Business
Airport lounges are booming, and everyone wants in. Airlines and credit card issuers have a real dilemma on hands. On one hand, they want to make access to lounges a luxurious experience worth paying for. To do that, it must not feel crowded and diluted. On the other hand, they want to sign up as many customers as possible. In the meantime, a lounge at an airport cannot expand forever. Something has to give. To make matters more complicated, some card issuers have highly important partnerships with airlines and run their own lounges.
Getir bets big on the U.S. even as it bleeds cash. “By the latest count, Getir is valued at $2.5 billion, down nearly 80% from its peak last spring. Though it secured a $500 million cash infusion in September, media reports say the company bleeds an estimated $100 million per month. Angela Lee, professor at Columbia Business School, points to her own experience as an example: Using a discount on Getir, she paid $5 for $25 worth of groceries, amounting to roughly $10 in revenue for the company after shipping. Without knowing exact numbers, she estimates that Getir likely purchased the groceries wholesale at two-thirds to half the price, like other retailers. A generous estimate of $12.50 for the groceries is already more than they brought in — all without factoring in the expense of full-time workers, equipment, advertising, and ground-floor commercial real estate in some of the most expensive cities in the world. According to a 2023 Coresight survey of American online grocery shoppers, a quarter to a half of all respondents had used five companies — Amazon, Walmart, DoorDash, Instacart, and Uber Eats — in the past year, while just 8% ordered from Getir (though Getir is active in fewer cities)“
How Walmart became America’s largest grocer. The power of Walmart can be summarized into three elements: brand, location and scale. Everybody in the US and many in the world know Walmart. Its stores are accessible to most Americans, even in remote states like Alaska or areas like Page City in Arizona. Walmart’s enormous scale enables the grocer to negotiate favorable terms with suppliers and drive down the costs for consumers; something that very few retailers can cope with.
Smaller Banks Look to Shrink Their Way Back to Health. Banks, especially small or regional ones, should pray that the Fed will lower the interest rates soon and fast. The longer the rates stay elevated, the more difficult it is for these banks to compete and grow. Measures will be taken to ensure short-term results, such as lack of investments, cost-cutting and layoffs of skilled labor. Big banks will continue to leverage their advantages and can widen the gap with strategic investments/partnerships and hiring of skilled workers available on the market.
Manola Capital Management published a new investor letter and shared some good thoughts on PayPal
When do you average down? The key is to find a good solid business. Buying more of a stock just because it gets cheaper, not because the company is foundationally solid AND it gets cheaper, is a disaster .
Other stuff I find interesting
IRS plans to launch free tax filing pilot program in 13 states next year. I don’t get the objective of this staggered roll-out. Each state has a different tax code. What works in the pilot 13 states may not work in the others. Hence, why wouldn’t the IRS roll it out to everybody? The IRS overhaul has been in discussion for years. The agency badly needs to modernize its system in order to make American lives easier. $80-100 billion is a lot of money, but we spend a lot more every year in defense and wars. My perspective is that if we can afford to go to wars and pay for military tanks, we should be able to pay for things that would increase productivity and happiness.
Why Olive Oil Is So Expensive Right Now. “Like the oil that comes from the ground, olive oil is a globally traded commodity, with events in one part of the world reverberating far away. Drought in Spain, the world’s largest olive oil producer, has devastated recent harvests, and bad weather has hit olive crops in other major growers like Italy, Greece and Portugal. The United States imports almost all of the olive oil it consumes, primarily from Spain and Italy. The result is prices climbing to dizzying heights, well over $9,000 per metric ton, which filters through to pricier bottles of the oil that have become a fixture in many American households, used for cooking and drizzling on foods associated with a healthy Mediterranean diet. A 750-millileter bottle of Bertolli’s extra virgin olive oil that cost around $9 at the grocery store last October is around $11 today, a nearly 22 percent increase, according to IRI, a data provider. The European Commission recently said olive oil production in Spain, Italy and other European Union countries would recover only slightly from last season’s 40 percent decline, limiting supplies and pushing up prices.”
H-1B Visa Program Changes Aimed at Stopping Applicants From Gaming Lottery. To stay competitive, the US must retain talent and preserve its appeal to highly skilled immigrants. The proposed changes are not perfect, but a step in the right direction. What we need now is overwhelming public support which will force companies to get behind the changes; which then will put pressure on lawmakers to codify the policies into laws.
The Multimillion-Dollar Machines at the Center of the U.S.-China Rivalry. “As the United States tries to slow China’s progress toward technological advances that could help its military, the complex lithography machines that print intricate circuitry on computer chips have become a key choke point. This week, U.S. officials took steps to curb China’s progress toward that goal by barring companies globally from sending additional types of chip-making machines to China, unless they obtain a special license from the U.S. government. American officials took the position that they could regulate equipment manufactured outside the United States if it contains even just one American-made part. In August, the Chinese telecom giant Huawei unexpectedly released a new smartphone containing a Chinese-made chip with transistor dimensions rated at seven nanometers, just a couple of technology generations behind the latest chips made in Taiwan. Analysts have concluded that China’s Semiconductor Manufacturing International Corporation made the chip with the use of the Dutch deep ultraviolet lithography machinery.“
Corsica’s Trinicellu: Europe’s magnificent €50 train. I love travel by train and I love traveling to less popular places that still offer incredible experience. This seems to check the boxes.
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Minh Quang Duong 
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