One Step Up Issue #10

This week we look at Big Tech, Jio, Nintendo's/Disney, the Psychology of Human Misjudgment, the Gig economy, Klarman's letter to investors + more

Morgan Housel @morganhousel

Housing isn’t a great investment but for most people it’s the best investment they will ever make because it’s the only asset they will leave alone and let compound for 10,20,30 years.

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1. Social’s Capital’s investment thesis on Amazon ($AMZN) from 2016

   

2. The Indian Matchmaker (Jio + tech partnerships)
   No, this has nothing to do with the latest Netflix show, but - Seema Taparia approves.

   

3. How Big Tech Makes Their Billions

   Fabulous visual representation of the different revenue streams of the Famous Five (Amazon, Facebook, Alphabet, Microsoft & Apple).
   With revenues close to $900 bn, they rival GDPs of several nations.

4. Nintendo, Disney, and Cultural Determinism

   Nintendo now had three "pieces of business": a dedicated proprietary hardware video game business ("the way most of our consumers interact with us"); (2) a mobile gaming business; (3) the expansion of Nintendo’s IP outside of core gaming applications (“[Nintendo is] about Mario, Zelda, Pokémon — all these wonderful intellectual properties… How we leverage these across a variety of entertainment platforms is how we're looking to grow the company… a belief that [consumers will] come back, maybe buy a Mario T-shirt, eat that Mario cereal, or buy a Switch, because of affiliation and affection they have with that IP.”)

5. The Psychology of Human Misjudgment

6. Unbundling Work from Employment 

   

7. Media 2020: Rise of the Renaissance Creator

   JD @jarroddicker

   The Renaissance Creator - the hybridization of the individual as both a creator & an entrepreneur. It's those who have built a career in media or journalism & now decide to become entrepreneurs, & those who have built a career in biz or tech and now decide to become creators. /2

8. Three’s Company: Of Shopify, Amazon, and Etsy

   Amazon built a behemoth by aggregating commoditized suppliers under the Amazon banner, and that grand centralization naturally provided a market opportunity for a complement — a mirror opposite — which Shopify launched with its platform for differentiated suppliers, who operate under their own banners, using the ecommerce infrastructure of an otherwise faceless Shopify. 

9. Seth Klarman’s latest investor letter

   Surreal doesn’t even begin to describe this moment. Events that would typically span years have been compressed into a few months this spring. Historically low unemployment in February turned into historically high unemployment by April. A 34% decline in the S&P 500 from late February to mid-March was almost entirely reversed in only 11 weeks of trading, a dizzying degree of volatility that may not be over yet. During this period of recovery, every single stock in the S&P posted a gain, a rally that might best be described as overwhelming but certainly not discriminating.

   Investing lies at the intersection of economics and psychology. That crossroads is particularly challenging to navigate right now because investor psychology is surprisingly ebullient even though business fundamentals are often dreadful (albeit in some cases improving off of unfathomable lows).

   Peering into the Future: The Possible Longer-Term Ramifications of the COVID-19 Pandemic:

10. iPhone pricing over the last decade+: fascinating

Alex Murrell @alexjmurrell

Great chart on iPhone pricing by @asymco. • Began at $600-700 • Old models took low end to $450 • 64gb increased high end to $850 • The Plus size raised it to $950 • 256gb raised it to $1150 • The Max size raised it to $1450 13 years. ASP almost doubled.

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Till next time.