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We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 06 December 2020:

1. ‘It will change everything’: DeepMind’s AI makes gigantic leap in solving protein structures – Ewen Callaway

An artificial intelligence (AI) network developed by Google AI offshoot DeepMind has made a gargantuan leap in solving one of biology’s grandest challenges — determining a protein’s 3D shape from its amino-acid sequence.

DeepMind’s program, called AlphaFold, outperformed around 100 other teams in a biennial protein-structure prediction challenge called CASP, short for Critical Assessment of Structure Prediction. The results were announced on 30 November, at the start of the conference — held virtually this year — that takes stock of the exercise.

“This is a big deal,” says John Moult, a computational biologist at the University of Maryland in College Park, who co-founded CASP in 1994 to improve computational methods for accurately predicting protein structures. “In some sense the problem is solved.”

The ability to accurately predict protein structures from their amino-acid sequence would be a huge boon to life sciences and medicine. It would vastly accelerate efforts to understand the building blocks of cells and enable quicker and more advanced drug discovery.

2. Tony Hsieh’s American Tragedy: The Self-Destructive Last Months Of The Zappos Visionary – Angel Au-Yeung and David Jeans

Taken together, the memories of Hsieh paint an image of a man whose mission in life was to create happiness. This took shape in many ways. In pioneering, at Zappos, the concept of an online store fueled by a customer-first, no-questions-asked return policy, Hsieh arguably had a bigger effect on online retail than anyone short of Bezos himself. In investing $350 million into downtown Las Vegas, he lovingly turned a seedy part of town into an arts, cultural and tech hub, with a community of Airstream trailers, one of which Hsieh lived in for years. As a business evangelist, the 2010 title of his New York Times number one bestseller said it all: Delivering Happiness: A Path To Profits, Passion and Purpose.

But while he directly (by the tens of thousands) and indirectly (by the millions) delivered on making other people smile, Hsieh was privately coping with issues of mental health and addiction. Forbes has interviewed more than 20 of his close friends and colleagues over the past few days, each trying to come to grips with how this brightest of lights had met such a dark and sudden end.

Reconciling their accounts, one word rises up: tragedy. According to his friends and family, Hsieh’s personal struggles took a dramatic turn south over the past year, especially as the Covid-19 pandemic curtailed the nonstop action that Hsieh seemingly craved. According to numerous sources with direct knowledge, Hsieh, always a heavy drinker, veered into frequent drug use, notably nitrous oxide. Friends also cited mental health battles, as Hsieh often struggled with sleep and feelings of loneliness—traits that drove his fervor for purpose and passion in life. By August, it was announced that he had “retired” from the company he built, and which Amazon had let him run largely autonomously since paying $1.2 billion for Zappos in 2009. Friends and family members, understanding the emerging crisis, attempted interventions over the past few months to try to get him sober.

Instead, these old friends say, Hsieh retreated to Park City, where he surrounded himself with yes-men, paying dearly for the privilege. With a net worth that Forbes recently estimated, conservatively, at $700 million, Hsieh’s offer was simple: He would double the amount of their highest-ever salary. All they had to do was move to Park City with him and “be happy,” according to two sources with personal knowledge of Hsieh’s months in Utah. “In the end, the king had no clothes, and the sycophants wouldn’t say a fucking word,” said a close friend who tried to stage one of the interventions, with the help of Hsieh’s family. “People took that deal from somebody who was obviously sick,” encouraging his drug use, either tacitly or actively.

3. How Venture Capitalists Are Deforming Capitalism – Charles Duhigg

Neuner began hearing similar stories from other co-working entrepreneurs: WeWork came to town, opened near an existing co-working office, and undercut the competitor on price. Sometimes WeWork promised tenants a moving bonus if they terminated an existing lease; in other instances, the company obtained client directories from competitors’ Web sites and offered everyone on the lists three months of free rent. Jerome Chang, the owner of Blankspaces, in Los Angeles, told me, “My average rate was five hundred and fifty dollars per desk per month, and I was just scraping by. Then WeWork arrived, and I had to drop it to four hundred and fifty, and then three hundred and fifty. It eviscerated my business.” Rebecca Brian Pan, who founded a co-working company named Covo, said, “No one could make money at these prices. But they kept lowering them so that they were cheaper than everyone else. It was like they had a bottomless bank account that made it impossible for anyone else to survive.”

Neuner began slashing NextSpace’s prices and adding amenities—free beer; lunchtime classes on accounting, coding, and chakra cleansing—but none of it mattered. WeWork’s prices were too low. By the end of 2014, WeWork had raised more than half a billion dollars from venture capitalists. Although it was now losing six million dollars a month, it was growing faster than ever before, with plans for sixty locations in more than a dozen cities.

Meanwhile, one of Silicon Valley’s most prominent investors, Bruce Dunlevie, of the venture-capital firm Benchmark, had joined WeWork’s board of directors. Benchmark, founded in 1995 in Menlo Park, had funded such Silicon Valley startups as eBay, Twitter, and Instagram. Dunlevie admitted to a partner that he wasn’t certain how WeWork would ever become profitable, but he was taken with Neumann. Dunlevie said to the partner, “Let’s give him some money, and he’ll figure it out.” Around this time, Benchmark made its first investment in WeWork—seventeen million dollars….

…In six years, Neuner opened nine NextSpace locations, as far east as Chicago. “But I was so burnt out by everyone saying I was a failure just because I didn’t want to dominate the globe,” he said. In 2014, Neuner resigned, and NextSpace began closing its sites. “It was heartbreaking,” he said. “V.C.s seem like these quiet, boring guys who are good at math, encourage you to dream big, and have private planes. You know who else is quiet, good at math, and has private planes? Drug cartels.”

As NextSpace’s offices shut down or were sold off, WeWork opened forty new locations and announced that it had raised hundreds of millions of dollars more. It became one of the biggest property lessors in New York, London, and Washington, D.C. One fall day in 2017, as Neuner was browsing in a bookstore near NextSpace’s original location, in Santa Cruz, he passed a magazine rack and saw that Forbes had put Adam Neumann on its cover. The accompanying article described how Neumann had met with Masayoshi Son, one of Japan’s wealthiest men and the head of the enormous investment firm SoftBank. Son had been so impressed by a twelve-minute tour of WeWork’s headquarters that he had scribbled out a spur-of-the-moment contract to invest $4.4 billion in the company. That backing, Neumann had explained to the Forbes reporter, was based not on financial estimates but, rather, “on our energy and spirituality.”

4. The 3 Most Important Words in Finance – Ben Carlson

When I first started out in the investment business I was always overly impressed with the smartest people in the room who seemed to have it all figured out about what was going to happen with certain stocks or the markets in general.

