Macroeconomic consequences of the upcoming election and review of Rage as well as Long Way Up

Macroeconomic Consequences of The Upcoming Election

We all know that elections have consequences and the upcoming one is no exception. Whoever between Trump and Biden wins in November will have major ramifications for the US and the world. Moody Analytics released a study on the macroeconomic implications of the election, theorizing out what a win for Biden or Trump would mean for the economy. In short, it can’t be more different.

Essentially, Moody looked at four different scenarios: A Democrat Sweep, A Democrat President + a Split Congress, A Republican Sweep and A Republican President + a Split Congress

Figure 1 – Election scenarios. Source: Moody

While I admit that Moody is being very pragmatic in their possibility of each scenario, the fact that there is 35% chance of a Republican Sweep gives me nightmares after all that the current Administration and Congress have done for the past few years, especially in the fight against Coronavirus. Nonetheless, what would each scenario mean for the economy?

Figure 2 – Macroeconomic forecast of each scenario. Source: Moody

The implications can’t be clearer: a Democratic Sweep, according to Moody, would be the best scenario for employment and the economy, and for lower & middle-income households.

Lower- and middle-income households benefit more from Biden’s policies than Trump’s. Biden ramps up government spending on education, healthcare and other social programs, the benefits of which largely go to those in the bottom half of the income distribution. Meanwhile, he mean- ingfully increases taxes on the well-to-do, financial institutions and businesses to help pay for it. Trump largely does the reverse. He makes permanent the temporary tax cuts he implemented in his first term. The benefits largely go to higher-income house- holds and businesses, while government spending is scaled back on healthcare and a range of social programs, the benefits of which go mainly to those with lesser in- comes and wealth.

Source: Moody

To be clear, no-one would know for certainty what would happen in the next few years. Regardless, it’s undeniable that the economy as well as the federal budget improved under Democratic Presidents in the last 20-30 years such as Clinton and Obama, while contracting and slumping under Republican Leaders like Bush and Trump. In the case of Trump, his presidency is hit by a once-in-a-lifetime pandemic, but when you are at the helm, you have to take the responsibility. The power of the President is massive, yet when you compare the US to other developed countries, it lags far behind in the fight against Coronavirus. Plus, I believe his “America First” rhetoric, coupled with the careless use of tariffs, and a tax cut that significantly lowers tax revenue for the government are more harmful than helpful to the American people.

One can argue that policies take a long time to take effect and the results under Democratic Presidents came from Republican policies. If that were true, then whatever economic gains or glowing numbers that the government likes to boast about would have to come from Obama’s actions.

It comes down to this: if you are inclined to believe in research from organizations with credibility in the financial intelligence & analytics world, have a read of the paper to be more informed before the election. If that’s not your cup of tea, if you believe more in what the administration or Fox News hosts say, then by all means.

It’s just so shocking to me that so many folks can vote against their own interests.

Rage by Bob Woodward

I picked up the book from a recommendation on Twitter. Bob Woodward is a veteran journalist that has covered 9 presidents, reported originally on the Watergate scandal and garnered much respect & credibility in the journalism and politics world. For reasons unknown to even Bob, he managed to secure 17 on-the-record interviews with Trump. This book mainly contains what went on in those interviews. Throughout the book, Bob took audience on the journey throughout the major milestones in Trump’s presidency with his relentless reporting and correspondence with Trump himself. His interviews helped readers understand more about Trump, about how he thought and came to make major decisions such as policies during the pandemic or strategic allies with South Korea, about how erratic Trump is and about how the folks around him really thought about him.

I am not a big fan of Trump, to put it extremely lightly, but I have to give him credit for agreeing to sit down with a journalist on the record for 17 interviews while knowing that the book would not be kind on him. Personally, I don’t know if I could do it. Normally, books like this one are criticized to be extreme biased either against or in favor of the President. I’d say that this book is pretty fair because most of the content of the book actually came out from Trump’s mouth and could be easily verified. If you look for a weekend read, try this one.

“What the hell is going on?” Coats asked in a private sidebar conversation with Mattis after one session. In just one example, Trump wanted to withdraw U.S. troops from Afghanistan and South Korea. There was a rush. Instantly. “Get them out!” Trump had commanded.

“That’s crazy,” Mattis said to Coats. “That’s dangerous.”

Coats was troubled by the absence of a plan or a consideration of the human dimension—the impact on the troops, the allies, the world—or a sense of the weight of the office.

