Jurgis
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Posts posted by Jurgis
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I generally view Visa and Mastercard and Costco as companies that generate a tremendous amount of value add for their customers. If we invert this, there are companies that act like leeches. One example is Seamless. Trust me, restaurants can't afford to give away 20-30% of their revenue to Seamless for something that is supposed to be recurring. I feel that Seamless is particularly a leech. What are others?
By "leech" I assume you mean a business that provides far less value to its customers than it charges. Unless there is some regulatory capture or market failure, how does a business like that last? In other words, why would customers keep using it. For example, if Seamless is truly a leech, why are restaurants doing business with it?
My contribution: ESPN, AMC Networks, Viacom, MSGN, etc. They were exploiting a legacy distribution system and are now losing customers hand over fist and the barriers to distribution fall.
I think industry structure acts as the enabler of Seamless' leech status. At one point, Seamless was a niche provider of a "seamless" way to order meals for I Banking analysts working really late hours in the office. Since time is money, the few restaurants that are on Seamless' platform that got the orders truly got access to a new source of revenue versus those that are not on the platform. As time goes on and Seamless went more main stream, they held onto the 20-30%. Now every John and Jane orders from Seamless. That's why if you go to restaurants, they will ask you to call direct or order direct from their websites. This is probably the best sign that a company is acting like a leech.
To get back, there are lots of restaurants and they are afraid to lose sales to another restaurant. So they bid up prices to get the order flow. This is usually 20-30% of the actual order. Being from the food industry, this is likely fine if this was an "one time" CAC to acquire a new recurring customer. But restaurant diners are generally promiscuous and tend to try different restaurants. Hence, they don't stay loyal customers. So the restaurants have to constantly pay up to get that order flow. Most customers probably aren't aware of the take of Seamless and feels that the transaction is Seamless. The TAM could be so much larger if Seamless decided to take 3-5% of a transaction which is much more sustainable for a restaurant. Unlike e-commerce such as Amazon where Amazon is providing the warehousing, i.e. rent and logistics, restaurants still have to pay rent which is 10% or higher, the 20-30% take rate on a gross margin that is 40-60% really cuts into the profits before adding cooks and other overhead. It is simply unsustainable. But the leeches keep leeching because restaurants are low barrier to entry but high barrier to exit business much like small hedge funds. There are lots of passionate hedge funds managers (one man shops), but the barrier to exit is very high.
I don't use Seamless (not in my area?), I use Grubhub. I can see that restaurants would think them as a leech. IMO the restaurants are mostly forced into this no-win situation that they do lose orders if they are not on a platform. Yeah, some outstanding restaurants can leave the platform and get the same orders through their phones or websites. But for most restaurants I will just order from their competitor that is on the platform. So I'd stay with platform rather than staying with the restaurant. (And I would pretty much never call a restaurant if they are not on a platform and they don't have website - calling just sucks.) Yeah, it sucks for the restaurant, but that's how it is.
What is it about the platform that causes you to continue to use it?
Convenience. I have past orders that I can reuse - which I do. I have my account, CCs, etc. I know the UI, I know the UI works. I know that ordering works.
And TBH restaurants mostly don't leave, so I know what I can order and from which restaurants. If restaurants left en-masse, I'd be forced to switch. But if just one-two restaurants leave, then I choose platform.
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I generally view Visa and Mastercard and Costco as companies that generate a tremendous amount of value add for their customers. If we invert this, there are companies that act like leeches. One example is Seamless. Trust me, restaurants can't afford to give away 20-30% of their revenue to Seamless for something that is supposed to be recurring. I feel that Seamless is particularly a leech. What are others?
By "leech" I assume you mean a business that provides far less value to its customers than it charges. Unless there is some regulatory capture or market failure, how does a business like that last? In other words, why would customers keep using it. For example, if Seamless is truly a leech, why are restaurants doing business with it?
My contribution: ESPN, AMC Networks, Viacom, MSGN, etc. They were exploiting a legacy distribution system and are now losing customers hand over fist and the barriers to distribution fall.
I think industry structure acts as the enabler of Seamless' leech status. At one point, Seamless was a niche provider of a "seamless" way to order meals for I Banking analysts working really late hours in the office. Since time is money, the few restaurants that are on Seamless' platform that got the orders truly got access to a new source of revenue versus those that are not on the platform. As time goes on and Seamless went more main stream, they held onto the 20-30%. Now every John and Jane orders from Seamless. That's why if you go to restaurants, they will ask you to call direct or order direct from their websites. This is probably the best sign that a company is acting like a leech.