It took a while but I eventually discovered it was those investors who had enough self-awareness to admit they didn’t know what was going to happen next and they didn’t have all of the answers who were truly intelligent.

The 3 most important words in finance are “I don’t know” because the markets will humiliate you without the requisite self-awareness to recognize your own deficiencies.

It’s actually quite freeing for yourself and your clients when you’re willing to admit you don’t know what’s going to happen next.

Useful financial advice does not have to be predicated on your ability to predict the future. In fact, pitching yourself as someone who can predict the future is the fastest way to create a mismatch between expectations and reality. Eventually you will be disappointed or caught off guard when you’re wrong.

5. Who is the world’s best banker? – The Economist

Measured by the hardest test of all— creating something from nothing and delivering long-term shareholder returns while supporting the economy—the answer is someone of whom few outside Asia and the investment elite would have heard: Aditya Puri, who on October 26th retired from HDFC Bank. Now the world’s tenth-most-valuable bank, it is worth about $90bn, more than Citigroup or HSBC.

HDFC is Indian, headquartered in Mumbai, and has been run by Mr Puri since its creation in 1994. Today it has branches in mega-cities and rural backwaters alike. It serves consumers and firms and eschews the wilder reaches of investment banking and foreign adventures. This unlikely formula has produced spectacular results.

In order to assess Mr Puri’s performance The Economist has compared total shareholder returns during his tenure with those achieved by the chief executives of the world’s top 50 banks, by market value (see chart). Mr Puri has delivered cumulative returns exceeding 16,000% over the quarter-century since his bank went public. That is far more than any other boss in our sample, including Jamie Dimon of JPMorgan Chase, widely viewed as the leading banker of his generation. This is not wholly a function of the length of Mr Puri’s tenure: annualised total returns have been 22%, placing him among the top two. The power of compounding means the absolute value created for shareholders during his tenure is a giant $83bn….

…So what is HDFC’s secret sauce? Being in India is no guarantee of success—the industry still features decrepit state lenders and wild-west chancers and is in the midst of a slump that has only been aggravated by covid-19. Instead three factors stand out. First, Mr Puri’s management style, which features a clear vision, microscopic attention to detail, blunt speaking and a knack for retaining talent. Such was his dedication that, presented with a staggering bill for heart surgery, he sought to encourage the doctor to bank more with HDFC….

…Mr Puri leaves behind some question marks. The man many saw as his most likely successor quit in 2018; the bank’s new CEO is Sashidhar Jagdishan, another veteran. Some investors wonder if the bank will eventually merge with its largest shareholder, Mr Parekh’s Housing Development Finance Corporation. The biggest question of all is how Mr Puri got away with working the sort of hours that get you laughed off Wall Street. He tended to take a lunch break, often at home with his wife, and would leave the office at 5.30pm. Perhaps this was the secret of his success.

6. When Hedge Funds Hide – Michelle Celarier

The only default that threatens to rival the politics of the Argentine drama is the ongoing fracas over $74 billion in defaulted Puerto Rico debt that began to take shape in 2015, when then-governor Alejandro García Padilla boldly proclaimed, “The debt is not payable.”

Hedge funds, it turned out, had gobbled up Puerto Rico debt assuming it was a sure thing. Their reasoning was that, unlike other issuers of municipal debt, under U.S. law Puerto Rico couldn’t file for bankruptcy. DCI Group, the same lobbying group that had worked for Singer and other Argentina bondholders, fought hard to keep it that way.

But Puerto Rico is not like Argentina in one critical way: Its residents are also U.S. citizens.

In 2016 the U.S. Congress finally enabled the island commonwealth to declare bankruptcy. Puerto Rico did just that. Now payments of debt and principal have ceased as lawsuits with several groups of competing bondholders are winding their way through the courts even as the island struggles to recover from the devastation of Hurricane Maria.

In both of these highly charged cases, powerful hedge funds — Singer’s Elliott in Argentina and Seth Klarman’s Baupost Group in Puerto Rico — tried to hide their ownership of the beleaguered debt and their attempt to wrest payment from desperate creditors. The stories behind their efforts at secrecy shed more light on why such opacity is prized by the hedge funds, equally abhorred by their opponents, and often ultimately unsuccessful in shielding funds from public censure.

In fact, sometimes the attempt to hide only makes things worse.

7. How to Find Winning Stocks in an Uncertain Recovery – Chin Hui Leong 

Most companies have taken it on the chin as lockdowns disrupted their businesses.

For instance, Mexican food chain Chipotle Mexican Grill was forced to temporarily shutter 100 of its stores, causing it to lose almost a quarter of its restaurant sales in April.

But as in-store sales declined, its digital orders started to take over.

As shutdowns peaked in the second quarter, Chipotle was able to arrest the decline in sales by increasing the proportion of its digital sales to over 60% of total revenue, more than twice the channel’s contribution compared to its first quarter.

Interestingly, as lockdowns were eased, Chipotle’s digital sales were sustained at almost 50% of revenue for the third quarter. As a result, the company was able to deliver a solid 14.1% year on year growth in sales.

As we look back at the first nine months of the year, the Mexican restaurant chain had to take its lumps like most companies.

However, unlike many companies, Chipotle was able to emerge as a much stronger version of itself compared to where it was before the pandemic.

In response, its shares have risen almost 60% year to date.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. We currently have a vested interest in the shares of Alphabet (parent of Google), Amazon, and Chipotle Mexican Grill. Holdings are subject to change at any time.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 29 November 2020:

1. Politics, Science and the Remarkable Race for a Coronavirus Vaccine – Sharon LaFraniere, Katie Thomas, Noah Weiland, David Gelles, Sheryl Gay Stolberg and Denise Grady

Moderna’s goal was to get from a vaccine design to a human trial in three months. The design came quickly. “This is not a complicated virus,” Mr. Bancel said.

Dr. Graham said that after China released the genetic sequence of the new virus, the vaccine research center zeroed in on the gene for the virus’s spike protein and sent the data to Moderna in a Microsoft Word file. Moderna’s scientists had independently identified the same gene. Mr. Bancel said Moderna then plugged that data into its computers and came up with the design for an mRNA vaccine. The entire process took two days…

…By early fall, political pressures that had been building all year burst into the open. Federal regulators were trying to issue guidelines to ensure enough follow-up of clinical trial participants to make sure the vaccines were safe, but White House officials were blocking them. The president was attacking F.D.A. officials as antagonists intent on thwarting his re-election.

Dr. Bourla had been dragged into the political thicket, in part because of his own promises that Pfizer expected clinical trial results by October. The president ballyhooed that deadline on the campaign trail, and tried to publicly link himself to Pfizer’s leader.

