We continued our TMIDITW series in the Bay Area this month. We were hosted graciously at the home of one of the best distressed debt investors of our time. The Atherton mansion was spacious and elegant with ornate sculptures placed in the gardens. The walls were adorned with expensive art. The food had been meticulously thought out and the service was gentle and precise—better than at most Michelin-starred restaurants, honestly. The evening was perfectly curated, intimate and fun. The host reminded us of the feeling of hospitality.
As is customary at our dinners, each participant was requested to bring a chart to discuss with the diverse group. This is a summary of the charts and conversation.
Chart 1: The Retail Apocalypse Grocery chains are most at risk as the grocery delivery (and pickup) service now covers 80 percent of US households, up from 35 percent in 2017.
Chart 2: Capitalization of Labor Human capital is the largest asset in the world that is essentially unsecuritized.
Chart 3: The Network Effect Slack is the best example of the Reed’s law in action.
Chart 4: The Law of Unintended Consequences The importance of a productivity rebound cannot be overstated given diminishing slack in the economy.
Chart 5: US rates are going even lower The low level of nominal bond yields provides an important offset to the richness of earnings multiples.
Chart 6: Are Internet Valuations Inflated? “Just stay long.”
Chart 7: The Investment Zeitgeist The software sector is dangerously on the cusp of a precipitous fall.
Chart 8: The Major Challenge of our Time Consumer prices rose in 2019 at the fastest pace in eight years.
Chart 9: Got Bitcoin? Bitcoin’s total market cap could attain a trillion-dollar valuation.
Chart 10: What’s your metric? Essentialism is a powerful antidote to the craziness that plagues our lives