What I wrote last week
SHORT-TERM vs LONG-TERM. Nick Sleep’s letters and insights are always valuable. Many companies claim to be all about long-term, but their actions scream the opposite. The list of characteristics by Nick (by no means are they complete) should help analysts see whether a company is about long-term growth or short-term wins. It is also a good checklist for executives whenever they want to evaluate their business.
Google Cloud Introduces Shelf Inventory AI Tool for Retailers. The premise of this technology sounds very interesting. Less human labor and more automation as well as data analytics. However, as the article indicates, it’s tricky to put this technology in practice. The first challenge is to perfect the algorithm. Given time, this should be feasible. The bigger challenge is cost. Imagine arming a Walmart Supercenter with cameras that can scan every aisle, level and product.
The Art and Science of Spending Money. As always, great writing and a lot of wisdom from Morgan Housel. This quote stood out from the rest for me: “Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love.”
Chick-fil-A franchise disclosure document. This may be a dry read, but this document shares the core details of Chick-fil-A’s standard franchise agreement. For instance, while the initial down payment is just $10,000, a franchisee will have to pay quite a lot of fees which can push the total investment to north of $2 million. Furthermore, readers can learn that Chick-fil-A earned almost $5.8 billion in revenue in 2021 and around $1.1 billion in profit. The net margin of 18% is much lower than the 32% that McDonald’s posted in 2021. That implies there is a significant difference between the two models.
Disney defended itself and Bob Iger against an activist investor Nelson Peltz. File it under a “business schools need to teach this” folder
Behind Disney’s Activist Investor Battle: A Marvel Mogul’s Revenge Play. A juicy article on the internal political struggle at Disney. As an investor, I am concerned about the turmoil at the top at Disney. Any company of the size and complexity of Disney must have steady and competent leadership to navigate treacherous macro-conditions and weather the fierce competition in the media industry. There has been anything but that at the iconic company since early 2020. Given that Bob Iger only has a two-year contract, this will not be solved any time soon.
Inside Elon Musk’s “extremely hardcore” Twitter. Musk has done tremendous damage to his reputation and image with the whole Twitter saga. And oh, it’s just merely started
Whole Foods charts a new course. There is nothing described in the article that convinces me Whole Foods will be in a stronger position 5 years from now. Enabling shoppers to return Zappos stuff in store? That’s just like Kohl’s. An apprenticeship to learn butchering? Yeah, that’s going to be tremendously popular. What about 3,000 local products in store? Well, it’s going to relate so much to shoppers who will have to pay a lot more just so they can feel more local.
Other stuff I find interesting
Mexico’s subway drivers depend on WhatsApp to keep the trains running. It’s both fascinating and horrifying that train workers in Mexico rely on their phones and particularly Whatsapp to keep the trains running
Lessons from the Streets of Tokyo. To copy the approach that Tokyo takes to build streets, a city in America needs to have a solid public infrastructure. Otherwise, narrow streets wouldn’t be able to handle thousands of people, especially in rush hour.
Kale, Brussels sprouts, cauliflower, and cabbage are all varieties of a single magical plant species. I did not know about this. Fascinating!
How Much Income Do You Need to Be Rich? “We all live our lives relative to our expectations. This is true in our relationships, in our careers, and in our finances. So, if we want to feel rich, we only have two options—earn more or expect less. The choice is yours. Because, ultimately, your income doesn’t determine how rich you are, your desires do.“