Reading across disciplines is one of the best ways to improve our investment acumen. Here is a summary of some of the best articles I read this week.
I especially try to not post Corona related articles as that is all one gets to read in all traditional media.
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Amazon spies on its own staff
Dozens of leaked documents from Amazon’s Global Security Operations Center reveal the company’s reliance on Pinkerton operatives to spy on warehouse workers and the extensive monitoring of labor unions, environmental activists, and other social movements.
The documents offer an unprecedented look inside the internal security and surveillance apparatus of a company that has vigorously attempted to tamp down employee dissent and has previously been caught smearing employees who attempted to organize their colleagues. Amazon’s approach of dealing with its own workforce, labor unions, and social and environmental movements as a threat has grave implications for its workers’ privacy and ability to join labor unions and collectively bargain.
Amazon intelligence analysts appear to gather information on labor organizing and social movements to prevent any disruptions to order fulfillment operations.
How to think differently
It’s not enough for a public market investor to predict correctly how a company will do. If a lot of other people make the same prediction, the stock price will already reflect it, and there’s no room to make money. The only valuable insights are the ones most other investors don’t share.
You see this pattern with startup founders too. You don’t want to start a startup to do something that everyone agrees is a good idea, or there will already be other companies doing it. You have to do something that sounds to most other people like a bad idea, but that you know isn’t — like writing software for a tiny computer used by a few thousand hobbyists, or starting a site to let people rent airbeds on strangers’ floors.
Some Business & Leadership Lessons From Past US Presidents
- Temperament is the great separator.
- Strong opinions, weakly held.
- Storytelling is more important than statistics.
- Simple is better than complex.
- Patience is key.
- Timing and luck will always play a role.
All of the above are equally true for investors.
All that is wrong with VC funding
In 2008, Jeremy Neuner and Ryan Coonerty, two city-hall employees in Santa Cruz, California, decided to open a co-working space. They named their company NextSpace Coworking. But their company faced a big challenge, finding a venture capitalist (VC) to invest in their firm. All the VCs wanted to have a share of WeWork. When Jeremy Neuner began having meetings with venture capitalists, he said, “their first question was ‘How do you compete with WeWork? Why should we invest with you instead of them?’ ” WeWork was reportedly losing millions of dollars each month, but it was expanding to new locations at a feverish pace. Neumann’s promises to VCs were so wildly optimistic, bordering on ridiculous, that Neuner was convinced WeWork had to be a scam.
Mr. Neuner was building a solid business, but the VCs wanted fantasy. “All we needed was five million dollars a year in revenues, and we would have made money for everyone,” he told me. “That’s enough to earn a living and buy a house and put your kids through school. But no one wanted something that just made a healthy living. They all wanted to find the next Zuckerberg.” Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars.
Using Biology to create new materials
We are now looking to biological materials to solve challenges that were once thought to be engineering problems – for example, developing cellular processes to desalinate water more efficiently; creating biological molecules that will help us build more comfortable medical prosthetics; and engineering microbes that could clean up underwater oil spills. From this year, we will find the building blocks for these materials not in petroleum-based technologies, but in biology.
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