69: ☀️ My Thoughts on Vitamin D, Bezos Asked Buffett for a List in 1999, Alibaba vs King Kong, AT&T-1000, Sam Hinkie & Schelling Points, and Software-Controlled 500-LED Tree

"That’s the kind of seasonal content you subscribe for, I’m sure."

Ho ho ho! You’re going to have to wait until early 2021 for your 𝕊𝕡𝕖𝕔𝕚𝕒𝕝 𝔼𝕕𝕚𝕥𝕚𝕠𝕟 #𝟚 present, though.

𝕊𝕡𝕖𝕔𝕚𝕒𝕝 𝔼𝕕𝕚𝕥𝕚𝕠𝕟 #𝟙 was an interview with David Kim of Scuttleblurb (if you missed it, definitely check it out, he’s great).

Investing & Business

Buffett’s Famous 1999 Speech had Big Impact on Bezos

Source. Via NeckarCap

An Ivy League CloudFlare Education (at a Good Will Hunting Price)

I still haven’t finished this one fully, because it’s another Muji Magnum Opus, so it takes a while, but I’ve read most of it and it’s good.

If you’re interested in the company and want to learn more about what they’ve been up to — and they’ve been up to a lot lately — this is the place:

Note: this is a business write-up, not a financial one. It's about products, markets, competitors, strategy, technology, not margins, revenue, free cash flow, etc.

Here’s Muji’s badass description of CloudFlare that the company should probably just cut & paste in the 10K:

Cloudflare is an edge network, currently with 51Tb+ of global network capacity that is interconnecting with nearly 9000 outside networks (ISPs, cloud providers, internet exchanges, and customers). Their edge network is generally accessed via 200 Points of Presence (POPs), strategically situated across 100 countries – putting the vast majority of the world within 100ms of their edge. They handle 18M+ web requests per second on average, hitting 25M+ protected web sites and services -- which means they typically handle ~1.5 trillion web requests a day. The insights gained from handling all that traffic then powers a threat intel system that protects the edge network and its customers, which blocks an average of 72B cyberthreats a day.

Crowdstrike’s Gross Margin Modularity

Crowdstrike’s CFO explaining the leverage they get from selling more modules (that all run on the same agent) to existing customers:

the beauty of the model is after you purchase your first module, every module after that is virtually gross margin. And so obviously, the more modules we have, the more opportunity to enhance our gross margin. And you've seen the adoption rates from our earnings call, when we have 4, 5 or 6 modules bought by the customers in over 60%, 40% and over 20%, respectively. And that's exciting for us. All of those have been growing. And at some point, we're going to be dropping how many of our customers have 4 or more because it's going to get closer and closer to that 100%, and you will only be talking about 5, 6 and 7. And then similarly, we're going to drop 5 at some point. And we talk about 6, 7, 8. So those are the things that really get us excited and really get me excited about how I think about gross margins from a modular perspective.

The CEO on being their own first-customer for their cloud workload protection stack:

as you might imagine, we have a really large cloud, and we have specific requirements. So we actually built our own technology [for ourselves] and perfected that over a number of years and now really just commercialized that and made that another module focusing on understanding the configuration and the posture of IaaS and PaaS type environments. [...] I think it plays a tremendous role in helping secure the cloud because it's not just about the workload protection, it's also about the configuration and the errors that can occur and the risks that can occur from those errors

Jack Ma’s Problems are Metastasizing

I wrote about Jack Ma’s Ant problem in edition #67. It looks like it’s now also an Alibaba problem:

China’s market regulator on Thursday announced an antitrust investigation into Alibaba [...]

The investigation is one of the first of its kind into a large Chinese tech company and comes as authorities are subjecting Alibaba’s ecommerce and fintech activities to an unprecedented amount of scrutiny.

The market regulator said it was investigating suspected monopolistic practices, including Alibaba’s tactic of forcing merchants to sell exclusively on its platform, a practice known as “pick one of two” in China, among other issues. (Source)

As I’m writing this, the stock is down ˜17% to $213.

Makes you wonder if this is purely a Jack Ma problem, or if Tencent is next as the CCP keeps flexing and showing the big tech gorillas that King Kong is still in the jungle.