Dr. Sahin, of BioNTech and Pfizer’s partner, said Dr. Bourla was trying to manage “an uncomfortable situation.” But when the president went after the F.D.A., Dr. Bourla drew a line, deciding that public confidence in a vaccine was at stake. “We had statements against the F.D.A., the deep state, et cetera, that really were concerning for me,” he said. “We needed to speak up.”

He called Alex Gorsky, the chief executive of Johnson & Johnson, another leading contender in the vaccine race, then recruited leaders from other companies. Together, they drafted a statement that said the industry would “stand with science” and follow F.D.A. guidelines. By Sept. 8, nine companies, including Moderna, had signed on.

2. Why Everyone’s Suddenly Hoarding Mason Jars – Jen Doll

But Marisa McClellan, a canning expert and cookbook author who’s a brand ambassador for Ball (yes, even mason jars have brand ambassadors these days) says we’re simply in a cycle that — along with economic recession — tends to happen every 10 years or so. In times of economic insecurity like the last recession in 2009, when McClellan started her Food in Jars blog, people turned to canning to soothe their fears, and mason jar sales took off.

This pattern happened in the Great Depression and World War II, when canning surged and there were mason jar sales spikes and lid shortages; again during the back-to-the land movement in the 1970s and ’80s; and again as people prepared for the Y2K disaster that never came. Now, in a time of pandemic, employment upheaval, political turmoil, a growing distrust in our established systems, the jars are once again in high demand.

In other words, there may be no better barometer of the state of our economy than the mason jar.

3. How To Think For Yourself – Paul Graham

There’s room for a little novelty in most kinds of work, but in practice there’s a fairly sharp distinction between the kinds of work where it’s essential to be independent-minded, and the kinds where it’s not.

I wish someone had told me about this distinction when I was a kid, because it’s one of the most important things to think about when you’re deciding what kind of work you want to do. Do you want to do the kind of work where you can only win by thinking differently from everyone else? I suspect most people’s unconscious mind will answer that question before their conscious mind has a chance to. I know mine does.

Independent-mindedness seems to be more a matter of nature than nurture. Which means if you pick the wrong type of work, you’re going to be unhappy. If you’re naturally independent-minded, you’re going to find it frustrating to be a middle manager. And if you’re naturally conventional-minded, you’re going to be sailing into a headwind if you try to do original research.

One difficulty here, though, is that people are often mistaken about where they fall on the spectrum from conventional- to independent-minded. Conventional-minded people don’t like to think of themselves as conventional-minded. And in any case, it genuinely feels to them as if they make up their own minds about everything. It’s just a coincidence that their beliefs are identical to their peers’. And the independent-minded, meanwhile, are often unaware how different their ideas are from conventional ones, at least till they state them publicly…

…Fortunately you don’t have to spend all your time with independent-minded people. It’s enough to have one or two you can talk to regularly. And once you find them, they’re usually as eager to talk as you are; they need you too. Although universities no longer have the kind of monopoly they used to have on education, good universities are still an excellent way to meet independent-minded people. Most students will still be conventional-minded, but you’ll at least find clumps of independent-minded ones, rather than the near zero you may have found in high school.

It also works to go in the other direction: as well as cultivating a small collection of independent-minded friends, to try to meet as many different types of people as you can. It will decrease the influence of your immediate peers if you have several other groups of peers. Plus if you’re part of several different worlds, you can often import ideas from one to another.

But by different types of people, I don’t mean demographically different. For this technique to work, they have to think differently. So while it’s an excellent idea to go and visit other countries, you can probably find people who think differently right around the corner. When I meet someone who knows a lot about something unusual (which includes practically everyone, if you dig deep enough), I try to learn what they know that other people don’t. There are almost always surprises here. It’s a good way to make conversation when you meet strangers, but I don’t do it to make conversation. I really want to know.

4. There’s Always a Chart – Michael Batnick

If you’re looking for evidence that shorts have thrown in the towel, and therefore now’s the time to get cautious, there’s a chart for that.

If you’re looking for evidence that actually, an absence of bears doesn’t mean an overwhelming amount of bulls, there’s a chart for that too…

…If you’re looking for evidence that strong breadth is bullish and not bearish, you guessed it; there’s a chart for that too….

…If you’re looking for something to confirm your view, you’re going to find it. Whether it’s a data point that supports your ideas or a contra data point that negates it, thereby making you even more confident, then you’re going to find that too.

5. The Tweet That Led To A Science Paper About Galactic Crepuscular Rays – Phil Plait

Y’all should know Judy Schmidt’s name by now. I’ve linked to her work many times here on the blog; she’s an image processing wizard, taking raw images from Hubble and turning them into ridiculously beautiful art.

There’s science there, too, like a weird nebula she and I tried to figure out in a nearby galaxy. We never really reached a conclusion on that one, but sometimes what she does leads to not just science, but a science publication.

And in this particular case it started with a tweet:

“Looking at this new pic of IC5063 (from Barth’s Prop15444), trying to figure out if I can make a color image… hmm maybe not, but are these cones I’m straining to see real, I wonder?”

This is a Hubble image of the sorta nearby galaxy IC5063, which is about 160 million light years away. It’s a disk galaxy, though it’s hard to tell in that image. What Judy was straining to see are what look like rays of light coming out from the center, very faint, just barely above the background levels of the image.

A lot of astronomers follow her, and a conversation started (click through the tweet above to see the whole thing). Dr. Julianne Delcanton suggested they look like ionization cones: Intense light from the center of the galaxy blasts out and zaps gas around it, creating glowing triangles of light in images. We all agreed it does look like that (especially after Bill Keel processed the image to enhance the rays), and then, after Judy asked if they could be shadows, one of us (cough cough) suggested they do look like crepuscular rays: Opaque stuff deep in the center of the galaxy blocks the light in some directions but not others, so you see bright and dark rays fanning out, like rays of light from the setting Sun (crepuscular means relating to twilight)…

…This idea of torus shadowing had been speculated for a while, but never before seen. So this is a first! And it’s all because Judy loves processing Hubble images, saw something funny, and decided to throw it out to the community on social media.

6. Happiness Won’t Save You – Jennifer Senior

More than 40 years ago, three psychologists published a study with the eccentric, mildly seductive title, “Lottery Winners and Accident Victims: Is Happiness Relative?” Even if you don’t think you know what it says, there’s a decent chance you do. It has seeped into TED talks, life-hack segments on morning shows, even the occasional whiff of movie dialogue. The paper is the peanut butter and jelly sandwich of happiness studies, a staple in any curriculum that looks at the psychology of human flourishing…

…There were flaws in the study — its design, alas, was as crude as an ax — but you can see why it became famous. It had an irresistible takeaway: Money! It doesn’t buy you happiness! Perhaps even more fundamentally, it had a sexy, almost absurd, premise. What kind of mind would think to pair lottery winners and accident victims in a research paper? Who in academic psychology had such a cockeyed imagination? It was social science by way of Samuel Beckett….

