Books
The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend — A good friend recommended this book. Another friend has worked at Bridgewater for years. So, with that preamble, I don’t know what to say about the book itself. The author is candid on literally the first page about his disdain for the subject. But it would defy reason to accuse the author of writing a baseless hit piece that is completely fabricated, and even if there are some errors or points of disagreement (as there always are in a book like this), the sheer volume of eye-popping events is overwhelming. I had no informed opinion on the subject before reading the book (I did try to read “Principles” years ago, but I put it down after a few chapters) and I came away from this book shrugging my shoulders and shaking my head.
Articles
Nothing but Backboard: Why Some Korean Basketball Players Love the Bank Shot — This makes a ton of sense, and the reasons the practice hasn’t been more widely adopted seem almost entire psychological/irrational.
The Fateful Nineties — From an online review that’s a better summary than I could write: “Most people see the 1990s as a golden moment for America — we’d won the Cold War, we enjoyed solid economic growth, the federal government sometimes ran surpluses, crime rates fell, tech took off. [But the author sees it as] one in which sensible people fell for a series of self-destructive illusions: Globalization means nation-states don’t matter. Cyberspace means the material world is less important. Capitalism can run on its own without a countervailing system of moral values. Elite technocrats can manage the world better than regular people. The world will be a better place if we cancel people for their linguistic infractions. ‘America’s discovery of world dominance might turn out in the 21st century to be what Spain’s discovery of gold had been in the 16th — a source of destabilization and decline disguised as a windfall.’”
He Hunts Sloppy Scientists. He’s Finding Lots of Prey. — As someone who circles (in pen, on physical paper) typos and mathematical mistakes in the newspaper, financial documents, etc., this is my kind of guy. He is also doing a very legit service for the world at large. “[I]f I spent a couple of hours reading papers, I’d probably write four or five comments about errors in scientific papers. It’s not hard to find these problems, and it’s not hard to find them at any institution. They’re all out there to find, if anyone wants to read the scientific literature.” [What motivates you to spend the time to do it?] “I’m not an anti-vaxxer, I’m not a crank conspiracist or anything like that. I’m a scientist myself, and I care about getting the science right…Science is hard, but labeling images correctly isn’t the hard part. We could probably do without some of the silly errors and apparent fraud.”
“It’s important to remember that Dana-Farber researchers publish a lot of papers. But it’s still a lot of errors, and they’ve happened over a long period of time. This tells me that for a long time people haven’t paid close enough attention to getting the basics right. How many sloppy errors are we comfortable with top institutions making? It’s probably not many. I think most people expect that Harvard scientists aren’t doing copy-and-paste mistakes often.”
Facts and Figures
34% — “Iowa loses 34.2 percent of its college graduates, worse than 40 of the 50 states, just below North Dakota, which loses 31.6 percent. Illinois, by contrast, gains 20 percent more college graduates than it produces. Minnesota has about 8 percent more than it produces.” The big losers of brain drain are “small, rural states — Vermont, West Virginia, New Hampshire” along with other surprises like Virginia (-42%), Indiana (-30%), and Connecticut (-30%). The big winners in positive net-migration of college graduates were all cities/states with large, dynamic urban areas: Washington D.C., New York (NYC), California, Illinois (Chicago), Georgia (Atlanta), Texas, Minnesota (MSP), Colorado (Denver), and Washington (Seattle).
Zero — the (presumed) value of the equity of Bird, the electric scooter company, after it filed for bankruptcy protection in December 2023.
Bird was previously the fastest-ever company to reach a valuation of $1 billion. The company was founded in 2017, and by March 2018 it was valued at $400 million. Just two months later it raised series C funding led by Sequoia Capital at a $1 billion valuation. By 2019, the valuation was $2.5 billion. And of course it was a 2021 SPAC IPO, going public at an insane price despite having burned >$150 million in 2020. The company never even remotely approached profitability and consumed hundreds of millions of dollars of capital in its short life. It also admitted to overstating its revenues. The CEO bought a mansion whose value vastly exceed the entire value of his holding in Bird just months after closing. And among Bird’s creditors in bankruptcy court are more than 300 municipalities and government entities. A disaster for the ages…
Also zero — the value of Convoy, a digital freight broker, after is shut down in October 2023, not long after it was valued at $3.8 billion in 2022.
