Sunday Finds + 3 Thoughts From Last Week
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Welcome to Chit Chat Money’s Sunday Finds + 3 Thoughts From Last Week. In this newsletter you will find three topics I thought about last week, links to shows we’ve recently released, and links to some interesting articles, podcasts, and tweets. Check out the archive here.
I’m on vacation, so all I have are three quick thoughts for today:
Counterintuitively, ESG investors should own the companies they despise. Somebody is going to earn a share of the company’s profits, so why not use them for good?
Unhealthy eating, or, in general, cultural culinary habits, have insanely strong network effects. I think there is an investing lesson here.
A decision to not sell a stock has the same magnitude as a decision to sell it. You make this decision every day with every stock in the world. I believe this framework can be helpful when trying to manage a portfolio, counteracting our bias to things we own.
See you next week,
Brett
***Our fund, Arch Capital, may own securities discussed in this newsletter. Check our holdings page and read our full disclosure to learn more.***
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Catch up on Our Shows From Last Week
3 Good Reads
7 Billion Sets of Spectacles - Investment Talk
To a regular individual, they may also notice a Starbucks as they walk past it. But the brain won’t exert itself in the same way. It’s stimuli that need not be triggered, for it’s not believed to be of importance. Now, is my subconscious attention to Starbucks a good use of brain power? Likely not, all things considered. But it’s how my brain works. My point being, that when we make the conscious decision, as investors, that we are now interested in Company X, our brains, previously adopting the cocktail party effect on Company X, filtering it out, will begin to adopt the frequency illusion. We start to see the lattice.
Where (And What) the Hell Is the Metaverse - Where’s Your Ed At
Except it hasn’t worked before. When there is nothing to do in a game, people tend not to play it. Games that are bad and boring tend not to succeed. Online games that are too weird and time-consuming (see: Star Wars: Galaxies) tend to fall apart or require massive rehauls to stop players from leaving. MMORPGs - and any online space of any kind - require some sort of meaningful, replicable utility that tells you to do this instead of doing something else. Fortnite and Roblox have succeeded because they are both enjoyable spaces to hang out in but accessible and interesting games. I fully disagree that Fortnite is a “space” for “hanging out” - what it actually is is a game that is simple enough to play that you can play around in it and have a conversation, and without said dickery, you’d probably just call or text the people in question.
Farfetch: Integrating the Luxury Value Chain - Global Quality Investing
Over the years, Farfetch has significantly outshined its primary competitors. Yoox-Net-A-Porter 2021 revenue has essentially been flat since Richemont acquired them in 2018. YNAP had a better 2020 but saw its revenue decline back to 2019 levels as supply chain issues and Brexit created complications. The latest results imply better growth since then, but the two-year stack pales in comparison to Farfetch.
1 Good Listen
Michael Mauboussin’s Man Overboard Moment and Sector Rotation - This Week In Intelligent Investing
In this episode, co-hosts Phil Ordway, Elliot Turner, and John Mihaljevic discuss the "man overboard moment" Michael Mauboussin wrote about in a 2015 white paper entitled, "Managing the Man Overboard Moment." We also talk about the concept of "sector rotation."
Smart and Funny Tweets:
