1) Target fights back against Amazon, and wins!
In March 2017,
Target made a huge announcement: It planned to invest over $7 billion in a
turnaround strategy that would include:
- remodeling existing stores (and opening
smaller ones in urban areas);
- introducing new, private label brands; and,
- enhancing its digital shopping experience.
Wall Street thought
the plan was a disaster. On the day of the announcement, Target suffered its
largest stock plunge in almost a decade.
But fast-forward to
today, and Target is thriving. First-quarter results for 2019 beat analysts'
expectations. The store's private-label lines are exploding. And as comparable
store sales continue to rise, the stock price is trading at an all-time high.
2) Using Sequential Market Identification for
identifying stocks
In 1977, we financed
Apple… It was an era where knowing about microprocessors made the evolution of
the PC obvious. Steve Jobs was an employee at Atari in its early days. So I had
the advantage of all that knowledge before anybody else.”
It became very
apparent that Apple needed a different memory system. So Sequoia financed a guy
by the name of Jugi Tandon to go into a small five-inch disk drive business.
That decision was clearly driven by an application need in the PC which
required a solution that was faster, far more reliable, and had greater density
than an audiocassette. So we financed Tandon. And it was a spectacular
investment.” Tandon became a pioneering company in the PC disk drive
industry.
In 1987 we started
the internetworking industry with Cisco. We had previously invested in 3Com and
other similar companies, so we understood the connection of the Internet, and
all that it encompassed, probably better than most people. So we were looking
for Cisco when they were looking for us. That is how we prefer to invest, in an
anticipatory way.
The identification
of Ethernet and Internet infrastructure, specifically routers, were the third
and fourth successful applications of the the Sequential Market
Identification Model.
3) The skill of managing luck
Algorithms
are often much better at many decision tasks than humans.
Yet, research shows we’re more likely to choose a human forecaster
than an algorithm. And it’s ever worse when we see how an algorithm performs,
especially if it occasionally makes a wrong call. This is called algorithm
aversion.
epitomize the skill
of managing luck: they’re never certain, but constantly improving the odds.
That’s boring! It’s
not memorable or exciting. You don’t root for an algorithm. They never surprise
you on the upside. They’re never a hero, defying the odds. They don’t ‘try
hard’. They don’t offer a narrative.
4) What is happening in Venezuela?
Consumer prices have skyrocketed, and
the International Monetary Fund expects the inflation rate to
reach 10 million percent in 2019, which would be one of the worst cases of
hyperinflation in modern history.
Violence and hunger are widespread. Food shortages have reached new highs in recent
months, and 80 percent of Venezuelan
households don’t have sufficient access to food, according to monitoring groups. Grocery store shelves are
bare. Hospitals struggle to treat severely malnourished children.
The country’s public health system has collapsed,
leaving many without access to lifesaving medicine. The rates of several
preventable diseases have risen.
The migration of Venezuelans out of the
country has reached levels not seen before in modern history.
More than three million people have left since 2014
5) Why don't rich people stop working?
Studies over the
years have indicated that the rich, unlike the leisured gentry of old, tend
to work longer hours and spend less time socializing. And they
continue to diversify. Many of these people have been navigating work and
life in sixth gear for decades. Once they have no financial need to work they
have trouble shifting into lower gears.
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