…The answer to that question is a fellow by the name of Philip Brickman, a 34-year-old rising star at Northwestern University. He was warm, irrepressible, spellbinding to talk to; his mind was a chirping hatchery of ideas. Unlike so many of his peers, his preoccupations had little to do with cognitive processes. Rather, they had to do with matters of the heart: how we cope with adversity; how we care for others; how we form commitments, subdue inner conflicts, wrench meaning and happiness from this brief life.

“He wanted the world to be a more humane place,” his closest friend, Jeffery Paige, told me.

So for Brickman to come up with a study like this one made perfect sense. It was idiosyncratic, humanistic and, above all, relevant: Does money fulfill us? Does irremediable damage to the body cause irremediable damage to the spirit? Can we simply adapt to anything?

What, ultimately, do we need to carry us through?

Not long after publishing that study, Brickman left Northwestern for the University of Michigan, where he’d become the director of the oldest and most storied arm of the Institute for Social Research. It was a prestige gig, an honor often reserved for academics at the pinnacle of their careers. Paige, a professor emeritus of sociology at the University of Michigan, told me he thought Brickman was destined for the National Academy of Sciences one day.

We’ll never know. On May 13, 1982, at the age of 38, Philip Brickman made his way onto the roof of Tower Plaza, the tallest building in Ann Arbor, and jumped. It was a 26-story fall. The man who’d done one of psychology’s foundational studies about happiness couldn’t make his own pain go away.

7. The Road Ahead after 25 years – Bill Gates

Twenty-five years ago today, I published my first book, The Road Ahead. At the time, people were wondering where digital technology was headed and how it would affect our lives, and I wanted to share my thoughts—and my enthusiasm. I also had fun making some predictions about breakthroughs in computing, and especially the Internet, that were coming in the next couple of decades.

Next February, I’ll release another book, this one about climate change. Before it hits the shelves, I thought it would be fun to look back at The Road Ahead and see how things turned out.

As I wrote in The Road Ahead, we tend to overestimate the changes that will happen in the short term and underestimate the ones that will happen over the long term. That is certainly my experience with the book itself. I was too optimistic about some things, but other things happened even faster or more dramatically than I imagined…

…One thing I wrote about that hasn’t happened yet—but I still think will happen—is the way the Internet will affect the structure of our cities. Today the cost of living in a dense downtown, like Seattle’s, is so high that many workers (including teachers, police officers, and baristas) can’t afford to live there. Even high earners spend a disproportionate percentage of their income on rent. As a result, some cities are arguably too successful, and others are not successful enough. It’s a real problem for our country…

…The Road Ahead has a lot in common with my new book, How to Avoid a Climate Disaster. Both are about how technology and innovation can help solve important problems. Both share glimpses into the cutting-edge technology I get to learn about.

One thing is different: The stakes are higher with climate change. As passionate as I am about software, the effort to avoid a climate disaster has a whole other level of urgency. Failing to get this right will have bad consequences for humanity. But you can also see the glass as half full. There are huge opportunities to solve this problem, eliminate our greenhouse gas emissions, and create new industries that make clean energy available and affordable for everyone—including people in the world’s poorest countries.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. We currently have no vested interest in any companies mentioned. Holdings are subject to change at any time.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 22 November 2020:

1. The Magic of Mushrooms – Packy McCormick

Because of long-held negative or recreational associations, most people are unaware that psychedelics are the most promising treatment for a wide range of mental health issues — from depression to alcoholism to anorexia — that we’ve ever seen.

The psychedelic renaissance couldn’t have come at a better time. The world desperately needs innovative solutions to mental health disorders. The worldwide numbers are staggering…

…The total direct and indirect costs of the mental health epidemic are expected to reach $6 trillion by 2030, up from $2.5 trillion in 2010, according to the World Economic Forum. The Lancet Commission estimates that number to be as high as $16 trillion when you include the loss of productivity, and spending on social welfare, education, and law and order. Despite the huge need, the last real innovation in the fight against mental illness was the release of Prozac in 1988.

After fifty years in the dark, though, psychedelics are once again getting the chance to shine. Led by public figures like Michael Pollan, Tim Ferriss, and even Joe Rogan, and leading institutions like Johns Hopkins, NYU, Berkeley, and Imperial College London, therapeutic psychedelics are going mainstream again:

2. We Have No Idea What Happens Next – Morgan Housel

There’s a theory in evolutionary biology called Fisher’s Fundamental Theorem of Natural Selection.

It’s the idea that variance equals strength, because the more diverse a population is the more chances it has to come up with new traits that can be selected for. No one can know what traits will be useful; that’s not how evolution works. But if you create a lot of traits, the useful one – whatever it is – will be in there somewhere.

The same thing applies to the diversity of events a society faces.

It still feels hard, if not reckless, to imagine the upside of Covid-19. We may not have even seen the worst of it yet.

But everyone in the world has suddenly been exposed to problems they had never seen before. They’ve become aware of new risks. New constraints in how they live, work, and play. A whole new set of perspectives on how to keep your family safe, run a business, and use technology.

Some of the changes that will bring are obvious. We’re already better and faster at creating vaccines than we were a year ago. Doctors are more knowledgeable. Remote work is more efficient. Travel is less necessary.

Then there’s a second tier of change: perhaps using our new knowledge of mRNA vaccines to treat other diseases, like cancer. It seems likely, but who knows.

Then there’s the big unknown: the crazy, disconnected, counterintuitive change set in motion this year that we’ll only be able to piece together in hindsight. The kinds of things that only happen when seven billion people have their lives thrown upside down, experience a bunch of stuff they’d never imagined, and are either motivated or forced to do something completely different than they had considered in January.

3. What is the Future of Fiscal Policy Now That the Election is Over? – Nathan Tankus

Worse still, the third wave of Coronavirus is in full swing. New York City schools could be shut as early as Monday, and indoor dining should probably already be shut. This second wave of shutdowns will be more economically harmful than the first wave because any savings they had were exhausted by the first wave and it is most likely that most affected businesses have already exhausted their access to credit (and perhaps even their willingness to take on more debt).

It’s likely that the second wave of shutdowns will accelerate permanent job losses while the temporary job losses generate renewed drops in demand. In other words, the economic situation has still been deteriorating and it will likely get hammered at a time where fiscal support is, at best, months away.