“The president has no moral compass,” Mattis replied. The bluntness should have shocked Coats, but he’d arrived at his own hard truths about the most powerful man in the world. “True,” Coats agreed. “To him, a lie is not a lie. It’s just what he thinks. He doesn’t know the difference between the truth and a lie.”

Excerpt From: Bob Woodward;. “Rage.”

Then Trump digressed to reveal something extraordinary—a secret new weapons system. “I have built a nuclear—a weapons system that nobody’s ever had in this country before. We have stuff that you haven’t even seen or heard about. We have stuff that Putin and Xi have never heard about before. There’s nobody—what we have is incredible.”

Later I found sources who confirmed the U.S. military had a secret new weapons system but no one wanted to provide details and were surprised Trump had disclosed it. Trump had asked for and received massive funding increases for the National Nuclear Security Administration, which maintains the nuclear weapons stockpile, since taking office.

Excerpt From: Bob Woodward;. “Rage.”

By early 2020, Kushner thought Trump had assembled a better and more dedicated White House team than they’d had before.

“In the beginning,” Kushner told others, referring to the first years of the administration, “20 percent of the people we had thought Trump was saving the world, and 80 percent thought they were saving the world from Trump. Now, I think we have the inverse. I think 80 of the people working for him think that he’s saving the world, and 20 percent—maybe less now—think they’re saving the world from Trump.”

Let that analysis sink in: Twenty percent of the president’s staff think they are “saving the world” from the president.”…

“In meetings, Kushner said, Trump was “an expert at cross-examination. He’s an expert at reading people’s tells. He won’t say, let me go with a nuanced position. He’ll, in a meeting, say, well, what if we do 100? They’ll say, oh, you can’t do that. And then, he’ll say, well, what if we do zero? It’s like, holy shit. It’s whiplash. So that’s his way of reading people, is to see how certain are they of their position: Do they hold their ground? Do they buckle? So that’s just his style.

“And by the way,” Kushner added, “that’s why the most dangerous people around the president are overconfident idiots.” It was apparently a reference to Mattis, Tillerson and former White House economic adviser Gary Cohn. All had left. “If you look at the evolution over time, we’ve gotten rid of a lot of the overconfident idiots. And now he’s got a lot more thoughtful people who kind of know their place and know what to do.”

Excerpt From: Bob Woodward;. “Rage.” Apple Books.

Long Way Up Documentary on Apple TV+

This documentary chronicles the road trip by Ewan McGregor and his friend Charlie from the tip of South America to California in the span of three months. What makes this trip special is that they used electric motorcycles entirely and that the trucks that followed to support them when critical were also electric. In “Long Way Up”, audience will see how the two friends and their team prepared for the challenge, including working with a company to build two prototype electric trucks & with Harley Davidson to build completely new untested electric motorcycles, learning Spanish at the last minute and most importantly planning how to charge the bikes all the way. There have been only three episodes released so far, but I am completely hooked. With the effort by Ewan, Charlie and their team to achieve such a monumental task. With the natural beauty of South America and how little I know about it. With the immense possibility of what humans can do.

Weekly readings – 26th September 2020

What I wrote

Some data points and arguments in favor of Apple and its App Store guidelines

My review of the book: The Psychology of Money

Business

How Wegmans Keeps Winning

A bear case on Microsoft Azure

Innovation is rampant in the fintech world and this new idea for a credit card is one of them

An investigative piece on how Mark Zuckerberg responded to criticisms from his own ranks

The SaaS Financial Model You’ll Actually Use

Technology

The secret history of Windows on Surface Duo

Adobe introduced Liquid Mode in even Free Adobe Acrobat Reader! It makes changing a PDF’s content so much easier. Try it out!

What I found interesting

In the last 30 years, under-5 child mortality rate has dropped from 93 per 1000 children in 1990 to about 38 in 2019. A remarkable achievement

About a special Japanese citrus

South Korea managed to contain the pandemic while minimizing the impact on its economy. WSJ had an interesting piece on how it did so

Book Review – The Psychology of Money. Likely the best book I read this year

I waited for this book to come out for a while, and it surely doesn’t disappoint. The Psychology of Money by Morgan Housel is an excellent book on personal finance, our thinking towards money and how that drives a lot of our decisions in life. Not only does the book contain a lot of wisdoms and high quality content, but it is also well and crisply written that you can finish it in a weekend, unlike a lot of other books that are unnecessarily lengthy.