To get back, there are lots of restaurants and they are afraid to lose sales to another restaurant. So they bid up prices to get the order flow. This is usually 20-30% of the actual order. Being from the food industry, this is likely fine if this was an "one time" CAC to acquire a new recurring customer. But restaurant diners are generally promiscuous and tend to try different restaurants. Hence, they don't stay loyal customers. So the restaurants have to constantly pay up to get that order flow. Most customers probably aren't aware of the take of Seamless and feels that the transaction is Seamless. The TAM could be so much larger if Seamless decided to take 3-5% of a transaction which is much more sustainable for a restaurant. Unlike e-commerce such as Amazon where Amazon is providing the warehousing, i.e. rent and logistics, restaurants still have to pay rent which is 10% or higher, the 20-30% take rate on a gross margin that is 40-60% really cuts into the profits before adding cooks and other overhead. It is simply unsustainable. But the leeches keep leeching because restaurants are low barrier to entry but high barrier to exit business much like small hedge funds. There are lots of passionate hedge funds managers (one man shops), but the barrier to exit is very high.
I don't use Seamless (not in my area?), I use Grubhub. I can see that restaurants would think them as a leech. IMO the restaurants are mostly forced into this no-win situation that they do lose orders if they are not on a platform. Yeah, some outstanding restaurants can leave the platform and get the same orders through their phones or websites. But for most restaurants I will just order from their competitor that is on the platform. So I'd stay with platform rather than staying with the restaurant. (And I would pretty much never call a restaurant if they are not on a platform and they don't have website - calling just sucks.) Yeah, it sucks for the restaurant, but that's how it is.
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Uber.
???
Uber is a great value for customers. You might argue it's a bad value for drivers, but this would be pretty contentious argument. And if not Uber, then you have taxi monopolists which are the real leeches.
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Trust the journalists to produce sensationalist non-sequitur headline.
Instead of writing a headline "Online advertising effects are difficult (impossible?) to measure" or "Online advertising may be ineffective" or let's go with sensationalist, but with a grain of truth: "Online advertising is worthless", they choose "The new dot com bubble is here: it’s called online advertising".
The fact that online advertising effects are difficult (impossible?) to measure and that (some) online advertising might be ineffective does not mean that there is a "new dot com bubble". It's like learning that Superbowl ad effects are difficult (impossible?) to measure and that (some) Superbowl ads might be ineffective and writing a headline "New Superbowl bubble!".
It's ironic that the journalists are doing the same thing that they accuse their subjects of doing: drawing baseless conclusions from insufficient data.
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Germany and other Skandinavien countries have pushed the curve far far down, so they have a chance squash the second waves ( the extend of which is a function of how far down the first wave have been pushed ) with aggressive test and track.
I haven't been able to envisage the end state here. So imagine you are super-successful like Oz, NZ, Singapore and your cases go to zero. The rest of the world (ROW) screws up and muddles its way to group immunity, perhaps at horrific cost. So ROW have 70-80% people with immunity, and the virus is still circulating. Now you have three ways out.
1. Vaccine is developed and you get immunity without the horrific costs.
2. The virus is totally eradicated.
3. You live in your bubble, separate from the rest of the world until either 1 or 2 happen. This doesn't seem like a viable option if its a long time.
So whats the end state these guys are thinking of or hoping for?
You might be misunderstanding the situation with "ROW have 70-80% people with immunity, and the virus is still circulating".
This does not mean that virus is actively shedding from 70-80% of ROW. So, yeah Oz, NZ can live in their bubble by testing everyone who comes into the country. It's not that high load on testing. Admit people who test negative, kick out the ones who test positive, and track or quarantine everyone who enters for incubation period. Is that impossible for them to do long term (3+ years)?
Edit: I guess tourism would be mostly screwed though.
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Of course even the UFO conveniently-timed distraction was BS:
Aliens brought Covid to Earth.
The truth is out there!
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So its not just information for sake of information. The purpose is to reduce spread of infection.
And resources needs to be focused on where it matters most.
How do we know where it "matters most"?
Masks. Nursing homes where more effort is put in separating infected from not infected.
Better ventilation and training at Nursing homes.
We are fighting the Virus with on twitter and with the Fed. So far, the Virus doesn’t seem to care.
Virus does not have Twitter account yet? Oh horrors. How does it establish social presence then?
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Instead of creating all of this "stimulus" money, wouldn't it be cheaper to just build a manufacturing plant and we could make a ton of these masks?
I think that is 100% right. It wouldn't cost anything if they distributed N95 masks at cost for all Americans to the pharmacies and people paid cost.
That is what South Korea did. They are smart, I give them that.
Masks would be an incredible high ROI.
I actually just snail mailed some mask research to the most powerful person in the free world - The first lady - Melania Trump.
We will see if she is able to get through to Trump.
At least more and more people are slowly getting there and wearing more masks.