4. Extra Buzz #19: Ant Group: The Biggest IPO That Wasn’t – Rui Ma

And now we come to the biggest riddle of this all. I hope I’ve given you enough context on why the regulators wanted to step in, and why the citizens were in support.

But that still doesn’t explain why the IPO was halted literally two days before the listing. As Reuters reported, there are folks with knowledge of the deal who say that it was due to outrage at Jack Ma’s comments. The regulators were personally offended and retaliated because they were thin-skinned. I can believe that. Jack wasn’t kind. More importantly, as I quoted in my article for Tortoise, Western experts thought this was an indication of the government’s capriciousness and unreliability. China doesn’t know what it’s doing, as one oped columnist wrote, in the provocatively titled “Ant’s Suspended IPO Turns Jack Ma Into Ray Dalio’s Worst Nightmare.” (Ray Dalio, by the way, has since responded .. nope.)

But was that how it was actually perceived on the ground in China and by those seeking to do business in China? I turned to the many China-focused investors I’ve now come to know as part of doing Tech Buzz, as well as some old friends from venture, and asked them if they felt the same. Nope. Hmmm, interesting, I thought. How about Chinese entrepreneurs and engineers? Normal everyday folk? Nope.

No matter who I asked, no one thought it was to upstage Jack Ma specifically, and everyone thought this was a good move. Many thought his speech was made out of desperation, a last ditch attempt to sway public opinion which failed. No one gets to Jack’s level in China without having some major cunning, they explained. The regulators would be people he knew well, not ones he was still feeling out. The hotheadedness isn’t indiscriminate … it was strategic. If it put him in the line of fire, that was because he knew which buttons he was pressing. A few even believed this was a stunt, fully coordinated* by Jack and the regulators in order to legitimize Ant while crushing the rest of industry. (That seems too “5D chess” for me.)

Either way, it didn’t matter, because there was every reason the government should step in, to stop the greed. On the part of Ant, and on the part of everyone in that microlending business. “Thank goodness the government did so before the public bore the losses,” they said, pretty uniformly. Kind of true. Even if you weren’t planning to buy Ant shares, you could’ve been an indirect shareholder of sorts — as Chairman Eric Jing noted at the beginning of the Bund Summit speech, “hello to our big shareholder, the Social Security Fund, sitting in the audience.”

Furthermore, every single Chinese person said, why would the government need to go to such lengths to punish Jack Ma? Couldn’t they just say he had an issue with his taxes or something like that? As for why the last-minute halt, that’s simple enough — there are so many competing and conflicting interests among these agencies — it’s embarrassing that it got down to the wire as it did, but better to have reversed course than to have the public holding the bag for the sake of saving face and trying to get the Biggest IPO in the bag.

Isn’t that interesting? You could use the concept of “saving face” in these two directly opposing ways, and yet explain the situation to your satisfaction. 

5. Twitter thread on the real story behind the infamous Tulip Mania in the 1600s – Sahil Bloom

In 1637, the Dutch Republic erupted into a speculative fever over an unlikely item…the tulip. Tulip Mania has become a legend synonymous with market euphoria and bubbles. But is this tale all it’s cracked up to be?

1/ The tulip is a spring-blooming flower native to the valleys of the Tien Shan Mountains in Central Asia. It is believed to have been introduced to Europe in 1554, when an ambassador of the Holy Roman Emperor sent tulip bulbs and seeds to Vienna from the Ottoman Empire.

2/ Tulips gained in popularity as people were attracted to their rich color and ability to grow in sub-optimal conditions. They soon became a coveted status symbol for the wealthy. The Semper Augustus, with its colorful, flame-like streaks, was the most desired of them all.

3/ By the early 1600s, the Dutch Republic was entering a golden age. Many financial innovations popped up during this time – the first stock exchange, for example. But it was another financial innovation that would propel tulips into historical lore: the futures contract.

4/ As tulips grow slowly and may take several years to bloom, paper contracts were written that entitled the buyer to the future tulips. These contracts were freely-traded. So in addition to the physical market for tulip bulbs, a thriving paper market was established.

5/ By 1634, the prices of tulip bulbs were rising sharply. Traders would meet in special taverns. In these taverns, no bulbs ever changed hands, just the paper contracts. Speculative buying (buying on the expectation of further price increases) took hold. The frenzy was on.

6. Cederberg Capital Investor Day Fireside Chat – November 2020 – Cederberg Capital and Tao Ye

So the corona virus, if you’re standing in February of this year, it’s very scary because we would literally have to plan out for zero revenue – not zero profit – for how many years and for how many months that we can sustain as a company, without selling and servicing a car. So, our HR department (I was in the US with my family at the time). My HR director in our emergency business meeting, proposed something to me that truly reflected our culture. She said, now that we know as a company that we could sustain ourselves for quite a long time without selling anything, can I propose that we pay full bonus and salary for employees for February.

Now that was a very profound statement, if you put yourself in the shoes of February… Scary time. And the local government actually does not mandate you pay full salary anymore. They basically said you could just pay a bare minimum, like 20% of your base salary, and then you’re legally okay. But we’re not only paying the base, we’re paying the full bonus as if people are hitting all the KPIs.

Now I will say that we don’t really publicise it internally, but over time people understand it. And they’ve learned to appreciate that. So coupled with the fact that they live in a very simple and direct culture environment, and also coupled with the fact that we’re a fast growing company, which creates a lot of opportunities for people. Those couple of things probably enable us to manage to keep and retain and grow a group of very, very good managers out of the industry that is very, very loyal and very, very effective and very, very productive. I could talk about this…

7. Twitter thread on how to detect financial fraud using Benford’s Law – Nick Maggiulli

\1 Tweetstorm on How to Detect Financial Fraud Using Simple Math (aka Benford’s Law or the Leading Digit law)

If you haven’t heard of this, it will BLOW YOUR MIND.

First, let’s consider something mundane: The revenue of every company in the S&P 500 in 2017.

\2 For example, Walmart had 2017 revenue of $485 billion, Exxon Mobile had $237 billion, and Amazon had $177 billion.  Now, let’s take the LEADING DIGITS of these numbers.  So, the leading digit for Walmart’s revenue is 4, for Exxon is 2, and for Amazon is 1.

\3 Question: If we took the leading digits for revenue for ALL the companies in the S&P 500 would you expect the distribution of leading digits to be equal?  For example, is a leading digit of 8 more likely than 5?  Is 2 more likely than 3?

\4 This may sound silly to you because they should be equally likely, right?

NOPE.