If you care about growing your net worth, investing and making important decisions in your life (who doesn’t?), I really recommend this book. It will transform what you think about money and life. Below are a few nuggets from the book. Have a nice weekend!

The premise of this book is that doing well with money has a little to do with how smart you are and a lot to do with how you behave. And behavior is hard to teach, even to really smart people.

Few people make financial decisions purely with a spreadsheet. They make them at the dinner table, or in a company meeting. Places where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together into a narrative that works for you.

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

“At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have … enough.”

The idea of having “enough” might look like conservatism, leaving opportunity and potential on the table. I don’t think that’s right. “Enough” is realizing that the opposite—an insatiable appetite for more—will push you to the point of regret.

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

Think of it like this, and one of the most powerful ways to increase your savings isn’t to raise your income. It’s to raise your humility.

Be nicer and less flashy. No one is impressed with your possessions as much as you are. You might think you want a fancy car or a nice watch. But what you probably want is respect and admiration. And you’re more likely to gain those things through kindness and humility than horsepower and chrome.

Go out of your way to find humility when things are going right and forgiveness/compassion when they go wrong. Because it’s never as good or as bad as it looks. The world is big and complex. Luck and risk are both real and hard to identify. Do so when judging both yourself and others

Less ego, more wealth. Saving money is the gap between your ego and your income, and wealth is what you don’t see. So wealth is created by suppressing what you could buy today in order to have more stuff or more options in the future. No matter how much you earn, you will never build wealth unless you can put a lid on how much fun you can have with your money right now, today

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

Jim Simons, head of the hedge fund Renaissance Technologies, has compounded money at 66% annually since 1988. No one comes close to this record. As we just saw, Buffett has compounded at roughly 22% annually, a third as much. Simons’ net worth, as I write, is $21 billion. He is—and I know how ridiculous this sounds given the numbers we’re dealing with—75% less rich than Buffett.

Why the difference, if Simons is such a better investor? Because Simons did not find his investment stride until he was 50 years old

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

Savings in the bank that earn 0% interest might actually generate an extraordinary return if they give you the flexibility to take a job with a lower salary but more purpose, or wait for investment opportunities that come when those without flexibility turn desperate.

If you have flexibility you can wait for good opportunities, both in your career and for your investments. You’ll have a better chance of being able to learn a new skill when it’s necessary. You’ll feel less urgency to chase competitors who can do things you can’t, and have more leeway to find your passion and your niche at your own pace. You can find a new routine, a slower pace, and think about life with a different set of assumptions. The ability to do those things when most others can’t is one of the few things that will set you apart in a world where intelligence is no longer a sustainable advantage

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

The idea is that you have to take risk to get ahead, but no risk that can wipe you out is ever worth taking. The odds are in your favor when playing Russian roulette. But the downside is not worth the potential upside. There is no margin of safety that can compensate for the risk.

Room for error does more than just widen the target around what you think might happen. It also helps protect you from things you’d never imagine, which can be the most troublesome events we face.

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

Apple’s investment in the App Store and its value

Many folks criticize Apple for taking commissions on the sale of digital content on iOS devices, saying that the company doesn’t do anything in the sale process to deserve the commission. I disagree. I outlined my thoughts on the criticisms of the App Store. In the latest filing as part of its legal battle against Epic Games, Apple provided some data points on what they spent on the App Store and the impact. Because these excerpts come from a legal document submitted to a court, it’s unlikely that Apple made them up. Have a read and decide for yourself if it’s reasonable to ask a company not to benefit from the servers it renders and investments it makes. Also, would you do the same if you were Tim Cook running the company?

Investment in data centers and staff maintaining the App Store

Apple has spent billions of dollars to develop and maintain the App Store. The data centers alone that Apple has established to facilitate the App Store have cost Apple many billions of dollars, and Apple spends hundreds of millions of dollars per year to employ the engineers who contribute to the App Store’s success.

Services that Apple provides under the License Agreement include handling more than 25 million customer support cases a year with a dedicated team of over 5,000 full-time AppleCare advisors; verification of customer accounts to maintain the integrity of the marketplace, including removal of hundreds of millions of fraudulent customer accounts each year; and implementing other measures to combat fraud and refund abuse.

