Weak Signals
A weekly newsletter about the small signals that usually get lost in the noise
‘Read is like breathing in, writing is like breathing out’
Welcome back to Weak Signals.
As long time readers know, Weak Signals is a weekly (ish) newsletter where I share small conjectures on how the news of today will reverberate and influence the world of tomorrow.
I write about what I’m interested in; the markets, real estate, politics, digital eCommerce, the zeitgeist as I see it, and then I share my predictions about what’s to come.
Weak signals are the small signals that usually get lost in the noise.
Weak signals are ideas about the ‘and then what.’
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As the top quote suggests, this week I am coming up for some air.
I invite you to do so with me.
Below you’ll find a collection of the best things I read this week. Enjoy.
I discovered Eugene Wei about two years ago when he popped into my RSS feed writing about Amazon’s Invisible Asymptotes. If you prefer macro outlooks or like to think thematically, this article remains my favorite frame to understand big tech. Most of what I share in this newsletter is timely, this is timeless.
A lot of the attention in the market’s run up post COVID has been paid to FAANG’s stocks and big tech. They weren’t the only companies posting incredible returns, however. Nascent ad tech stocks have had an incredible run of their own. Pinterest, (+184%), Twitter (+57%) Snapchat (+164%), The Trade Desk (+138%), and Roku (+67%) are all up over 50% or more YTD. Operating in a digital duopoly in an industry riff by confusion, competition and consolidation, these companies weren’t thought to pose growth. They have, however, benefitting from a combination of low market expectations, consumer attention shifts and a desire by marketers to diversify budgets away from Facebook.
Whether these companies hold these gains remain to be seen, but if you’re going to add one to your portfolio, Packy McCormick makes a really good case for Snapchat in - The Next Great Platform Company Everyone Forgot About. I use to hate buying stocks that had already run up, but as Nasem Taleb says, “you make money buying the overpriced and selling when extraoverpriced. Avoid the “affordable” crap.
Bryne Hobert’s The Difference aggregation newsletter is normally behind a paywall, but every once in a while, he’s give non-subscribers a taste. This week’s its ‘The WeWork Arc, a review of ‘Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork’, and it does not disappoint.
How can you not love an article that references Napoleon, Veblen Goods, an alternative theory of unions and smoking in the office inside six paragraphs?
An interesting, albeit sobering report in the Wall Street Journal on Why Social Media Is So Good at Polarizing Us. There’s a lot of nuance here but the main thrust is - what was thought to be the anecdote to social media ‘echo chambers’ – “show people more content from those they disagree with”, actually compounds the problem. What gets pushed to you is typically the most exaggerated form of the argument you disagreed with to start. We need better algorithms. Simultaneously, we all need to spend less time online.
David Brooks NY Times Op-Ed ‘How to Actually Make America Great’ reminded me of Niall Ferguson’s 2012 The Great Degeneration. In ‘TGD’, Ferguson made the argument that West is in decline because it has abandoned its institutional inheritance and allowed its pillars; representative government, the free market, the rule of law and civil society, to wash away.
Brooks’ Op-ed makes a similar claim on a stagnating West and America proper. But, he more specifically points to the change in mind-set in the American experience. It has shifted from solidarity to individualism. This individualist fallacy, a laissez faire approach to the common good, has failed, and it’s resulted in fifty years in social decay.
While they share the diagnosis though, a culture in decline, Brook’s cure is a bit more hopeful than I remember Ferguson’s. Worth a read and worth remembering.
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