In fact, over 30% of the revenue numbers will have a leading digit of 1, while 5% will have a leading digit of 9. More of the numbers will start with 1 than 2, 2 than 3, and so on to 9.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. We currently have a vested interest in Amazon. Holdings are subject to change at any time.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 15 November 2020:

1. The Big Lessons From History – Morgan Housel

Harry Houdini used to invite the strongest man in the audience on stage. Then he’d ask the man to punch him in the stomach as hard as he could.

Houdini was an amateur boxer, and told crowds he could withstand any man’s punch with barely a flinch. The stunt matched what people loved about his famous escapes: the idea that his body could conquer physics.

After a show in 1926 Houdini invited a group of students backstage to meet him. One, a guy named Gordon Whitehead, walked up and started punching Houdini in the stomach without warning.

Whitehead didn’t mean any harm. He thought he was just performing the same trick he saw Houdini pull off on stage.

But Houdni wasn’t prepared to be punched like he would be on stage. He wasn’t flexing his solar plexus, steadying his stance, and holding his breath like he normally would before the trick. Whitehead caught him off guard. Houdini waved him off, clearly in pain.

The next day Houdini woke up doubled over in pain.

His appendix was ruptured, almost certainly from Whitehead’s punches.

And then Harry Houdini died.

The riskiest stuff is always what you don’t see coming.

2. The Overton Window & Understanding What Is Possible – Sean Stannard-Stockton, CFA

The Overton Window is a concept named for Joseph Overton, a political theorist. Overton argued that the range of political policy possibilities was not directly related to any politician’s individual preferences, but rather by the range of options that are politically acceptable to mainstream voters. This range of politically acceptable outcomes changes over time, but at any given moment, only policy options that fall within the Overton Window have any hope of becoming reality…

…What is amazing about the Overton Window is that most of the time you aren’t even aware it exists. The possibilities that are Unthinkable are not thought of as not possible due to current social norms, rather they are viewed as actually impossible. But when the window shifts, it is hard to even remember how things used to be…

…A few years ago, the concept of Modern Monetary Theory (MMT) started to enter the public consciousness. While this theory is not new, it was previously considered Unthinkable. Starting a couple of years ago, the Overton Window began to shift with MMT sliding from Unthinkable to Radical. When Congress approved a simply massive level of spending back in March, market participants began to realize that one way to view this action was as a real-time experiment in MMT informed policy. Not that either the Democrats or Republicans who voted on a bipartisan basis did so because of MMT, but rather because MMT adherents argue that this massive level of government spending will not result in increased inflation nor will the large associated deficit, or the increase in government debt, prove to be problematic.

A full description of MMT is beyond the scope of this post. But in June, prominent MMT economist Stephanie Kelton published The Deficit Myth, which offers an incredibly accessible explanation of MMT that is easily understandable (and frankly enjoyable) for non-economists. In fact, the book is a major, mainstream best seller which is a rare feat for any economics book…

…The key point is not that MMT is correct. Rather that the MMT view of the world is now entering the Overton Window and is probably best described today as Acceptable. It is not yet considered Sensible or Popular, but in a strange way it may actually already be Policy in that the massive deficit spending engaged in this year is widely agreed as having been one of the most effective fiscal interventions in history.

While some may argue that the Democrats’ likely (unless they win both Georgia runoff races) failure to win the Senate means large government spending is off the table, the Overton Window is not about which party holds a slight majority in Congress. Rather the Overton Window describes the range of policies that society deems acceptable and both political parties are required to operate within this window.

You can see this already playing out with the Republican controlled Senate authorizing a shocking $2 trillion stimulus bill in March, twice as large as all of the stimulus spending done during the Financial Crisis. And today, Republican Senators are calling for “just” $500 billion in additional spending, while the bipartisan Problems Solvers Caucus, made up of moderates on both sides of the aisle, are calling for “just” $1.5-$2.0 trillion in new spending. Either one of these bills, on top of the over $2 trillion in spending already approved, would have been completely unacceptable prior to COVID. The size of this spending dwarfs anything that voters or a majority of Congress would have considered possible.

The Unthinkable is now Policy.

3. Chipotle to Unleash Digital-Only Restaurants – Danny Klein

While the surge was undoubtedly a pandemic byproduct of quarantine behavior and heightened adoption for things like delivery and mobile ordering, the alluring point for Chipotle was it held 80–85 percent of digital sales gains in Q3 even as it recovered 50–55 percent of in-store business. This past quarter, about half of Chipotle’s digital business came via delivery (the rest through order ahead and pickup). As of October, Chipotle’s digital mix remained in the “high 40s,” Niccol said…

…With this all stirring at break-neck pace, it’s not surprising to see Chipotle enter another surging trend. The chain Wednesday unveiled its first digital-only restaurant.

Called the “Chipotle Digital Kitchen,” it will be located just outside the gate of the military academy in Highland Falls, New York. It’s opening Saturday for pickup and delivery only, and will allow Chipotle to enter more urban areas that typically wouldn’t support a full-size restaurant, the company said. Additionally, it will allow for flexibility with future locations.

Chipotle’s Digital Kitchen concept is focused on accelerating digital business in non-traditional venues. The company said the build is unique “because it does not include a dining room or front service line.” Guests must order in advance via the fast casual’s website, app, or through third-party delivery partners. Orders are picked up from a lobby designed to include all of the sounds, smells, and kitchen views of a traditional Chipotle, the company added.

It will also service large catering orders available for pickup in a separate lobby with its own dedicated entry.

4. Cancer Screening Leaps Forward – Andy Kessler

So Illumina spun out a new company named Grail in Menlo Park, Calif., to do what’s known as Circulating Cell-free Genome Atlas studies. Running DNA sequencing on regular blood samples, Grail generates hundreds of gigabytes of data per person—the well-known A-T-G-C nucleotides, but also the “methylation status,” or whether a particular DNA site’s function is turned on or off (technically, whether or not it represses gene transcription).

Most popular DNA screenings for cancer risk test only a single gene site, like BRCA1. But Grail’s chief medical officer Josh Ofman tells me, “cancer may show up as thousands of methylation changes, a much richer signal to teach machine learning algorithms to find cancer” vs. a single site. “There are 30 million methylation sites in the entire human genome on 100,000 DNA fragments. Grail looks at a million of them.” It takes industrial-grade artificial intelligence to find patterns in all this data, something a human eye would never see.

Mind you, this is not a consumer 23andMe test of your genome that says you might have, say, a 68% chance of getting cancer. Grail is detecting the signature of actual cancer cells in your blood. According to validation data published in the Annals of Oncology, the test can find 50 different types, more than half of all known cancers.

