billion in revenue for the nine months ended September 30. That’s up from $587 million during the same period last year.

Softbank’s “SB Northstar” Public Market Tech Investing Unit

SoftBank has lifted the lid for the first time on “SB Northstar”, the new unit set up to play the market in tech stocks, and revealed that it has racked up trading losses of $3.7bn so far.
Until now, SoftBank has shrouded the unit in secrecy, declining to say who was in charge of the unit or what its decision-making process was, after the FT revealed that it was the so-called “Nasdaq whale” buying billions of dollars of derivatives on US tech stocks over the summer.
On Wednesday, however, SoftBank said that Akshay Naheta, a 39-year-old former Deutsche Bank trader now based in Abu Dhabi, manages SB Northstar, which is registered in the Cayman Islands. [...]
Mr Naheta has a reputation for complex derivatives trades, last year masterminding SoftBank’s controversial bet on the shares of Wirecard, the now collapsed payments company. [...]
by the end of September, Northstar had purchased nearly $17bn of shares in US tech companies, including $6.3bn in Amazon, $2.2bn in Facebook, $1.8bn in Zoom and $1.4bn in Alphabet. It invested another $3.4bn in equity derivatives. [...]
SoftBank revealed on Wednesday that, at the end of September, Northstar managed $21bn of its $43bn cash pile, which has swelled as the group has executed a series of asset sales under pressure from activist investors such as Elliott Management. [...]
Northstar has a $4.1bn short position on credit markets, although it is unclear if this is an outright bet against corporate debt markets or a hedge against one of its other positions. (Source)

🤔

‘Ackman places new bet against corporate credit’

Speaking of Ackman, he’s betting against corporate credit again:

the new hedge is close to 30 per cent the size of the bet he placed in late February, when he bought a set of huge insurance policies linked to $71bn of corporate debt. [...]
Mr Ackman said he remained optimistic about the economy over the long term, saying that it was likely to see a “robust recovery”, but he predicted the next few months would be “a challenging time”.
Pershing Square placed its new bet against corporate credit on the day that Pfizer and BioNTech released positive trial data on their Covid-19 vaccine, causing markets to take a sudden bullish turn.
The news was “actually bearish for the next few months,” however, Mr Ackman said, because it was likely to make people more complacent about wearing masks and less likely to view the virus as a threat. (Source)

Amazon: What Day is It?

Daniel Gross writes:

Using Amazon correctly feels like dodging a Windows XP toolbar installer. Defaulting to Subscribe & Save, sprinkling paid within organic search results, etc. Lots of dark UX.

While I’m sure that a lot of what they do is quite profitable, I tend to agree that they’ve been going too far lately, and should pull back a little to improve the customer experience.

Investment Knowledge vs Investment Process

Bluegrass Capital writes:

Mature companies benefit from lower churn, thus can compound faster than new entrants who have less stable relationships with customers, employees, and shareholders. The same is true for investment knowledge. The most important principles are the stickiest and understanding that bedrock allows for more efficient processing of new information. Value proposition, unit economics, return on invested capital, reinvestment, moats, incentives, alignment.
In your base of investment knowledge, resist change until the very end. Be a reluctant follower. Go slow to go fast.
The investment process is different. It’s less stable and benefits from constant tweaking. How value was determined a decade ago is different than today. Where value was available a few years ago may not be the same as a few years hence. Yesterday's highest signal information may not be the same source of tomorrow's. Book value, business model, content versus distribution, investment stage, regulatory capture, Wall Street Journal, Value Investors Club, Fintwit, Substack.
In your investment process, jump at the opportunity to change. Be a pioneer. Burn the ships.

Stripe’s Co-Founders Have a Sense of Humor…

This is in the context of rumors and speculation that Bill Ackman may be trying to investing in Stripe via his SPAC because he followed the two brothers and the company’s account on Twitter a little while back… (I mentioned this rumor in edition #40).

Science & Technology

Electro-Mechanical Drives vs. 3D NAND Solid State Drives

I'm impressed by how long spinning-platter disk drives have been sticking around, and how much juice Western Digital and Seagate have been squeezing out of that ancient tech.. But the trend is clear ⬆︎

we are amazed at the amount of innovation that continues to go into the last electromechanical device still in use in computing, which from a commercial standpoint started out with the tabulating machines created by Herman Hollerith in 1884 and used to process the 1890 census in the United States, thus laying the foundation of International Business Machines. Which, not coincidentally, created the first magnetic storage drive, a rotating drum called RAMAC, in 1956 and which was an innovator in disk storage for decades before it sold the business off to Hitachi in 2002 and which was acquired by Western Digital in 2012.

On the solid-state storage side, here’s some of the latest innovation from Micron:

Micron entered the market sixteen years ago, way back when 90 nanometers seemed very small dimensions for chip-making processes. The 176-layer NAND that Micron is announcing today and shipping in 512 Gb devices that are going into its Crucial brand of consumer SSDs to start is the fifth generation of 3D NAND chips [...]
The first generation of 3D NAND from Micron had 32 layers, and the second stacked up two of these to create 64 layers. With the third generation, there were two stacks at 48 layers each, and with the first generation using the RG technique to create stacks of 3D NAND, there were two stacks at 64 layers each to get to 128 layers. [...]

