08/21/18

The Wizard of Omaha and Tech

Big Red Car here on a lovely, sunny Texas day, y’all. Hope it is going well for you and yours.

I always like to take a peek at what Warren Buffet owns as it relates to stocks. It is often an eye opener. It is often pretty damn plain vanilla and boring, but something caught my eye.

Buffett famously has eschewed investing in technology suggesting that there is a limited longevity and defensibility of the competitive advantage for tech based companies and that it is very difficult to identify the big winners at a time when their stock price is reasonable. This was his view back in 1999 when Forbes interviewed him for an excellent article. Take a second and consider that statement. This from a guy who has to deploy $200B in stocks.

Image result for images warren buffett

“My name is Warren Buffett. I’m 84 and I’ve been at this investing business for a long time. Don’t be blowing smoke up my ass about bitcoin and cryptocurrency. I was in business when the US was on the God damn gold standard.”

He and noted venture capitalist Marc Andreesson had a pithy exchange about the future of bitcoin. When Buffett called it a “mirage” Andreeson countered that Buffett “…was just an old white guy crapping on a technology he didn’t understand.” [I see no reason why Buffett’s ethnicity was germane to the discussion, do you?]

Buffet has long been quoted as saying, “All you people piling into dot-com stocks must be much smarter than I am, because I just don’t get it.”

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08/20/18

Dollar General, A Love Affair

Big Red Car here on a bright, sunny Monday morning back from visiting My Perfect Granddaughter in Savannah. She is a perfect baby.

Sleeps through the night, naps well, eats like a champ and loves her Momma, Daddy, Mimi, and Gwantpa. She can even hold her toes when the thought grabs her.

OK, Gwantpa, can you do this? Haha, you’re silly.

Which, of course, got me thinking about Dollar General  – wow, what a powerful transition, no?

Image result for dollar general logo

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08/9/18

Mattresses – the Sleeping Edge of the Internet

Mattresses, Big Red Car? Really?

OK, so there are powerful forces at work here, but, first, we need a nap. A nice refreshing nap.

Mattresses are a symptom of several interesting things:

 1. Mattresses are symptomatic of how the Internet is wrecking “bricks & mortar” retail.

 2. Mattresses are symptomatic of how the Internet is spawning unbridled competition.

 3. Mattresses are symptomatic of how the cycle of legacy businesses disrupted by the Internet and returning to the original legacy methodology is asserting itself.

 4. Mattresses are symptomatic of how the commercial real estate business is being impacted by the move of commerce to the Internet.

Shall we?

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08/7/18

Subscription Income Power – Peleton

Peleton, Big Red Car? You’re kidding, right?

Shut up and start peddling, y’all, I’m as serious as avoiding a heart attack.

So, the Big Red Car likes Peleton for the diversity of its income. It generates sales income – the one off sale of a Peleton bike or treadmill – and monthly recurring revenue with a monthly membership. It also finances the sale of the bike or treadmill at 0% interest while upselling you on shoes, weights, headphones, heart monitors, bike mat, water bottles.

Live-Streaming

Where’s the bike mat and why aren’t you dressed like Lance Armstrong?

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08/6/18

The First Amendment Ignorance

The First Amendment, Big Red Car? What about it? Everybody knows about the First Amendment.

Big Red Car here on a grayish morning, but it will burn off soon. So, I’m looking at a study with alarming results.

Out of 1,000 persons surveyed only ONE was able to name the five rights protected by the First Amendment to the United States Constitution. Worse still, 40% of the respondents could not mention a single right.

Image result for image us constitution

The first ten amendments to the US Constitution are contained in a document called the Bill of Rights.

How is that possible?

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08/5/18

Control – SNAP, an exemplar in control

Big Red Car here filled to overflowing with a good church sermon. I will have to digest it a bit.

So, one of the things the Big Red Car preaches to his CEO coaching clients is, “Retain control of your company at all costs. When you lose control, the probability of your being replaced goes up astronomically.”

This is what the Big Red Car says when a venture capitalist wants to make an investment resulting in an “after money” equity ownership of 20%, but wants two seats on a five-man Board of Directors.

“Uhhh, CEO, if the VC owns 20% then he gets 20% of the board seats. That’s one, not two!”

Interestingly enough, CEOs seem to always win this argument. This is a matter of control.

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08/4/18

North Korea Expectations

North Korea – whassup?

Big Red Car here on a lovely Saturday morning back from blueberry pancakes at the Counter Cafe, y’all. Is this a great country or what?

So, I have been following the continuing saga with North Korea and their de-nuclearization. The story continues.

Let’s update it a bit, shall we?

US Secretary of State Pompeo meeting with North Korean Foreign Minister Ri Yong Ho in Singapore at the ASEAN Conference. I think our guy can take him.

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08/4/18

Employment Structural Change

Big Red Car here on a Saturday morning getting ready to go out for blueberry pancakes at the Counter Cafe.

I have always been interested in delving beneath the covers of employment in the United States. The average person focuses on BLS (Bureau of Labor Statistics) U-3 – the widely reported level of unemployment which is currently at 3.9%, but that paints a very shallow picture of the employment status of the economy. Perhaps, an overly optimistic one.

Let me give you the bottom line first – the US economy is undergoing a huge structural change as the Baby Boomers begin to retire and younger folk have a different attitude toward employment.

I have often observed that the prospect of long term, stable employment is a thing of the past and the “gig” economy is here to stay. Talking to you, Mr. Internet.

My favorite source of useful data and analysis is dshort.com which is run by Doug Short, PhD, under the banner of Advisor Perspectives. You should be reading this guy’s stuff. The best in the business.

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