I linked earlier in this thread to an economics paper that calculates the prospective value of masks, cloth, surgical, and N95. Each mask is worth thousands of dollars in expected value because the crisis is so expensive that anything that reduces the R0 and the time it lasts by even a little is worth a ton. Is was obviously the right thing to do 2 months ago to use the DPA to launch large-scale mask production and to encourage everyone to make cloth masks and wear them (like the Czech did).
Should have done 2 months ago. Do it now anyway*
*not gonna happen
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I guess what's interesting is that Akre still holds 4+% of MKL. I don't see why MKL is more attractive than BRK. I also don't quite understand holding something like MKL in a fund. You're basically buying a company that holds a bunch of stocks and not even at a discount. Also somewhat true for BRK, but BRK at least has pretty big wholly owned businesses part.
I agree with you that BRK > MKL.
I would also point out that again using the Q1 2018 13-F's and the Q1 2020 13-F's, Akre has gone from owning 3.7% to 3.6% of MKL and it has declined from 8%+ to a ~4% position.
Akre has been "selling" MKL in a tax efficient manner via dilution with inflows and letting other positions get bigger.
Good insight.
Maybe he sold BRK for tax reasons too: a good year to match whatever BRK gains they have against losses elsewhere? Not sure. Just thinking aloud. ::)
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I guess what's interesting is that Akre still holds 4+% of MKL. I don't see why MKL is more attractive than BRK. I also don't quite understand holding something like MKL in a fund. You're basically buying a company that holds a bunch of stocks and not even at a discount. Also somewhat true for BRK, but BRK at least has pretty big wholly owned businesses part.
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Can somebody post a picture of a Donald Trump cheque. I'm dying of curiosity.
Here it is.
Thanks.
I'm LMAO at the cheque. There's probably a regulation somewhere of what can go on cheques. The only place the could put his name in is in the description. Likely because the president doesn't have signing authority at the treasury. BUT Vona Robinson does. So she gets to sign the cheques, not Trump. Ooooohh he must have been pissed about that.
There's a follow up on this. A letter arrived today from Donnie advertising his check and the great job he's doing for hardworking Americans. Has a Spanish text on the other side too. Pure Cialdini man. How can this genius not be reelected?
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When I read the topic - without reading what you wrote in it - I immediately thought the same thing as you did: computer virus! hack!
However, I wonder if that would hit physical businesses hugely too. I.e. if your airline reservation system is down, you're not going to fly. If Visa/MC networks are down, you're not gonna buy anything. If Google is down, well does that mean all your Android phones and apps are down?
I guess it would depend what exactly would happen on the tech side. If it's just one company affected, then that company's stock may or may not crash.
You may remember that some time ago there was a number of companies affected by ransomware that were halfway offline for a month or so. I don't remember all the companies affected, but I don't think any suffered permanent losses. It could be argued that the incident was not very big though.
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Seems like we need to close down the White House, quarantine the inhabitants and deep clean it.
Nah, we should reopen it! And no testing, tests are overrated! Make the White House Open Again!
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Kind of investment related and pretty good.
https://twitter.com/justbrosef/status/1259266070759845890?s=21
This is me:
(4) You are a male (of course). Your business card reads ‘Langdon Jr the third’. Your grandpa has a building at Princeton named after him but you still went to Stanford. You’re a keen hiker. You think frozen acai bowls are great.Apparently. ::)
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I am confused with this:
“We are the last major domestic mask company,” he wrote on Jan. 23. “My phones are ringing now, so I don’t ‘need’ government business. I’m just letting you know that I can help you preserve our infrastructure if things ever get really bad. I’m a patriot first, businessman second.”
In the end, the government did not take Bowen up on his offer. Even today, production lines that could be making more than 7 million masks a month sit dormant.
So is his phones ringing? If so, why the production lines are dormant?
I (and millions of others I think) would like to buy N95 masks regardless of government purchases. I'd think states and private businesses would like to buy them too - so it's not even b2consumer issue. So why are the lines dormant?
I'm confused too. That part is strangely written, I get the feeling that the backstory on this was cut out of the story and the line is now lacking context.
Maybe he needs financing to start the lines. But even that is weird. If he went to Amazon or Walmart or ??? and offered 7m masks per month with prepayment terms, I'd think he would get easy deals, no?
Edit: maybe it's the question of price? Maybe his prices are uneconomical and would be considered price gouging if compared to other sources?
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I am confused with this:
“We are the last major domestic mask company,” he wrote on Jan. 23. “My phones are ringing now, so I don’t ‘need’ government business. I’m just letting you know that I can help you preserve our infrastructure if things ever get really bad. I’m a patriot first, businessman second.”
In the end, the government did not take Bowen up on his offer. Even today, production lines that could be making more than 7 million masks a month sit dormant.
So is his phones ringing? If so, why the production lines are dormant?
I (and millions of others I think) would like to buy N95 masks regardless of government purchases. I'd think states and private businesses would like to buy them too - so it's not even b2consumer issue. So why are the lines dormant?