Apple contracts with third-party payment settlement providers to facilitate Apple’s own ability to accept customer payments. During this process, transactions are verified and payments authorized, but this function is just one part of the process and is outsourced to third parties to whom Apple itself pays a fee. 

Source: Apple’s filing

The App Store removes administrative hurdles for developers such as cross-country taxes

While expanding developers’ ability to monetize their apps, IAP also removes administrative burdens and allows developers to effortlessly sell their services to, and receive payments from, customers in the 175 countries where the App Store operates. This support includes collecting and managing payment information from around one billion potential customers around the globe; handling conversions to 45 currencies; and ensuring compliance with local tax laws, and handling tax withholding in scores of countries. Moreover, the records maintained through IAP help Apple provide both routine and customized business analytics to app developers. For many developers, it would be prohibitively complex and costly to carry out these tasks on a similar scale. Yet Apple’s infrastructure makes it effortless for them. 

Source: Apple’s filing

The App Store shields consumers from potentially harmful apps

Since January 1, 2020, Apple has processed more than four million app submissions, approving approximately two thirds of them and rejecting approximately one third for noncompliance with the Guidelines and/or the agreements. For example, more than 100,000 app submissions are rejected each year for data collection and storage practices that run afoul of Apple’s strict requirements for consumer privacy protection. Most of these developers whose apps are rejected make changes to their apps to address Apple’s concerns, and ultimately have their apps published to the App Store.

Source: Apple’s filing

Since 2017, Apple has terminated:

more than 75,000 accounts of developers for introducing new features to their apps without going through App Review, i.e., bait-and-switch conduct, in which a developer makes changes post-review to circumvent the app review process, also referred to as Illicit Concept Changes (ICC);

more than 2,000 developer accounts for introduction of a non-IAP payment method for in-app sales of digital content; 

more than 60,000 developer accounts for inclusion of hidden features or obfuscated code or for facilitating the download or installation of executable code; and

more than 175,000 developer accounts for other fraudulent conduct.

Source: Apple’s filing

Disclaimer: I own Apple stocks in my portfolio

Weekly readings – 19th September 2020

What I wrote

I reviewed a few books such as: The Anatomy of The Swipe, Tape Sucks, The Motley Fool Investment Guide, 7 Powers: The Foundation of Business Strategy

I put down some thoughts on Apple Fitness+ and Apple One

Business

A deep dive analysis into Snowflake

A study on the effect of Wikipedia on businesses

Our estimates show that adding about 2,000 characters (approximately two paragraphs) of text and one photo to a city’s Wikipedia page increased the number of nights spent in this city by about 9% during the tourist season compared to cities in the control group.6 The effect comes mostly from pages that were initially relatively incomplete. In particular, the treatment increases hotel stays by about 33% in cities which initially had very short pages in a particular language, while there was no effect on city-language combinations where the pages were well developed.

Technology

A review of Microsoft Duo by WSJ. It’s quite concerning that a $1,400 phone has a subpar camera and a buggy software

What I found interesting

A brief profile by BBC of Freiburg, a green and futuristic city in Germany

An interactive map of the Earth some 240 million years ago

A damning memo of a Facebook employee on how the leadership turned a blind eye on election manipulations. She wrote “I have blood on my hands”

The US is almost at the bottom among advanced countries when it comes to well-being of children

The Three Year Rule: How To Stay Motivated Working On A Long-Term Project

A WSJ profile on Trevor Noah and his journey from South Africa to America

According to Census, Asians had the highest median income in the US in 2019 and foreign born folks grew median income at a faster rate than native-borns

Brief thoughts on Apple One & Apple Fitness+

Yesterday, Apple held an event to announce updates on their hardware, software and services. Everything related to Apple should be widely covered. You can read about the event on the news. I just want to share my thoughts on the two notable services: Apple One and Apple Fitness+

Apple Fitness+

It’s a fitness subscription that resides inside the Fitness app and is built for Apple Watch. Essentially, if you’re wearing an Apple Watch and have a screen that can show various workouts developed by Apple, you can see health and exercise data while sweating and hustling through the physical torture :D. According to Apple, there are workouts for everyone, including Cycling, Treadmill, Rowing, HIIT, Strength, Yoga, Dance, Core, and Mindful Cooldown. Each workout is accompanied by curated music, but you can also add your own tunes from Apple Music. Apple claimed that machine learning on device would use your previous workouts as well as health data to personalize suggestions for you. All the data would not leave your devices.