E pluribus unum… duorum (‘out of many, one’ — well, two)

I think most of us probably know the outline of the AT&T story (getting split up, and re-forming like the T-1000 into AT&T and Verizon — or AT&T-1000, if you will), but it’s cool to see it all visually like this:

h/t Jerry Capital

Interview: Sam Hinkie, 2018 Edition (+ Schelling Points)

I liked Patrick O’Shaugnessy’s recent interview with Sam Hinkie, so went back and re-listened to his 2018 one:

In it, Hinkie mentioned the concept of a Schelling Point in passing, and I kind of knew what he was taking about (I have a Thomas Schelling book on my shelf, which automatically makes me smart — right?), but I didn't really get it, so i looked it up.

Figure some of you may also find it interesting:

In game theory, a focal point (or Schelling point) is a solution that people tend to choose by default in the absence of communication.

Schelling states that "(p)eople can often concert their intentions or expectations with others if each knows that the other is trying to do the same" in a cooperative situation (at page 57), so their action would converge on a focal point which has some kind of prominence compared with the environment. However, the conspicuousness of the focal point depends on time, place and people themselves. It may not be a definite solution. (Source)

Here’s a real-world example of what this may look like:

a game show in which two strangers were separately taken to random places in New York and promised a prize if they could successfully meet up; they had no communication with one another and no clues about how such a meeting was to take place. Here there are a nearly infinite number of possible choices: they could both meet at the corner of First Street and First Avenue at 1 PM, they could both meet at First Street and Second Avenue at 1:05 PM, etc. Since neither party would regret their actions (if I went to First and First at 1 and found you there, I would be thrilled) these are all Nash equilibria.

Despite this mind-boggling array of possibilities, in fact all six episodes of this particular game ended with the two contestants meeting successfully after only a few days. The most popular meeting site was the Empire State Building at noon.

How did they do it? The world-famous Empire State Building is what game theorists call focal: it stands out as a natural and obvious target for coordination. Likewise noon, classically considered the very middle of the day, is a focal point in time. These focal points, also called Schelling points after theorist Thomas Schelling who discovered them, provide an obvious target for coordination attempts.

What makes a Schelling point? The most important factor is that it be special. The Empire State Building, depending on when the show took place, may have been the tallest building in New York; noon is the only time that fits the criteria of “exactly in the middle of the day”, except maybe midnight when people would be expected to be too sleepy to meet up properly. (Source)

It feels like a lot of this is taking place in markets, and a lot of technical analysis is probably a kind of variant of this aspect of game theory. But thinking about focal points in other areas can probably bear fruit too.

...and it's when you stop worrying that the real trouble begins

Science & Technology

The nearest country to every part of the United States

I had never heard of Kiribati, though after looking it up, I recognized Tarawa from WWII history books.

The permanent population is just over 110,000 (2015), more than half of whom live on Tarawa atoll. The state comprises 32 atolls and one raised coral island, Banaba. They have a total land area of 811 square kilometres (313 square miles) and are dispersed over 3.5 million km2 (1.4 million sq mi).


☀️ Vitamin D to Fight COVID19 (and just generally beneficial) ☀️

Open letter from over 100 doctors and scientists to advocate for the use of vitamin D supplementation to fight COVID19.

Research shows low vitamin D levels almost certainly promote COVID-19 infections, hospitalizations, and deaths. Given its safety, we call for immediate widespread increased vitamin D intakes.

Vitamin D modulates thousands of genes and many aspects of immune function, both innate and adaptive. The scientific evidence1 shows that:

  • Higher vitamin D blood levels are associated with lower rates of SARS-CoV-2 infection.

  • Higher D levels are associated with lower risk of a severe case (hospitalization, ICU, or death).

  • Intervention studies (including RCTs) indicate that vitamin D can be a very effective treatment.

  • Many papers reveal several biological mechanisms by which vitamin D influences COVID-19.

  • Causal inference modelling, Hill’s criteria, the intervention studies & the biological mechanisms indicate that vitamin D’s influence on COVID-19 is very likely causal, not just correlation.

Rates of vitamin D deficiency <20ng/ml exceed 33% of the population in most of the world, and most estimates of insufficiency <30ng/ml are well over 50% (but much higher in many countries). Rates are even higher in winter, and several groups have notably worse deficiency: the overweight, those with dark skin (especially far from the equator), and care home residents. These same groups face increased COVID-19 risk.