Almost zero — the value of 23andme, the DNA-testing company that was once valued at more than $6 billion after a 2021 IPO, a year in which it posted brief “improvement” in operating margin to -76% from -85% in 2020.
$14 billion — the amount of money lost by Softbank on its investment in WeWork, including more than $1 billion it paid to the founder and former CEO of the company who is now trying to buy back control of WeWork from Softbank and other creditors in bankruptcy court. And yes, of course, WeWork’s now worthless equity was valued at more than $47 billion just a few years ago. (This list of post-mortems on crazy valuations could get really long so I’ll stop here, but I’ll die on the hill that 2021 was the most speculative year in my lifetime.)
2.1 million — the decline in China’s population in 2023, as 11 million deaths exceeded nine million births.
12.46 — Inches of rain recorded at an unofficial rain gauge at UCLA during the recent storms that deluged the area. That is 1.1 inches *more* than a “thousand year” storm (i.e., a storm expected to occur once every 1,000 years; or a storm with a probability of <0.1% of occurring in a given year.) Again, not an official NWS reading, but several other gauges in the area and radar data corroborated the result.
25% — the reduction in homicides in Philadelphia in 2023 as compared to its peak of 562 in 2021. Statistics are not yet final for 2023, but using FBI data it’s clear that almost all kinds of crime plunged last year.
Among nine categories of violent crimes and property crimes, eight declined year-over-year; only motor vehicle theft increased.
Chicago saw homicides fall by 13%. NYC’s fell by 11%. Detroit had the fewest murders since 1966 (albeit with a far smaller population now). Washington D.C. is the lone outlier (in a negative sense) among major cities, hitting a two-decade high in murders and recording more than 900 carjackings.
$374 billion — total value of real estate sold in the U.S. in 2023, down 51% compared to 2022 and 14% lower than 2020.
500 basis points — the erroneous figure cited by Lyft in its own press releasee touting guidance (a self-defeating proposition to begin with) in Adjusted Ebitda margin expansion (a mostly useless metric in any case). The correct number was supposed to be 50 basis points, and the stock skyrocketed more than 60% on the surprise.
The typo-laden press release was released at 4:06 PM EST and the earnings call began at 4:30; management did not notice the error until an analyst asked about in the Q&A. A corrected press release came out at 5:51. Meanwhile, 45 million shares (worth more than $700 million) traded during this time, including 10-20 million shares that traded at prices that were clearly inflated by the typo.
#168 to #4 — Auburn University’s change in rank among the most-expensive public colleges and universities in America from 2008-09 to 2021-22. Auburn’s annual budget went from under $750 million to over $1.5 billion during the same span, and accordingly the school raised its “net price” — the amount charged to in-state freshmen after all grants and scholarship — by 60% in inflation-adjusted dollars. According to the analysis linked above, the money went almost entirely to “administrative salaries, buildings and, no surprise, sports.”
“Today, the cheapest dorm on [Auburn’s] campus costs $6,700 for two semesters, nearly double the cheapest option in 2001-02, accounting for inflation. A bed on campus can now cost as much as $13,000 for the academic year, up from a maximum of about $4,700 in 2001-02. Auburn students have also faced rising dining costs, and plans can cost up to $5,352 a year. Meal plans, once optional, are mandatory even for those living off campus.”
“Arizona State University students will pay more than $9,600 this year to live in a shared bedroom at Manzanita Hall, a 15-story dorm on the edge of campus…About a decade ago, a private developer took over Manzanita and gave it a $50 million refresh…Now, after multiple increases, ASU students pay about 80% more than what Sun Devils paid to live in the building about 20 years ago, adjusted for inflation.