Apple Fitness+ home screen on iPhone 11 Pro.
Figure 1 – Apple Fitness+. Source: Apple
Figure 2 – Apple Fitness+. Source: Apple

Apple Fitness+ will be available at the end of the year in the US, Australia, Ireland, the U, Canada and New Zealand. A subscription will cost $9.99/month or $79.99/year with one month trial and can be shared with up to five people. To gain access to Apple Fitness+, customers need Apple Watch Series 3 or later.

Now, I have seen a lot of comparison with Peloton since the service was announced. Let’s take a look at whom each should be for

Whom it is for
Apple Fitness+ 1/ Those who own an Apple Watch Series 3 or later
2/ Those who don’t want to spend at least $1,400 for a piece of equipment and a subscription on top of that just for workout
3/ Those who don’t have a lot of interior space for a bike or a tread
4/ Those who travel quite a lot and can’t carry equipment
5/ Those who prefer working out without equipment
6/ Those who want to incorporate health data always on Apple devices with workouts
Peloton1/ Those who don’t own an Apple Watch Series 3 or later (Obviously!)
2/ Those who are serious enough about fitness to make a sizable investment in a Peloton bike/tread
3/ Families whose multiple members want to share the same account and bike/tread
4/ Those who have enough space for a bike/tread
5/ Those who stay home often enough

For those who already owned a Peloton machine and subscription, I don’t imagine they will sign up for Apple Fitness+. The sunk cost of a Peloton bike/tread is so high that consumers will try to milk as much out of it as possible. Hence, Peloton shouldn’t have to worry about that. While Apple has many fans, it also has as many, if not more, critics. As Apple Fitness requires an Apple Watch, Peloton shouldn’t worry much about this segment of the market, either. It’s inconceivable to think a non-Apple person would invest in a Watch and iPhone (who has the former without the latter?) just for this fitness subscription.

What should worry Peloton is potential customers who own Apple devices and don’t have a Peloton subscription. To those who are interested in fitness enough to spend $10/month, but not as much to spend $1,400+ for a bike, Apple Fitness+ should be much more appealing as the barriers to entry are much lower. Sure enough, a $350 Apple Watch is still a significant investment, but if historical product rollouts by Apple are nothing but an indication, they will add more health-related functions to their Watches to make them more attractive. Case in point. The new Apple Watch will be able to monitor oxygen level in blood. Hence, compared to a big and expensive bike from Peloton, a combination of a Watch and Fitness+ should be an enticing alternative.

With that being said, I do think the market is big enough for these two players. The hardware requirement limits Apple in the same way as it does Peloton. But if a non-Apple phone or smart watch manufacturer jumps into the fitness market and offers the same service, it can spell trouble for Peloton because in that case, the manufacturer wouldn’t be limited by the hardware requirement any more.

Apple One

This is one of the badly kept secrets. On Tuesday, Apple announced its long anticipated umbrella subscription bundle called Apple One. Basically, an Apple One subscription offers consumers access to multiple Apple services such as iCloud, Apple Arcade, Apple Music, Apple TV+, Apple Fitness+ and Apple News+. Below are the tiers and prices

Figure 3: Apple One Tiers. Source: Apple

A bundle is to encourage consumers to use more individual services, usually at a discount. Apple One is no exception. If you buy services individually and add them all up together, Apple One offers a great value for money. Morgan Stanley had a great summary below

Image
Figure 4 – How much money is saved with Apple One. Source: Ben Bajarin

Premier offers an astounding 45% discount and if your family is already using most, if not all, of the included services, Premier tier is a no-brainer. Additionally, it’s worth pointing out that customers with Apple Card will get 3% cash back from Apple One, on top of the already incredible discount.

What gets me excited about a bundle like this is what lays ahead. If you think about it, I believe that Apple must have had this vision for a while. First they rolled out iCloud. Then Apple Music. Then Apple News+, Apple Arcade, Apple TV+ and Apple Fitness+. There is no way that Apple will stop here. I am confident that they already have something in the pipeline already. It won’t surprise me if they add more and more services to their flagship bundle and make it the Amazon Prime of Apple Services. A few options I can think of:

  • Apple Care?
  • A service related to books as they already have iBooks
  • Something related to cars as iPhone can replace car keys for the new BMW already

Apple is known for incremental yet effective progress over time, proven by its approach to hardware and software. So don’t be surprised that it is taking the same path here with Apple One

Disclaimer: I own Apple stocks in my portfolio.

