Weekly reading – 25th March 2023

What I wrote last week

Early 2023 musings

Business

Andrew Hollingworth – Ryanair: Low Cost Obsessed. Why did he buy 10% of the whole industry in 2017? The reason he did is because the industry is consolidated, and he could see that the industry was then having and is still enjoying a level of permanent pricing power. Now that pricing power, it isn’t permanent in the sense that it bucks recessions or it bucks pandemics, but it is permanent in the sense if your market shares roughly stays the same and if participants of that market broadly behaves themselves. And I think that’s the conclusion that Buffett reached in 2017.”

Panera Bread tests Amazon’s palm-scanning technology in St. Louis. First Starbucks, now Panera. This technology has a lot of growth potential and I expect it to be adopted by more retailers in the future. However, to foster this growth, Amazon needs to have its brand associated with privacy and security, rather than scandals and data leaks.

How a wildly popular 5-foot-long promotion became a logistics nightmare for Subway

($) Starbucks’s New CEO Brews Coffee at Stores to Prepare for Role. If you invest in a consumer-facing business like Starbucks, you’ll want a CEO that is obsessed with customer satisfaction and listening to customers. The new CEO of Starbucks is doing that and he already found areas to improve.

Arm seeks to raise prices ahead of hotly anticipated IPO. “Arm charges royalties of about 1 to 2 per cent of the value of each chip sold based on its designs, according to Sravan Kundojjala, an analyst at TechInsights. According to the new business model being presented by Arm, royalties would be set according to the average selling price (ASP) of mobile devices rather than that of the chips. Some of Arm’s customers, including Apple, are both chipmakers and device makers, and have special licensing and royalty agreements with Arm. The iPhone maker is not involved in discussions about the change to Arm’s business model, said executives with knowledge of the company’s recent discussions.

Hindenburg Research’s short report on Block/Square. An explosive report from the famed short seller on Square/Block. The report accuses the company of inflated operating metrics and widespread fraud on its platform. If what was said by Hindenburg is true, Block would surely be in serious legal trouble and could see their valuation tank because the company’s health isn’t as good as what it made out it be. There are two things worth noting. One is that Hindenburg has a great track record on their research. So far, I haven’t heard any of the targets of their reports successfully refute the findings. Plus, I don’t think Hindenburg risked lawsuits if they weren’t confident of what they found. The second issue is how Block chose to respond to the allegation. Not silence. Not rebuttal with facts and logics. But with a threat to pursue legal avenue. It really makes you think, doesn’t it?

Other stuff I find interesting

Commuting to work post-pandemic: Opportunities for health? A scientific paper on the health benefits that shorter daily commute brings. WSJ also published an article on the same topic. I’d save at least a couple of hundred dollars a month on rent if I relocate to West of Omaha and work from home 2-3 days a week. But my mental health and daily energy are paramount to me. So I instead choose to pay more for rent to be able to walk to work.

Why Japanese Web Design Is So… Different. I used to be baffled by the look and feel of some Japanese websites I visited. They look so heavy and littered with text and photos. A complete contrast to the minimalist style I often associate with the Japanese culture. This post sheds light on why and it makes sense to me

60 days to find a job or leave the country. A somber read on the H1B visa and the anxiety that H1B holders have to carry every day. The US is blessed to be an attraction to so many talented white-collar workers and entrepreneurs around the world. I don’t get why it has to be that difficult for people to build a life here. Give a green card to master-degree graduates from a US university. Raise the annual cap on green cards. Streamline the process. Just do something to make people’s lives easier. If you are in the position of power to do and don’t do anything, what good is it to have that power?

Wealthy Executives Make Millions Trading Competitors’ Stock With Remarkable Timing. I don’t believe for a second that a CEO-level person doesn’t have non-public information on a competitor. Nonetheless, I get why the number of insider trading charges is smaller than what we want. It’s not easy to prove and there is a fine-thin line to tread between catching insider traders and violating freedom to trade. And if there is a more obvious case, I’ll look towards Congress…

Should I Buy a House Now? An excellent article on whether one should buy a house right now, given the high mortgage rates. What makes me like the article is that it lays out the arguments for both sides and understands that buying a house is a personal decision and this decision is about more than just money. Hence, there is no blanke right or wrong answer. It varies from one person to another.

Stats

Bird raised more than $880 million in venture capital funding. The company is worth less than $40 million as of this writing.

29% of BNPL users first became interested in a BNPL service upon seeing it at checkout

An average US-based AirBnb host earned $14,000 in income from hosting in 2022

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