The weekend is here! Pour yourself a mug of Danish blend coffee, grab a seat on the sofa, and get ready for our longer form weekend reads:
• Fraud, Short Sellers & Media Frauds and bad businesses usually aren’t exposed until markets fall and investors became more skeptical and conservative. When the returns are good and money is being made, there is less incentive for investors to scrutinize their holdings. If returns go south, and investors lose money, however, investors begin investigating their positions more thoroughly. The infamous Worldcom fiasco after the Dot Com crash, and Bernie Madoff’s ponzi scheme blowing up amid the Great Financial Crisis are prime examples. (Investor Amnesia)
• The Crisis of Venture Capital: Fixing America’s Broken Start-Up System Despite all the attention and investment that Silicon Valley’s recent start-ups have received, they have done little but lose money: Uber, Lyft, WeWork, Pinterest, and Snapchat have consistently failed to turn profits, with Uber’s cumulative losses exceeding $25 billion. Even more notorious are bankrupt and discredited start-ups such as Theranos, Luckin Coffee, and Wirecard, which were plagued with management failures, technical problems, or even outright fraud that auditors failed to notice. (American Affairs)
• McFamily Feud: Scandal, lawsuits, and cultural upheaval at McDonald’s During his four-and-a-half-year tenure, Easterbrook grew McDonald’s market cap by over $50 billion—more than any restaurant CEO has ever added during a similar time span. “He did what the board asked him to do, and Wall Street rewarded him for it. But he did it at the expense of the McFamily.” (Fortune)
• QuantumScape says its technology is ready to move from the lab to VW’s dealerships. But this secretive startup is very familiar with failure. The solid electrolyte QuantumScape found needed to meet several “and” criteria: It had to allow lithium ions to flow and stop the dendrites; it also had to be flexible enough that it wouldn’t break inside a battery and be easy enough to produce at scale. If you want the EV battery to be charged in 15 minutes, there better be headroom for the material to handle even faster charging without failure. (Green)
• Fusion & Magic: Technology has created marvels that become everyday. Could that save us soon? Occasionally, a singular technological leap changes what we expect from the world and the ability of human ingenuity to shape it. The iron horse of the railroad bent the geopolitics of the nineteenth century, just as the internal combustion engine, and the fossil fuel it requires, did the twentieth. All defied what was then thought possible. The iterative magic of technology requires its inner workings to be revealed, exposed, and understood—in order to be refined, built upon, and made more marvelous and consequential. (Lapham’s Quarterly)
• How to Survive a Killer Asteroid The impact that wiped out the dinosaurs would probably have killed you too—unless you were in the exact right place and had made the exact right plans. (Wired)
• What Is Hospitality? The Current Answer Doesn’t Work. The host-guest relationship puts all the onus on the server, particularly during the pandemic, and points to the dysfunction at the heart of the business. (New York Times)
• Out of thin air: the mystery of the man who fell from the sky In 2019, the body of a man fell from a passenger plane into a garden in south London. Who was he? (The Guardian)
• The rise and fall of Canary Wharf: London’s iconic financial district is trying to reinvent itself as a place to work and play after the pandemic. But the numbers don’t add up (Wired)
• Coach, broadcaster, esports icon: Inside the legacy of John Madden Right after the EA team met Madden for the first time, they all went back to their train cars in disbelief at Madden’s prolific deployment of swear words. “I’m not exaggerating, I think every third word out of his mouth is an F-bomb,” Hawkins says. “He is incredibly profane. That’s one of the signatures of how smart John is. To have the self-discipline to never do that on the air, it’s remarkable. He knows how to switch over to a completely different vocabulary.” (ESPN)
Be sure to check out our Masters in Business interview this weekend with Rob Arnott, founder and chairman of Research Affiliates. The firm created & patented a methodology for basing indexes on fundamental metrics instead of market cap weighting, and its strategies runs over $160 billion in assets. Arnott is the author of over 100 academic papers, and is the co-author of the book “The Fundamental Index: A Better Way to Invest.”
Americans overwhelmingly say marijuana should be legal for recreational or medical use
Source: Pew Research Center
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