Rivian is set to IPO at a market capitalization roughly on par with BMW. Rivian has produced a total of *56* RT1 vehicles (not a typo; no missing k), and delivered only 42 (mostly to company employees).
BMW group produces about 2.5m vehicles a year. It also has a large captive financing company and is sitting on >10bn euro of excess net cash. It has cumulatively invested tens of billions of euro in EV tech & will have a fully electrified fleet in coming years.
Every major auto company is investing billions in EVs and will have highly competitive EV line ups with scaled manufacturing in the not too distant future. Meanwhile, billions of dollars are being raised for dozens of of EV startups, from the US to China.
The auto industry has always been highly competitive and relatively low returning, and it's going to be even worse in the future owing to all this extra capital/investment/competition now entering the industry.
Far from being sexy, the EV start-up space is probably the single most unappealing place one could possibly invest in at present. It's going to be an absolute bloodbath of excess competition and almost every new entrant will likely eventually go bust (excluding TSLA).
Investors have completely lost their minds. I can understand people getting excited about a scalable software biz. But fucking auto manufacturing coys, heading into a period of massive excess capacity/overinvestment? The auto industry is *horrible* even *without* excess capacity.
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Marc Andreessen made an interesting observation in a podcast a while back - covid-induced remote schooling had resulted in parents overhearing what their kids were being taught (ie extremist hard-left CRT ideology), and were shocked. This may be contributing to election outcomes.
CRT is a fundamentally racist doctrine that teaches kids to judge people by their skin colour; feel victimized & resent "oppressor" races. It's exactly the type of thinking/ideology that has lead to recurring & devastating ethnic-based civil wars in Africa over the past century.
It also teaches kids exactly the wrong values they need to succeed in life: to feel powerless/oppressed and a victim; that all their problems in life are other peoples' fault (of a certain skin colour); that personal effort is futile because the system is rigged against them.
Yikes - it takes a fairly extraordinary degree of incompetence & epic failure of the business model for Zillow to expect to lose 5-7% on iBuying houses it bought to flip in a raging property bull market (1/2).
*AI cannot predict markets (& never will).
*iBuyers are competing with amateur property investors/flippers with skin in the game & who input unpriced labour (search, renovation, etc) & hence have lower costs. (2/3)
The iBuying biz model was always virtually guaranteed to blow up at some point due to asymmetry. In strong market you sell at small capped gain. In a down market, market goes no bid & you're stuck w inventory you can't sell. But they even managed to blow up in a bull market!
It's a putative truism that coal is "dirty". Yet for modern HELE (high efficiency low emissions) coal power plants, which capture/remove particulates, sulfur and NOx, practically the only thing being emitted is CO2 and water (the same as when you exhale). (thread).
Old coal gen fleets with dated tech are indeed dirty, but these should and are being steadily phased out. Burning coal for home cooking/heating - often done in poorer countries - is also polluting but is typically phased out as economic development occurs (eg China at present).
Meanwhile, carbon dioxide is actually great for the environment. It makes plants/trees and the ecosystems they support thrive. It is merely a minor inconvenience for humanity as a few degrees of warming may raise sea levels require expensive sea walls in certain locations.
About 6mths ago I bought an Oculus Rift. I was blown away - for about 3-4 days. Since then it's sat unused collecting dust.
I'm skeptical on Zuck's meta ambitions (though happy to see him try).
I think there are too many inherent limitations to what VR can do. It's gimmicky.
VR can replicate a handful of experiences fantastically well. But limitations on movement; anything tactile; inability to replicate G-forces (motion sickness inducing for many), recoil etc, inherently limit what the technology can accomplish, even in a more mature state.
In terms of social interactions etc, VR is competing with actual reality, and that will be difficult. The handful of advantages (ability to create/select interesting environs; no commute) will not counterweigh the many disadvantages vs. real world interactions, IMO.
This is a great article. I completely disagree with Greenwald. IMO superior performance comes not from deluding oneself into thinking they are better able to predict the future than others, but in better recognizing investors' inherent limitations in predicting the future.
Expertise and specialization are often a hindrance in this regard, leading to higher degrees of confidence in one's predictions without higher levels of accuracy. This has a tendency to lead investors hubris and to underestimate risk which can have devastating impacts on results.
Many of the most important determinates of future outcomes in markets are issues with inherent, irresolvable uncertainty that no amounts of specialized expertise will resolve, and/or future surprise developments that none of the experts previously expected or foresaw.
Markets are volatile at the moment because: 1) The probability of a forced liquidity withdrawal is rising (higher inflation), which if it occurs will lead to a devastating bear market. 2) For the timebeing, liquidity is still increasing (QE is injecting more liquidity daily).
Financial markets are driven primarily by liquidity, because they determine the aggregate buying and selling capacity of investors as a whole. Markets will have a tendency to rise in periods of excess liquidity, and a tendency to fall in periods of liquidity shortages.
This will happen regardless of expectations, the economy, whether people feel bullish or bearish, and what is happening with earnings revisions, etc. These are micro factors and they do not scale to the macro. At the macro level asset pricing depends on aggregate demand & supply.