5. Lessons in Growth Investing with Anu Hariharan – Patrick O’Shaughnessy and Anu Hariharan

I actually think there’s way more opportunity ahead of us. Let me compare it with a little few numbers. Pre-COVID I had looked at this. The total global market cap was $85 trillion. Internet economy enabled businesses was less than 10%, so roughly 8 trillion. Even if you assume a 10% CAGR and play this out. Let’s say in 2045, I think I had seen estimates that if you assume the global market cap is going to be around 450 trillion, Internet economy should surely be at least 15% of that, even if less like $60 trillion economy. Guess what? From 8 trillion to 60 trillion. I’m willing to bet all day long that we are still very, very nascent. Even in the most developed markets.

Let me make it further specific and real for people. Let’s look at the US economy. Pre-COVID, our Internet penetration was up 20% in 2019 and I think April reports 27%. A lot has been written about consumer eCommerce penetration. Not much has been said about B2B wholesale eCommerce penetration. B2B wholesale in the US is a $16 trillion market. Less than 8% of it is online. Less than 8%. 49% of B2B wholesale eCommerce transactions happen via phone and fax. And Faire which is one of the marketplaces that’s working on it is still just attacking a small sliver of retail. The retail market that they serve is a $670 billion market. You have so many more verticals here.

Think of aerospace, chemicals, industrials. You’re just going to see an explosion of vertical players in B2B wholesale eCommerce. B2C consumer eCommerce itself is still sub 30%. So therefore, just the Internet economy we’re just still scratching the surface. We just have years to compound, and I think we’re still in the early stages of the Internet economy…

…Well, there are a lot of people that have really helped me, but I think the kindest thing that comes to mind is Dr. Jeffrey Reed. He was my research advisor at Virginia Tech. I was doing my Master’s in wireless communications. This was in 2002, right after 9/11. And the funding that most state universities got from the government was completely slashed. Even private funding was at an all-time low. So I had come with the hope of getting a research fellowship. The university and the research group had no money to be able to fund me.

I come from a Tier-3 town in India. My parents were very middle class, and my dad had pretty much taken an entire loan against all his assets and could pay only for a year of my tuition. Come summer, and I was working enough in Virginia Tech to cover all my living expenses. But as an international student, you can work only 20 hours and you have to work in campus. You can’t work outside. So there’s only so much I could do. And I remember very vividly, this was July, and my dad basically said, “Look, this is it. This is the last straw. Finish whatever credits you can, you’re going to come back in August.” And I was like, “Yeah, I get it.”

And so I went to my advisor and said, “Look, I really can’t continue, and I need to find a way to graduate. So I should finish whatever credits I can in the summer, and maybe I could do it remotely. Would you be open to doing remotely?” He asked me, “How much money do you need?” And I said, “Well, I haven’t paid tuition this month. I need to pay $1,200.” He took a checkbook, wrote a check, and gave it to me without any questions. And I think if I look back in life, if he hadn’t done that, my life would have turned out very different.

6. Intel’s Disruption is Now Complete – James Allworth

So begins the story that Clay Christensen would love to tell about how Andy Grove of Intel famously came to be a convert to the theory of disruption. Christensen shared with Grove his research on how steel minimills, starting at the low end of the market, had gained a foothold and used that to expand the addressable market, continued to move upmarket, and finally disrupted the giant incumbents like US Steel.

Grove immediately grokked it…

…Yesterday, Apple announced the first Macs that will run on silicon that they themselves designed. No longer will Intel be inside. It’s the first change in the architecture of the CPU that the Mac runs on since… well, 2005, when they switched to Intel.

There’s a lot of great coverage of the new chips, but one piece of analysis in particular stood out to me — this chart over at Anandtech:

What about this chart is interesting? Well, it turns out, it bears a striking resemblance to one drawn before — actually, 25 years ago. Take a look at this chart drawn by Clayton Christensen, back in 1995 — in his very first article on disruptive innovation:

He might not have realized it at the time, but when Grove was reading Christensen’s work, he wasn’t just reading about how Intel would go on to conquer the personal computer market. He was also reading about what would eventually befall the company he co-founded, 25 years before it happened.

7. Twitter Thread On How To Interpret Pfizer’s COVID-19 vaccine news – Natalie E. Dean, PhD

Big news from Pfizer, with apparent high efficacy (>90%) based on 94 confirmed COVID-19 cases at their interim analysis.

A thread on how I interpret this news. Briefly:
“Celebrate, but let the process play out over time as intended.”
1/8

Vaccine trials are “event-driven.” They continue until enough endpoints have accrued (here, lab-confirmed *symptomatic* infections). Statisticians can take planned “early looks” at the data, and so allow us to tell if a product is working exceptionally well (or not at all). 2/8

When the vaccine is highly effective, we need less data to see it. While trials are planned for 150+ total events, this is what we need for a 60% efficacy vaccine. I say this because 94 events is a lot of data for a vaccine trial, and even more so when efficacy exceeds 90%. ⅜

Pfizer’s first analysis was planned for 32 events, which they pushed back after discussions with FDA. But by the time they analyzed the data, 94 had accrued. This shows how quickly trials can generate results when placed in hotspots (and how much transmission is ongoing!). 4/8

While the results are exciting, of course we will want to independently evaluate them. Unlike treatments, promising data from vaccines do not immediately change standard of care. The vaccines will undergo a rigorous review process first which will play out over time. 5/8

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. We currently have a vested interest in Apple, Chipotle Mexican Grill, and Illumina. Holdings are subject to change at any time.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 08 November 2020:

1. A Twitter thread on Jon Boorman’s final words – Jon Boorman

1) I’ve become very stoical in recent years which has made this much easier to process. I’ve had an absolutely glorious life. I sometimes feel I’ve had two or three

6)It’s a deep privilege to be able to say goodbye to people.

Deep privilege.

Constant family.

Countless friends…

7) Knowing that you will die is fairly innocuous, of course we all will. But when you know you face death within weeks/months, your perspective changes. There’s elements of that we should have in our daily lives…

9) I know I will die. I just know what will kill me. And roughly when.

So buy that coffee.

Have that ice cream.

And be nice.

2. How Discord (somewhat accidentally) invented the future of the internet – David Pierce

Citron learned to code because he wanted to make games, and after graduating set out to do just that. His first company started as a video game studio and even launched a game on the iPhone App Store’s first day in 2008. That petered out and eventually pivoted into a social network for gamers called OpenFeint, which Citron described as “essentially like Xbox Live for iPhones.” He sold that to the Japanese gaming giant Gree, then started another company, Hammer & Chisel, in 2012 “with the idea of building a new kind of gaming company, more around tablets and core multiplayer games.” It built a game called Fates Forever, an online multiplayer game that feels a lot like League of Legends. It also built voice and text chat into the game, so players could talk to each other while they played.