This is pretty cool stuff, some nice engineering that we take for granted when our phones and laptops are able to store hundreds of gigabytes of data super quickly, reliably, using lower power, and with very low failure rates (either error rates, or failures-per-year for the whole drive).

that new 176 layer 3D NAND is actually two stacks running at 88 layers each, and given the progression of the 3D NAND generations, you would have only expected 80 layers each, so Micron did 10 percent better than its history would have expected, with the addition of 24 layers instead of 16 layers with this bump. Using the current 176L technique, Micron is able to put as many layers into the same physical height that was needed by its second generation 64L flash generation, which helps increase the storage density [...]
Micron was able to deliver about 40 percent higher layer count than its nearest (and unnamed) competitor, and added that the device was able to deliver a data transfer rate across the Open NAND Flash Interface (ONFI) bus of to 1,600 MT/sec, which is 33 percent higher than its 96 layer floating gate high volume NAND flash. The 176 layer flash also has a 35 percent better read and write latency compared to that same volume flash. (Source)

First Real-World Benchmark of Apple’s new ARM Macs with M1

As René Ritchie said (he’s one of the smartest people at analysis Apple tech and products, btw):

Nobody remembers to disable/prevent/opt-out automatic uploads to Geekbench when testing new hardware. Nobody. 😂

So while the new ARM Macs haven’t yet shipped to customers, some Apple employee has probably run Geekbench on it and the results have been uploaded to the site (that was the new Air, there’s also one for the new Macbook Pro)

Btw, note that Apple has only updated the low-end MBP so far, and the higher-end models will likely be faster and more powerful and support more RAM than this one… It’s a little bit more complex to support lots of RAM with this SoC because the memory is on the same die as the CPU and GPU cores and everything else, so putting 32gb of RAM in there is starting to get you into ridiculous transistor-count territory. I don’t know if they’ll keep all RAM on-die for the more powerful models or if they’ll split it, with some on-die, and some on an external bus. This could be a nice trade-off…

Back to the M1: With a single-core score of 1687 and 7433 multi-core, this thing is a beast, especially considering this is in a $999 fan-less 2.8lbs laptop.

As Ryan Jones puts it well:

HOLY. FUGGIN. SHIT.
$999 MacBook Air with no fans is:
1) faster single core by 30% than *every Mac ever* (yes including iMac/Mac Pro)
2) faster multi-core than every Mac ever except iMac/Mac Pros with 8+ cores ($5k)
🔥

That’s what you call value computing… Meanwhile, Intel is going 😱 (AMD would also feel a bit down if it wasn’t so busy vacuuming up Intel market share…).

The benchmark also revealed that the frequency is 3.20 GHz, which isn’t a number that was public before this. Of course, this is just the peak frequency, most of the time it’s probably clocked a lot lower and only using the low-power cores to sip electrons and maintain that 15-20h battery life (did I mention the Air is a 2.8lbs laptop with no fan?).

‘Vitamin D Supplementation Improves Cognitive Function…’

Interesting double-blind, randomized, placebo-controlled trial in Tianjin, China:

Vitamin D Supplementation Improves Cognitive Function Through Reducing Oxidative Stress Regulated by Telomere Length in Older Adults with Mild Cognitive Impairment: A 12-Month Randomized Controlled Trial [...]
Conclusion: Vitamin D supplementation for 12 months appears to improve cognitive function through reducing oxidative stress regulated by increased TL in order adults with MCI. Vitamin D may be a promising public health strategy to prevent cognitive decline. (Source)

And they just did 800 IU/day, which is pretty small.

I tend to take 5,000 IU/day during the summer and 8,000-10,000 IU/day during the winter, but I’m a 6’1” male in Canada who spends most of his time indoors, so the situation in Tianjin may be different (though looking at the map, the latitude isn’t exactly sunny…). I’ve been doing that for at least 15 years.

Make sure you take D3 gelcaps, not dry tablets. Vitamin D is fat-soluble and much better absorbed that way. Also better absorbed with a meal:

Many patients treated for vitamin D deficiency fail to achieve an adequate serum level of 25-hydroxyvitamin D [25(OH)D] despite high doses of ergo- or cholecalciferol. The objective of this study was to determine whether administration of vitamin D supplement with the largest meal of the day would improve absorption and increase serum levels of 25(OH)D. [...]
The mean baseline serum 25(OH)D level (+/-SD) was 30.5 +/- 4.7 ng/mL (range 21.6 to 38.8 ng/mL). The mean serum 25(OH)D level after diet modification (+/-SD) was 47.2 +/- 10.9 ng/mL (range 34.7 to 74.0 ng/mL, p < .01). Overall, the average serum 25(OH)D level increased by 56.7% +/- 36.7%. A subgroup analysis based on the weekly dose of vitamin D was performed, and a similar trend was observed. Thus it is concluded that taking vitamin D with the largest meal improves absorption and results in about a 50% increase in serum levels of 25(OH)D levels achieved. Similar increases were observed in a wide range of vitamin D doses taken for a variety of medical conditions (Source)

US Elevation Tiles

I think it's wild that California has the highest point in the contiguous US and the lowest point and they aren't really too far from each other. (Source)

Source.

The Arts & History

The Queen’s Gambit (episode 1)

Watched the 1st episode of 'The Queen's Gambit' (2020, Netflix).

I’ve seen so much praise for it lately, my expectations were a bit high. But so far it's really strong, lots of good moments, I like the actors. Not quite sure where it's going yet, I hope they side-step the usual orphanage tropes.