This episode was a reminder of Munger's latticework of mental models, and how much knowledge from other fields can actually be transferable to the world of investing.
2/ "you can double the conversion rate of a call center if you're asking people to choose between three options of subscription, and you simply add the sentence, "Most people choose B."
This reminded me of NZS capital's complexity investing framework.
3/ "Apple was the first to wonder about what it felt like while you were doing it. Which is a second-order consideration, which is actually much closer to being customer-centric than asking what functions you can perform for people."
$AAPL
4/ Interesting observations on $Uber. No doubt, it's a much better product than what we had before, but I have my fair share of doubt.
5/ "Is Silicon Valley too engineer heavy? In that it's created a culture which would rather solve a problem through engineering than through psychology because your status derives from that."
6/ Pretty interesting set of examples why better, faster, cheaper may not always be the "good or true" idea
Red Bull, Zoom, Starbucks, Amazon Prime, Dyson, Five Guys
7/ "...designing for the disabled is a particularly good use of designer's time."
Reminded me of Taleb's piece on "The Dictatorship of the Small Minority"
8/ "...I would argue that a large part of marketing needs to be both experimental and probabilistic. We shouldn't turn it into this optimization game, efficiency optimization game."
9/ "There's a game theoretic reason to be irrational, which is most of your competitors find it very, very easy to copy the rational things you do. They find it very, very hard for often for cultural reasons to copy the irrational things you do."
10/ Why isn't there any Amazon Prime for hotel chains?
11/ "One of the great ideas you have is that to reach intelligent answers, you have to ask really dumb question."
Great explanation here to this counterintuitive statement.
another great interview of @danielgross and @natfriedman by @benthompson
Some notes from the interview:
on Japan:
"...We’ve been puzzled by why TSMC’s margins aren’t better for a little while. Why are they not taking more of the margin? And I think you just said it, they’ve been through so many rounds of boom and bust and they’ve outlived a lot of people who made the wrong moves."
...I find a really interesting mispriced thing in the world might be Japan, the entire country.
...if you’re trying to consolidate all your bets on semiconductors, Japan’s a pretty interesting geography, because I think they’re going to have all these components at the end of the day, in basically one single country.
...What I sort of wonder is in a world where, if AI really happens, maybe the 2030s are the decade of Japan, if they really are able to manufacture all of these components that have to get offshore from Taiwan for various reasons."
"Don't bet against Zuck"
On Gemini:
"...not only did they deliver a good model, but they delivered innovation along an axis, a couple orders of magnitude out from what anyone else had delivered so far
...it’s clear that Google has figured something out here, and they have a bit of a secret and we’ve all been looking for clues and poring over the literature to figure out what it is. But this is a real axis of differentiation."
Imagine opening Amazon’s earnings report 5 years from now and what do you think you might hope you paid more attention to? It’s very unlikely to be AWS topline growth rate this (or any) quarter.
If I have to guess, it’s the shipping+ fulfillment costs related developments that you would find more consequential 5 years from now.
I’ll explain why but let’s first take a look at some numbers quickly before going back to that discussion.
3P revenue grew by almost +20%, ads +25%, subscription mid-teen, and 1P MSD+.
AWS, which was the key focus for many, grew by ~12%. More on AWS later; let’s start more segment level discussion with Amazon, ex AWS.
Thread on $META follow-up call and some more thoughts on the quarter
Meta's DAU/MAU is at all-time high. Consumers vote with their time whereas "Intellectual Yet Idiot" class remains busy dissecting "surveillance capitalism"
chart h/t @east_cap
it seems the impact from the war so far has been minimal, and the wider 4Q revenue guide was likely just out of caution.
Meta had a terrific third quarter which makes the after-hours reaction (down ~3%) tad bit surprising, but perhaps understandable given the wider range of scenarios for advertising going forward.
Here are my highlights from tonight’s call.
Since 4Q’19, Meta added 880 Mn Daily Active Users/People (DAU/DAP) to its Family of Apps (FOA) properties.
Given Snap currently has 406 mn DAU, this means Meta added two “Snap” (and then some) in less than four years!!
DAU/MAU engagement looks steady across all regions. Overall DAU/MAU ratio has been inching up for the last seven consecutive quarters.
While Google Service segment did just fine, Google Cloud’s pace of deceleration in topline was a bit disappointing.
Here are my highlights from the call tonight.
After four consecutive quarters of single digit growth, Google returned to double digit growth this quarter.
Both Search and YouTube grew by double digit, but Google cloud’s topline growth came down from ~28% last quarter to 22.5% this quarter.
Google Services maintained mid-30s EBIT margin, but after posting QoQ margin expansion for the last 6 quarters, Google Cloud’s margin declined from 4.9% in 2Q’23 to 3.2% in 3Q’23.