This part below is important, because people always react when I tell them how much I take, and will often stick to the official recommended daily doses or cite studies that show little effect but where the participants were given puny doses (500 UI, 800 UI):

It has been shown that 3875 IU (97mcg) daily is required for 97.5% of people to reach 20ng/ml, and 6200 IU (155mcg) for 30ng/ml, intakes far above all national guidelines. Unfortunately, the report that set the US RDA included an admitted statistical error in which required intake was calculated to be ~10x too low. Numerous calls in the academic literature to raise official recommended intakes had not yet resulted in increases by the time SARS-CoV-2 arrived. [...]

Decades of safety data show that vitamin D has very low risk: Toxicity would be extremely rare with the recommendations here. The risk of insufficient levels far outweighs any risk from levels that seem to provide most of the protection against COVID-19, and this is notably different from drugs & vaccines. [...] Vitamin D’s safety is more like that of face masks. There is no need to wait for further clinical trials to increase use of something so safe, especially when remedying high rates of deficiency/insufficiency should already be a priority.

I’ve been supplementing for over 15 years, and posted about it in relations to COVID19 on March 17, 2020 on Twitter.

I take 5,000 UI during the summer and 8,000 UI during winter — increased to 10,000 UI this winter — in gelcap form, because it’s fat-soluble and better absorbed that way than with dry tablets. Also with a meal, which also has been shown to improve absorption significantly.

I also give my kids liquid Omega 3 that also contains some vitamin D daily, as I think both are very asymmetric propositions for children (very safe, and potentially very good for healthy development).

Glad to see this letter, but it seems a bit late in the game… I think it would’ve been extremely asymmetric for health agencies everywhere to suggest supplementation of their populations, since we know it’s basically safe and very cheap, so the worst case is that it didn’t help with this particular virus, but would still help public health and wouldn’t be wasted.

One clever aspect of the letter is that there’s the recommended dose by each doctor/scientist, and then there’s their own daily intake. This should be common practice in more of these public letters where it’s applicable, the whole ‘skin in the game’ thing.

Thankfully, the info still circulates and many probably started supplementing this year, but probably mostly the groups that need it least (well-informed, health-conscious, doing research online — so not necessarily unhealthy seniors in long-term care residences).

Security Expert Bruce Schneier on SolarWinds Hack

This is the important aspect of this that some people miss: It’s not over just because the breach has been detected and the Orion software is removed:

It’s unlikely that the SVR (a successor to the KGB) penetrated all of those networks. But it is likely that they penetrated many of the important ones. And that they have buried themselves into those networks, giving them persistent access even if this vulnerability is patched. This is a massive intelligence coup for the Russians and failure for the Americans, even if no classified networks were touched. (Source)

There’s also a good thread about the hacks here by Peregrine Trader.

"Everyone is in damage assessment now because it's so big," Dickson said. "It's a severe body blow to confidence both in government and critical infrastructure."

"Analysts have said the attacks pose threats to national security by infiltrating key government systems, while also creating risks for controls of key infrastructure systems such as electric power grids and other utilities."

"A Trump administration official tells Axios that the cyberattack on the U.S. government and corporate America, apparently by Russia, is looking worse by the day — and secrets may still be being stolen in ways not yet discovered."

The Arts & History

‘I wired my tree with 500 LED lights and calculated their 3D coordinates’

That’s the kind of seasonal content you subscribe for, I’m sure.

Expanding the GIF Side-Business

In what will seem like a waste of time to some, but was fun to me — and if life isn’t in good part about having fun, what is it about? — I’ve made some Wes Anderson GIFs. You can see them in this thread.

I had previously made some Deadwood GIFs.

My Silly Xmas Tradition

I’ll leave you with Skinny Santa.

Many years ago, when I still lived with my parents, my mother bought this porcelain Skinny Santa. She didn’t think that much of it, but I thought he was really funny, and every year I’d take it out and put it in a different location around the house during the holidays.

It became a tradition, and she gave it to me when I moved out. Now every year, I try to have it on display somewhere in the house.

Hopefully it’ll be something my kids remember and look back on it with a smile!