And then that extremely Silicon Valley thing happened: Citron and his team realized that the best thing about their game was the chat feature. (Not a great sign for the game, but you get the point.) This was circa 2014, when everyone was still using TeamSpeak or Skype and everyone still hated TeamSpeak or Skype. Citron and the Hammer & Chisel team knew they could do better and decided they wanted to try.

It was a painful transition. Hammer & Chisel shut down its game development team, laid off a third of the company, shifted a lot of people to new roles and spent about six months reorienting the company and its culture. It wasn’t obvious its new idea was going to work, either. “When we decided to go all in on Discord, we had maybe 10 users,” Citron said. There was one group playing League of Legends, one WoW guild and not much else. “We would show it to our friends, and they’d be like, ‘This is cool!’ and then they’d never use it.”

After talking to users and seeing the data, the team realized its problem: Discord was better than Skype, certainly, but it still wasn’t very good. Calls would fail; quality would waver. Why would people drop a tool they hated for another tool they’d learn to hate? The Discord team ended up completely rebuilding its voice technology three times in the first few months of the app’s life. Around the same time, it also launched a feature that let users moderate, ban and give roles and permissions to others in their server. That was when people who tested Discord started to immediately notice it was better. And tell their friends about it.

Discord now claims May 13, 2015, as its launch day, because that was the day strangers started really using the service. Someone posted about Discord in the Final Fantasy XIV subreddit, with a link to a Discord server where they could talk about a new expansion pack. Citron and his Discord co-founder, Stan Vishnevskiy, immediately jumped into the server, hopped into voice chat and started talking to anyone who showed up. The Redditors would go back, say “I just talked to the developers there, they’re pretty cool,” and send even more people to Discord. “That day,” Citron said, “we got a couple hundred registration[s]. That kind of kicked the snowball off the top of the mountain.”

3. I Have A Few Questions – Morgan Housel

Who has the right answers but I ignore because they’re not articulate?…

…Which of my current views would I disagree with if I were born in a different country or generation?

What do I desperately want to be true, so much that I think it’s true when it’s clearly not?…

…What looks unsustainable but is actually a new trend we haven’t accepted yet?

What has been true for decades that will stop working, but will drag along stubborn adherents because it had such a long track record of success?

Who do I think is smart but is actually full of it?

What do I ignore because it’s too painful to accept?

4. My Biggest Post-Election Market Questions – Ben Carlson

Does the stock market care about anything anymore? We are still in the midst of a global pandemic that is only getting worse, oil prices went negative in the spring and we just went through a contested presidential election.

And yet the S&P 500 is just 2% below all-time highs.

Yes, the stock market plunged nearly 35% during those tumultuous days of February and March but it still boggles the mind how much we’ve gone through this year and the stock market has given a collective shrug based on where we stand.

5. A Twitter thread on 100 lessons on investing – Anand Chokkavelu

1. Most of this list is dedicated to insight on stock picking, but know this: It’s darn hard to beat the market. 99% of people are best served steadily buying and holding low-cost index funds at the core of their portfolios — and I may be understating that 99% figure.

3. Being contrarian doesn’t mean just doing the opposite. The “contrarian” street-crosser gets run over by a truck.

12. Example No. 3: leveraged ETFs. Bastardized ETFs like the Direxion Daily Financial Bull 3X ($FAS) are another great way to lose money. Even if you guess right on direction, the mathematics of the daily reckoning mean these instruments are long-term losers.

30. Adding money to winners > Adding money to losers. This one’s hard. One way I try to remind myself: Every 10-bagger has to double first; Every total loss has to drop 50% first.

38. While price matters, it’s hard to overpay for a truly great growth company. Like in a marriage, the trick is to correctly identify one, build conviction by learning more quarter after quarter, and try to hold on through the inevitable tough times. (cont.)

57. Long-tail events (aka black swans), as explained in @nntaleb’s Incerto series, are by definition unpredictable. And brutal. Since life isn’t a Monte Carlo simulation, we should think hard about our true personal risk tolerances.

85. If you can learn quickly from your own mistakes, you’re ahead of the game. If you can learn quickly from others’ mistakes, you’ve won the game.

91. Downer alert: We like control, but we can’t control everything. Life and luck can (and will) trump investment plans. You can do everything right and still die penniless. All we can do is give ourselves a better chance to succeed.

100. Despite my best efforts to improve each day, I will repeatedly and thoroughly fail to heed these lessons. Let’s hope you’re better at No. 85 than I am.

6. Traffic fatality rates spiked during the pandemic – Joann Muller

There were fewer cars on the road last spring during the height of the pandemic, but traffic fatality rates increased 30% in the second quarter as evidence suggests drivers engaged in more risky behavior, federal officials say…

…Risky behavior, along with a potential reduction in law enforcement and safety messaging during the pandemic, could have contributed to increased fatality rates, NHTSA concluded.

7. The Wizard Of Apps: How Jeff Lawson Built Twilio Into The Mightiest Unicorn – Miguel Helft

About a year after Lawson and two friends founded Twilio in 2008, Lawson was invited to introduce it at a popular networking mixer called the SF New Tech Meetup. Rather than talk about an inherently difficult-to-explain technology, Lawson decided to let the Twilio software speak for itself. In front of a thousand people Lawson began telling his story while simultaneously coding a Twilio app—a simple conference line. In just a few minutes he opened an account and secured a phone number, and after writing a handful of lines of code that everyone in the room could understand, his conference line was up and running. Lawson then asked everyone to phone in, and just like that a mob of developers was on a giant conference call. Lawson then added some more code, and his app called everyone back to thank them for participating. As phones throughout the room began buzzing, the crowd went wild with enthusiasm. “He is the let-me-show-you-what-we-can-do type of exec,” says Byron Deeter, of Bessemer Venture Partners, an early backer who has become Twilio’s largest shareholder. “There’s no bravado and no ego, and that gives him a special charisma and authenticity.”

Lawson’s parlor trick did more than generate industry buzz. It epitomized a developer-centric business strategy that has fueled its growth. Twilio is exceedingly simple to use and charges no upfront fees, so programmers often use it to test an idea or product. Pretty soon that product scales and turns into a six- or seven-figure account that required no traditional sales process. “We onboard developers like consumers and let them spend like enterprises,” Lawson says. Like others that have embraced developer-driven marketing—Amazon for computing services, Stripe for payments, New Relic for analytics—Twilio benefits as companies increasingly turn to software for differentiation. “As that happens, and companies hire more developers, they come in with Twilio in their tool belt,” Lawson adds.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. We currently have a vested interest in Amazon.com and Twilio. Holdings are subject to change at any time.