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[VIC - 148] An orgasmic mouth explosion of deliciousness

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TL:DR 😉 Attractive entry point for Square; we have to think differently about Google; cutting down on
 
January 13 · Issue #148 · View online
Jeremy Hurst
TL:DR 😉
Attractive entry point for Square;
we have to think differently about Google;
cutting down on cliche usage;
and a delicious treat.

Business & Money
One of the things I like to do when I become sufficiently curious about a company is to buy a few shares. Nothing material, but perhaps $50 or so. I feel more compelled to do research when I have a tiny bit of skin in the game, so you might think of it as a sort of forcing function or education tax. (this wasn’t possible before companies like Robinhood because every trade cost you $4 - $7)
One of the companies that I did this with a while back was Lending Club (LC). I like marketplaces in general, specifically wants where demand regularly outstrips supply. And it seems consumer credit would fit that bill.
But when I started to dive in, I couldn’t find anything special about the business. They don’t appear to have access to any proprietary data that might allow them to recover loans at a higher than average rate. In fact, they seem to have less data than other financial institutions would. And marketplaces are all about the use of data to increase the value to both the demand and supply side of the value exchange.
And more importantly no network effects. I guess you might say their ability to asses risk gets better over time, but it feels like we’re squinting.
So I unloaded the shares. And I’m glad I did. The company has performed abysmally.
But speaking of access to proprietary data, one company that I am excited about is Square (SQ). Yep, the company that started out making those little white card readers that would plug into a smartphone allowing anyone to accept mobile credit payments.
A while back I bought a few shares and started down the research path. After scaling the card reader business, the company moved into creating a simple POS system (both hardware & software) for small businesses that you often see in coffee shops and retail boutiques. And that meant they now had access to proprietary transaction data (😍) for tons of small businesses. So the logical next step from there was to launch a new segment of the business called Square Capital wherein the would make small business loans to their customers.
So when the stock recently took a 50% haircut,
it felt like a great entry point for me and I decided to increase my position size. And to be clear, the shares are still fantastically expensive by traditional valuation standards, but companies like Square will always be expensive.
Gotta love that proprietary data!
Human Progress
I imagine that Google must have the largest repository of data and information on the planet. That is, of course, a very profitable position to be in. But also a seemingly precarious one.
In the west, we enjoy an open and largely unregulated internet. And I think that, for the most part, that is a good thing. It allows for free speech, the unfettered flow of information, and permissionless innovation. But it is also a significant attack vector.
The US enjoys a dominant (though perhaps shrinking) position on the global stage in many ways. Economically and militarily, we are unmatched. But due to the nature of the open internet, our opponents can walk in the front door and basically do whatever they want.
So coming back to Google, they must be square in the crosshairs of any bad actors. They hold the keys to the kingdom.
I bring this up because we are hearing a lot of late about the “tech-lash.” That is the cultural, social, and political backlash against the large technology companies that control the consumer internet. But much of the conversation seems, to me, to be focused on the wrong things.
Sure, “fake news” and bots are problems. Sure, algorithms can be gamed to get more distribution of divisive content. Sure, Google should pay more taxes and avoid anti-competitive behavior. And from a regulatory perspective, perhaps breaking up Google and forcing the different business lines to operate as standalone businesses might bring some small benefit to the technology industry broadly. But again, I’m not sure we’re focusing on the right things.
What worries me is thinking about an aggressive cyber attack against Google. That could take many forms, but if something like that were even remotely successful, I’m not sure we can even fathom the implications.
So we have one company controlled by a small group of people, with a couple hundred thousand employees and finite resources, that is likely under constant attack by all sorts of adversaries (both state and non-state).
So I think the thinking here needs to be completely orthogonal to traditional models of corporate governance and regulation. It’s less about monopolistic tendencies or consumer welfare, and more about protecting the most valuable resource known to man.
And as usual, I have far more questions than I do answers. Should Google just become a 4th branch of government, the information & technology branch? Should they be subsumed into the executive branch with the full backing of the Department of Defense? Do Google services just become utilities? (is that not already the case, for all intents and purposes)
I’m not sure, but one thing is clear. You know that saying that goes “this time is different,” when in fact this time is never actually different? Well, THIS time is different. I don’t believe the internet is just another technology like electricity or the internal combustion engine. The rules are fundamentally different. And therefore, we may need some fundamental changes to the way we organize and govern ourselves.
Philosophy
I was recently doing some reading about cliches and how they are often inadequate descriptors of what they describe. When you use the same word or phrase over and over to describe a wide variety of occurrences, those occurrences lose their unicity and any special character.
So I began to think about what words or phrases I use most and one that came to mind is the word “dirty.” When listening to trance or deep house, subsets within electronic dance music, I will often refer to a song as dirty. But if so many songs are dirty, how is one any different from the last?
Another way to describe the meaning of dirty is to think about the word disgusting. Think about a time when you tried a new dish or food item that you strongly disliked. You might say it was disgusting and you may have also made a grimacing face as you encountered the off-putting taste or texture. Now imagine that same reaction but with the emotion flowing in the opposite direction. Imagine you try a new dish and you grimace harshly and sit back at the sheer goodness of it. It’s almost unfair to other foods that something could be this good.
That’s what I mean when I say a song is dirty. It’s just disgustingly good. But I might be better served in the description to describe it slightly differently each time to best convey the emotion or feeling and that particular moment.
More broadly, there are so many other cliches that we regularly use that rob human expression and experience of its vitality. So I’ll be making a small effort to bring some of it back, at least in my own small corner of existence.
My Latest Discovery
If you’ve ever made cookies at home, you know you have to eat a bit of the cookie dough when you finish with the mixing bowl. After all, it’s simply the right thing to do. But if you’re anything like me, you’ve likely gone overboard on a few occasions and ended up with a stomach ache from the raw eggs. If only there was another way.
For a long time, the only other way was chocolate chip cookie dough ice cream (nom nom 😍). It’s maybe 90% vanilla ice cream, 8% cookie dough, and 2% chocolate chips. So not bad, but doesn’t quite get you all the way to cookie dough heaven.
Well, a couple weeks ago Hana and I were wandering around (ok maybe we were hunting down yummy treats) West Village when we stumbled upon DŌ, Cookie Dough Confections. It’s a desert spot where the cookie dough is completely edible. You can enjoy a variety of flavors of cookie dough on their own, or have it mixed into ice cream or other treats. I had one scoop of chocolate chip cookie dough and one scoop of sugar cookie dough and both were magical. You might think about all of those tiny one-off moments when you’ve had a small morsel of cookie dough, and roll them all into one orgasmic mouth explosion of deliciousness.
It's A Wrap!
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