Sunday Finds + 3 Thoughts From Last Week
Sunday Finds + 3 Thoughts From Last Week
Convenience stores and airlines this week
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.
Chit Chat Money Podcasts From Last Week
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1. More vertical integration from Amazon
There’s news on Amazon seemingly every day. This recent product update may be the most important one in a long time:
Amazon has helped optimize and simplify the fulfillment and delivery needs of our selling partners for the better part of 20 years. Now, we are taking even more of the burden off sellers with the introduction of Supply Chain by Amazon, an end-to-end, fully automated set of supply chain services that will provide sellers with a complete solution to quickly and reliably move products from manufacturing locations to customers around the world.
There are a lot of good nuggets from this press release, including:
Fulfillment By Amazon (FBA) is on average 70% cheaper than the competition
Amazon Global Logistics pricing is 25% cheaper than the competition
Amazon Warehouse Distribution is now eliminating 4th quarter peak pricing (putting pressure on UPS and FedEx)
Amazon will now fulfill inventory replenishment across all retail channels (not just on Amazon properties)
Sellers can now outsource inventory replenishment services using Amazon’s machine-learning tools (I don’t exactly know what this means)
Amazon’s various delivery/logistics products can be confusing. The big takeaway should be that Amazon is much cheaper than the competition and looking to get increasingly cheaper.
If you are a seller of products in North America, it is getting harder and harder to argue that you should not use Amazon’s services. Amazon should benefit financially through increased selection on Amazon.com, which enables it to make more money through 3rd-party selling fees, ads, increasing prices for Prime, etc.
2. The danger of too much research
On one end of the spectrum, you have “investors” who just buy stocks after doing zero research. I bet all of you have at least one person in your life like this. It is shocking how frugal some people can be with their spending but just throw money into the stock market like there is no tomorrow.
But for the ones who truly love fundamental research (myself included, and likely followers of our show), I think it can be dangerous to do too much research.
Of course, you want to understand a business and its industry before buying it. But if you look at any company long enough you can convince yourself to buy shares.
Questions that I want to ask myself when doing a lot of research on a company:
If I can’t figure out why I would want to own this after a couple of hours of research, why is that?
If it takes me a long time to understand what a business does, do I actually understand it? Or is it likely out of my circle of competence?
I prefer to buy stocks where I can quickly understand the bull case.
3. Ed Thorp should be your role model
The best podcast I listened to this week was a Founders Podcast on Ed Thop (link in the below section).
He really has life figured out. After inventing counting cards and building the first quantitative hedge fund, he decided that he had enough wealth and put life on easy mode.
Since then, it seems like he has worked on things that interest him for a few hours a day before spending time with his family/friends and exercising.
Oh, and he also gave money to Buffett (buying Berkshire) and Ken Griffin (Citadel) after retiring from professional investing. Not bad choices. Is he secretly one of the richest people in the world?
His autobiography called A Man for All Markets is great. Highly recommend it for more details on his life story.
The man is 90 years old and looks like this (from recent Tim Ferris show):
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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3 Intriguing Reads
China’s Coming Lawfare Offensive - Financial Times
The Foreign Relations Law is equally sweeping, and makes clear that it targets foreigners as much as Chinese nationals. “Foreigners and foreign organisations in mainland China shall comply with Chinese law and must not endanger China’s national security, harm the societal public interest, or undermine societal public order.”
Sundar Pichai on Google’s 25th Birthday - Wired Magazine
EARLIER THIS MONTH, Sundar Pichai was struggling to write a letter to Alphabet’s 180,000 employees. The 51-year-old CEO wanted to laud Google on its 25th birthday, which could have been easy enough. Alphabet’s stock market value was around $1.7 trillion. Its vast cloud-computing operation had turned its first profit. Its self-driving cars were ferrying people around San Francisco. And then there was the usual stuff—Google Search still dominated the field, as it had for every minute of this century. The company sucks up almost 40 percent of all global digital advertising revenue.
Salesforce Connected Shoppers Report - Salesforce
More than ever, shoppers expect retailers to meet them where they regularly engage, including social media, messaging apps, and live streaming services. This is known as “shopping at the edge,” where shoppers start — and increasingly complete — a buying journey outside of a retailer’s physical and digital space.
1 Good Podcast
Smart, Funny, and Insightful Tweets:
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