Look for books to read? Check out those I have read lately

The Anatomy of The Swipe: Making Money Move

We are so accustomed to having quick card-based transactions that if a transaction takes more than a couple of seconds, it will be a terrible customer experience. What many folks don’t know is that there are a lot of things that happen behind every transaction. It involves several parties, including but not limited to a cardholder, an issuing bank, an issuer processor, a network, a merchant processor, a merchant bank and a merchant. During the brief couple of seconds when a cardholder waits at a cashier, information goes from a card reader all the way back to at least an issuer processor through a card network (Visa, Mastercard) and a merchant processor, and back to the card reader. But it’s not finished yet. The process continues at least a couple of days after the transaction when the involved parties go through the clearing and settlement steps.

The payment world is so complex that there are startups that decouple individual steps of the whole process and carve out a niche market for themselves by specializing in such steps and improved efficiency. Take neobanks for example. They offer checking accounts with virtually no fees because they aren’t regulated and can operate without fixed costs such as branches.

I tried in the past to learn about payment systems, but not until this book did I find a reliable source that can break down abstract concepts in a digestible manner. If you are interested in payments or fintech, do yourself a favor and read this book

The reason why you can take money out of just about any ATM is because of the Durbin Amendment and its requirement that every debit card must have a secondary unaffiliated network. This law was put in to give consumers more choice in finding an ATM network. For example, if you have a debit card from Visa and the ATM doesn’t support Visa’s ATM networks, then it can run on Mastercard’s ATM network, Cirrus.

The term “Clearing” is used primarily by Issuers, but can also be referred to as “Capture” by Merchant Acquirers. Clearing happens toward the end of the day for most Merchants and will factor in tips, transaction reversals, and returns. This is basically the Merchant confirming these transactions are valid and that these funds are ready to be moved or “settled.”

Settlement is the actual movement of money from the cardholder’s bank account, the Issuing Bank, to the Merchant’s bank account, the Acquiring Bank. This movement of money typically happens via Fedwire as instructed by the payment networks.

Key term: 3D Secure

This is a standard for offering cardholders one more layer of security for online transactions. When card numbers are entered into a website to pay for something, 3D Secure will require the cardholder to enter one more form of authentication, such as a one-time-use PIN or passcode, similar to how two-factor authentication works for websites. More recently, the card networks are requiring Merchants and card Issuers to roll out a service called 3D Secure. The technology is standard in Europe but not yet in the US.

More recently, the card networks are requiring Merchants and card Issuers to roll out a service called 3D Secure. The technology is standard in Europe but not yet in the US.

The main reason is that these new “neo-banks” aren’t actually banks but rather tech companies that partner with regional banks such as Sutton Bank, Bancorp, or Meta Bank. These regional banks have less than $10 billion in assets and are able to charge a higher Interchange rate because they are considered exempt from the Interchange rules set forth in the Durbin Amendment and are considered “unregulated.”

TAPE SUCKS: Inside Data Domain, A Silicon Valley Growth Story

This book was written by Frank Slootman, former CEO of Data Domain. Frank took the company public and was the CEO when it was sold to EMC. He then went on to take the rein at ServiceNow and is currently assuming the top job at Snowflake. This book is his account of his time as CEO at Data Domain. It is a pretty short book, but it includes an honest and crisp account of how he scaled the company and dealt with startup issues. I like this book because it isn’t lengthy. I think it’s because of his direct nature as a Dutchman. Frank wrote about the lessons he learned along the way with little “fat” or lengthy unrelated anecdotes. He was straight to the point. His lessons outlined in the book should be helpful to aspirational entrepreneurs and CEOs.

Snowflake is expected to go public next week. If you are interested in that company and its CEO, you should give it a read.

My morning routine

The author interviewed a plethora of celebrities and successful folks to learn about their productivity hacks in the morning. Humans are creatures of habits. We all have our habits and routines and these successful men and women aren’t any exception. I don’t think what this book offers is unique in a sense that you can find these hacks on Google at any time. What it does is perhaps to catalogue all these hacks in one place so that you can choose to look at the routines of the folks you like. Plus, if you already studied about productivity tips before, it’s very likely you’d know what to do in general. What is missing is just our determination and discipline.

With that being said, if you are new to the productivity improvement game, this book may be of value. However, it’s pretty pricey compared to the two books I listed above, given the value and satisfaction in return. I’d try to Google the topic before I book this book

7 Powers: The Foundations of Business Strategy

This is a classic book about business strategy. It covers 7 aspects of a successful strategy framework developed by Hamilton Helmer. The aspects include Economies of Scale, Network Effect, Counter Positioning, Switching Costs, Branding, Cornered Resource and Process Power. I think it’s a valuable read to anyone who is interested in analyzing businesses and companies. Of course, the book would be more valuable to newcomers than those who already studied strategy before. For instance, if you are familiar with the concept of Network Effect, Porter’s Five Forces and Switching Costs, this book will serve more as a reminder than a revelation. Nonetheless, it costs only $9 for a Kindle version from which you can take great notes on business strategy.

The Motley Fool Investment Guide

Even though this book costs $15 for a Kindle version, I actually think if you are new to investing and you want to grow your net worth, you should start reading this book. This book covers very important topics of investing. It talks about why you should invest in or avoid mutual funds. It also discusses the appeal of blue chips and small-cap stocks. If you haven’t learned much about the main financial statements (income statement, cash flow or balance sheet), the book provides an overview of these statements and what they mean in general. In my personal experience, although news outlets have coverage of companies’ financials, as an investor, you should do your own homework and practice reading reports as well as financial statements. Additionally, this book touches upon options such as shorting and longing a stock. They aren’t my preferences, but it doesn’t hurt to know what they are and what they do. Of course, the book has to talk about the power of compound interest, which is why we need to invest early and be patient.

I really recommend this book if you want to venture into investment.

Weekly readings – 12th Sep 2020

What I wrote

Three documentaries that I think will intrigue and interest you intellectually

Business

FT’s interview with Reed Hastings that gave some insights into Netflix’s culture

Contactless penetration in the US is around 5-6% while that in non-US markets is around 66%, according to Visa

Bessemer Venture Partners shared their internal memos on several investments, including those in Wix, Shopify or LinkedIn

Although interested viewers need to become a Disney+ subscriber and have to pay $30 for premier access to watch Mulan, the movie reportedly garnered $33 million in its opening weekend

An extensive investigation in Nikola and its CEO

WSJ’ profile of Alphabet CEO – Sundar Pichai

The Athletic says it hits 1 million subscribers after surviving sports shutdown

For a company whose most users are female, Pinterest has a working culture designed to instead favor men

A brief profile of Andy Sassy, the CEO of AWS

Though it has made significant strides in automated driving, owners should not rely on Tesla’s driver assistance features to necessarily add safety or to make driving easier, based on Consumer Reports’ extensive testing and experience. 

Most features within Tesla’s Full Self-Driving Capability suite worked inconsistently, including the Autopark self-parking system that has been around for several years.

Source: Consumer Report on Tesla

Technology

TikTok revealed some details regarding their highly regarded algorithms

A brief overview of the new changes to the App Store guidelines

What I found interesting

The True Story of Lee Kuan Yew’s Singapore

An excellent study on the impact of Covid-19 policies on the economic recovery

US households spent only 40% of the first and only stimulus check so far. Some used up the check while others didn’t use it at all

Interesting documentaries to widen your horizon

I have watched a few interesting documentaries during this long weekend and I want to share with you what I think of them.

Gobekli Tepe

This documentary is called “The Cradle of the Gods” on Disney Plus. It’s about an ancient site in Turkey called Gobekli Tepe. The discovery of Gobekli Tepe, according to the documentary, turned what we thought we understood about human history and civilizations on its head. Before this discovery, we thought agriculture was the catalyst for religion and arts. Once people settled down and had more food produced and stored, they could finally have time and security to think about and develop religion.

Not in the case of Gobekli Tepe. The site consists of many structures on top of a steep hill that are made of stones weighing dozens or hundreds of tons. What makes Gobekli Tepe interesting is that scientists estimate the structures were made around the end of the last Ice Age, when humans were still hunters and gatherers, and there was no language, metal tools or even wheels to help move supremely heavy stones up the hill. Yet, the structures were still miraculously built. Scientists’ theory for why people, thousands of years ago, went through all that trouble to build the structure is that they want to have a place to celebrate their belief: humans are superior to savage animals. Such a belief banded hunters and gatherers together to achieve a monumental feat. Later, they settled on the lands at the bottom of the hill and started their journey towards agriculture and an early stage of civilization.