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5) The Only Investment Guide You'll Ever Need, by Andrew Tobias - kind of a personal finance book written with humor and plain talk (but talks about the inflation, taxes and stock markets of the 70s).
There has been tens of editions of this one. I'd think latest editions don't really cover 70s. :)
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Biden and Trump both get infected before the election and don’t make it.
And Melania elected President!
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As Liberty quoted...
Trump: Katie, she tested very good for a long period of time and then all of the sudden today she tested positive... This is why the whole concept of tests aren’t necessarily great
And if you still don’t think this guy is nuts he went on to say..
“Today, for some reason, she tested positive...: For some reason??
Well DUH!
She's Pence's secretary... so it's a virgin infection. Hallelujah!
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For healthy populations, the virus will resemble the typical flu.
Yeah, sure developing countries have healthy populations. They are just crushing this chart: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
Please all go to Africa and work in subsistence farming. You'll be so healthy. Just leave all your stuff for people who decide to stay and suffer in the first world countries. They need it.
::)
Healthy with respect to blood pressure and diabetes particularly is what I meant. And those are key issues for this virus as I understand it.
Diabetes by country: https://www.indexmundi.com/facts/indicators/SH.STA.DIAB.ZS/rankings
Hypertension prevalence by country: https://www.who.int/gho/ncd/risk_factors/blood_pressure_prevalence/en/
Hypertension deaths by country: https://www.worldlifeexpectancy.com/cause-of-death/hypertension/by-country/
Here is my source for rural Africans as I initially mentioned: https://nutritionfacts.org/2017/04/06/high-blood-pressure-normal-but-not-natural/
I don't know who (population) your source includes.
In another article, the same source, Dr. Michael Greger, says the same thing applies to rural Chinese. The key point is a largely vegan whole food diet, with meat a couple of times a year, leads to the good outcomes in blood pressure and diabetes. That is not what rich countries typically have. If Africans and Chinese adopt our diets, they will have the same results. The results cited by Dr. Greger refer to rural Africans with traditional diet.
So you pick a random nutritionist blog and then make claims while disregarding the statistical data across countries?
I guess that's par for the course here.
Edit: That nutritionist blog cites an article in prestigious Lancet. I clicked the link. Well, yes. It is an article published in Lancet. On 5 January 1929.
Great supporting data. :-X
BTW, I don't have much issues with dietary suggestions in the blog. They might be totally fine.
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For healthy populations, the virus will resemble the typical flu.
Yeah, sure developing countries have healthy populations. They are just crushing this chart: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
Please all go to Africa and work in subsistence farming. You'll be so healthy. Just leave all your stuff for people who decide to stay and suffer in the first world countries. They need it.
::)
Healthy with respect to blood pressure and diabetes particularly is what I meant. And those are key issues for this virus as I understand it.
Diabetes by country: https://www.indexmundi.com/facts/indicators/SH.STA.DIAB.ZS/rankings
Hypertension prevalence by country: https://www.who.int/gho/ncd/risk_factors/blood_pressure_prevalence/en/
Hypertension deaths by country: https://www.worldlifeexpectancy.com/cause-of-death/hypertension/by-country/
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For healthy populations, the virus will resemble the typical flu.
Yeah, sure developing countries have healthy populations. They are just crushing this chart: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
Please all go to Africa and work in subsistence farming. You'll be so healthy. Just leave all your stuff for people who decide to stay and suffer in the first world countries. They need it.
::)
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NVEC.
I love a company has a buyback program but only buys shares when they are really cheap. They bought shares in late 2015, early 2016 and then stopped. They didn't buy in Jan or Feb this year but in March they started buying again!
Quite the contrast to other mgmts that buy back shares mechanically EXCEPT during market swoons when mysteriously, they stop buying back their own shares at the lows.
wabuffo
What kind of company is this?
NVE is a leader in the practical commercialization of spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store and transmit information. The company manufactures high-performance spintronic products including sensors and couplers.
What, what?
You should read the fun facts: https://www.nve.com/funFacts.php
These make everything clear, no?
I think we'll have to ask Spekulatius to explain this stuff to us.
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A startup I am investing in is looking for expert virologist for consultation on how their product may be made to be used for Covid. Please private message me if you have the qualifications and are interested. (Might be small chance, but decided to ask.)
Businesses That Act Like Leeches
in General Discussion
Posted
I'm gonna disagree with all three:
IBKR - they are nickel-and-diming their customers like there's no tomorrow. Pay for quotes, pay trade commissions, pay if you don't have enough trades per month. Some of these may have been removed, but because of competition and not because IBKR are good guys. So zero loyalty to IBKR, screw them.
DIS - I think the park prices are ridiculous.
High-speed internet - most countries have much cheaper high-speed internet than US. US monopoly pricing sucks.