Longreads + Open Thread
Coca-Cola, Citi, Realignment, Vaccines, LIDAR
The Universal Drink is a great cultural time capsule. It's a story about Coca-Cola written in 1959, so it's really a story about America's unquestioned hegemony over most of the world. This article has a very high density of quotable anecdotes per paragraph, especially when it comes to different political factions making wild claims about Coca-Cola.
Net Interest has a good history of Citi. How many companies can report a similar stock price performance since the Depression? It's hard to underperform for that long without going to zero, but one way to do so is to have investors who can offer dilutive financing after a big loss.
David Shorr on political realignment, especially around education. Very much worth reading to understand how US politics are changing. One thing this article helps with is to clarify the New York Times' shift to having a more partisan audience (its audience is almost as Democratic as Fox's is Republican). Part of that represents a change in the Times, but part of it was a change in their audience.
The Economist profiles India's Serum Institute, which expects to make almost half of the world's Covid vaccine supply.
Nilay Patel of The Verge has a good interview with LIDAR company Luminar’s Austin Russell. One interesting category of research is the set of projects with uncertain costs, uncertain timing, and high impact. Governments and large companies are able to underwrite the costs of these projects for long periods, and it's often harder to fund them as independent efforts. There has been a promising shift, in prestige if not dollars, towards hard tech startups that may take years to have a working prototype. Luminar is certainly an example.
Lights Out is a history of General Electric from peak to trough, so roughly from the late Jack Welch era to the present. One of the surprising things about GE is that the bad news kept coming; even after some of the company's 90s excesses had been recognized and corrected, GE still had long-tail liabilities on the books. But one way to turn this around is to make the argument Michael Milken used to make about high-yield bonds: once a company is big enough, it can survive an incredible run of scandals, strategic missteps, and industry shifts without disappearing.
IBM: Colossus in Transition is a history of IBM from founding to a bit past its peak. The book is a good look at just how central IBM was to the early computer industry, and to corporate America more generally. One thing the book helps explain is why investors had a bias in favor of suits over technical cofounders. The world's most valuable tech company had a suit-focused management model, and survived the defection of key technical employees.
Progress and Poverty is an interesting case study in first-principles thinking. It makes a coherent argument that rent is a special category of income, and that real estate speculation is a particularly harmful kind of economic activity—but it has some omissions. There are land-like assets that exist on a continuum between real estate and capital, and there are certainly ways to prosocially increase the value of land. (Both Howard Hughes and Steve Wynn did a good job of raising Las Vegas property values; they didn't just passively benefit from an exogenous change in the value of the properties they owned.)
Housing has been one of the stronger sectors in the US economy during Covid. The case against it in 2021 is that housing is cyclical and rates-sensitive; the case for housing is that the US has been under-investing in new homes since the financial crisis. Who's right?
This week I've written a lot about "compounders," using the somewhat idiosyncratic definition that it's a stock where the bull thesis doesn't have to change much as it keeps going up. What are some obscure current examples of compounders?