The theory proposed by scientists who discovered Gobekli Tepe meant that religion came before agriculture, not the other way around, at least in this case. I think it’s a fascinating documentary. Fortunately, it seems you can watch it on YouTube in full here:

The Lost City of Machu Picchu

Another documentary on Disney Plus is called “The Lost City of Machu Picchu”, featuring arguably the most intact archaeological site of the Inca. The Inca rule in South America in the 1400s and 1500s lasted only 100 years and was full of mysteries before it was brutally ended by the Spanish conquerors. The Spaniards destroyed every Inca city that they invaded, yet somehow Machu Picchu wasn’t discovered and fortunately survived. More than 100 years ago, an explorer named Hiram Bingham came across Machu Picchu and wrote a piece published on National Geographic about what he thought was the purpose of Machu Picchu.

What the scientists in this documentary found out; however, largely debunked Bingham’s theory. Moreover, they went in details on what builders did several hundred years ago to construct this monumental site. Machu Picchu was built on a treacherous ground. First of all, it’s on top of a mountain ridge; which poses a tremendous challenge in bringing heavy stones up from quarry sites nearby. Secondly and more importantly, Machu Picchu site has a lot of rain during the year. Without a sophisticated drainage system, the soil would have been eroded and the stones would have been washed away. By digging into the ground at Machu Picchu, the scientists learned about a magnificent construction feat by the Inca builders that not only effectively carries rain water away from the site and keep the soil from being eroded, but also directs drinkable water throughout the small city for allegedly a thousand inhabitants.

It blows my mind to watch the documentary and see how the Inca people made such an engineering and architecture achievement without sophisticated tools that we have nowadays. If you are interested in the Inca and Macu Picchu, you should check it out

Renovation
Source: The Habitatilist

All or Nothing on Tottenham

If you are a football/soccer fan, you’ll likely enjoy this one. The documentary chronicled the last season at Tottenham Hotspur, one of the biggest clubs in London and England in general. The Amazon Prime crew was given exclusive access to the players, the coaches, the manager, the Head of Recruitment, the staff, the Chairman and so on. They even secured permission to be present in some of the most sensitive conversations at a football club. For instance, viewers could see the conversation between Chairman Daniel Levy and Manager Jose Mourinho on Christian Eriksen, who had had only a few months on his contract and been on his way out of the club. Audience could also listen to a candid exchange between the manager and Dany Rose, who had been at the club for 12 years and demanded to play or he would prefer to leave; which he did.

There are a few things that fascinate me. First, the filming crew had to be very aware of the situations they were in. Imagine that as a manager, you were about to have a tough conversation with your players during half time and your team was down. I can imagine having someone else film the whole thing could be very irritating. Hence, the ability to blend in situations without being a disruption or annoyance is pretty admirable.

Second, as I mentioned above, the crew recorded some highly confidential and sensitive conversations at the club. There must have been a great deal of trust and professionalism between the club and the production crew. Otherwise, the whole thing would have been a catastrophe. Imagine what would have happened if the names of starting players for an important match had been leaked or transfer issues had been improperly disclosed to the press.

Third, the documentary, which has new episodes every week, pulls the curtain on what goes on behind the scenes at a football club: how they are treated physically, the training, the process before a match, the team hurdle, the psychological change, the struggle with injuries and so on. For me as a football fan, I am highly fascinated what I have seen so far. It’s available on Amazon Prime, you really should check it out.

Weekly readings – 4th September 2020

What I wrote

I detailed my thoughts on the common criticisms of the App Store

I found a new business content website called InPractise and it is great!

My thoughts on Walmart’s new membership program called Walmart Plus

Business

Analyzing the Bentley Systems IPO Prospectus

A breakdown on Palantir’s S-1

Vietnam recorded 30 million daily online transactions in April 2020

Apple looks to expand its advertising business. I am not sure I am a fan of this move.

CB Insights deep dive into Stripe

Source: Credit Suisse
Image
Source: 2020 Debit Issuer Report

Technology

A developer’s account of trying to set up App Clip for his app

MongoDB History

Inside Amazon’s New Fresh Grocery Banner

Stuff I found interesting

Larry Ellison, one of the world’s richest people, asks for a second chance at charity

The Hustle’s piece on designers who help restaurants improve sales through menus

Electric bike owners progressively use cars less, finds study

Social media preferences in Vietnam. Source: Decision Labs