June Recap
The Latest and Greatest Hits
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Good morning and happy last Monday of June!
This summer has kicked off with quite a bit of news or at least more than usual. Instead of offering up new information this week, I want to use this issue to highlight some of the big things that have occurred in a variety of categories. While this newsletter is focused on finance and investing, there is life outside of that shockingly (laughable but I do need to remind myself of this often).
Business
We Always Need Someone To Hate
Late last week the House approved proposals to help limit the power of “Big Tech”, often referred to as Google, Amazon, Apple, and Facebook. These companies have come under increased scrutiny under the current administration for unfair or monopolistic practices.
“The bills would make it illegal for large tech companies to unfairly elevate their own products and services on platforms they own, as with Google pushing YouTube videos…”
What’s funny is I don’t believe any of these companies are worried. None of the aforementioned companies is new to litigation. Apple is currently still awaiting a decision on the May trial over their supposed monopoly on the app store with Epic Games (creator of Fortnite).
While it’s easy to point fingers and pu pu these companies practices, it’s arguably what has brought them success in the first place.
• Google promoting its own Youtube videos is about finding what video the consumer is looking for. I’ve spent the last month watching videos on home repair - if they know one video will solve my problem based on my query, I want to be recommended that.
• Amazon selling its own products in the same ecosystem as third-party sellers aren’t anticompetitive, it’s capitalism. If someone can offer a competitive product at a better price, it’s up to the consumer where their dollar goes.
• Apple not allowing third-party applications like its competitor Android is part of what makes the Apple platform safe and secure and just work. There’s a reason people own iPhones - they don’t have problems.
• Facebook is being poked at for practices involving purchasing social companies that it views as competitors. There may be an argument here, but changing nature of what people are looking for in social content is quickly changing and arguably one platform will not be as popular as another.
Pictured: Jeff Bezos (Amazon, no longer CEO), Tim Cook (Apple), Sundar Pichai (Google), Mark Zuckerberg (Facebook)
What’s also funny is Satya Nadella, the CEO of Microsoft, is typically never mentioned in articles like these. May have something to do with the results of United States v. Microsoft Corporation back in 2001.
Just like where you spend your dollars, you’ll have to make a decision for yourself on who the real enemy is.
Full article: House Judiciary advances sweeping legislation to rein in and break up Big Tech
Finance
The Most Complex Deal This Decade
One of the most highly anticipated deals in the on-fire SPAC market was announced this month. Bill Ackman’s Pershing Square Tontine Holdings announced it would acquire 10% of the global music corporation, Universal Music Group, or UMG.
UMG is one of the premiere names in the music space, holding the rights to some of the most popular music listened to today and in history. Late last year, UMG purchased the rights to Bob Dylan’s music. In more modern times, the company holds names like Taylor Swift, The Weeknd, Justin Beiber, and Billie Eilish.
Being a shareholder in Pershing Square Tontine Holdings, I’ve been eager to learn more about the music industry and this deal. What I’ve learned is that the music industry is very complex and has many reasons why the traditional label model hasn’t been disrupted.
Sitting atop a complicated industry, Bill Ackman has put together one of the most complex deals I’ve ever seen. The shareholders of PSTH are actually able to get access to the UMG ownership while simultaneously owning a piece of another deal Ackman is supposedly in works on AND the rights to participate in a future deal.
Thankfully, the finance industry is not shy of smart people. I’m a recent subscriber to Andrew Walker of Rangely Capital’s Substack, who has put together a masterpiece on the music industry, valuing the UMG deal, and what the rights to each piece look like. I believe this deal poses an interesting opportunity for event investors and those willing to hold for the next 12-18 months.
Full article: Some final pre-deal $PSTH / UMG thoughts
Self Improvement
Maybe The Screens Aren’t So Bad
I saw a tweet the other day that talked about growing up on the internet and how it’s difficult to imagine life without it. I spent the bulk of my childhood using the internet to play games so I felt that.
The wild innovation of DSL (dial-up was just hurtful) granted my household access to playing games on the computer as well as the Xbox when that came out. I never really understood my love of games until much later. Playing video games taught me a lot about camaraderie and problem-solving in a variety of forms.
If you can handle the stress of this screen, how could you not be a better person because of it?
While viewed primarily negatively at the time, the widespread acceptance of games/gaming even as a professional career in streaming has given way to some interesting theses. Aaron Edelheit has one of these takes.
“Video games are uniquely able to help you practice decision making and strategic thinking and most importantly with little or no cost of failure. They encourage you to try and repeat different strategies with little or no cost and with the ability to try and try again.”
You can check out his thoughts on the importance of video games to building successful careers here.
Full Article: Playing Video Games Can Help You Level Up in Business and Investing
Medical
A CRISPR Breakthrough Of The Not Toast Variety
Just this weekend, an incredible breakthrough for gene editing took place. Intellia Therapeutics and Regeneron’s gene-editing collaboration showed positive signs in its phase 1 trials of NTLA-2001. What makes this particularly eventful is it was done using CRISPR technology.
From Intellia’s Chief Medical Officer, David Lebwohl:
Lebwohl said the therapy itself could be a great option for patients with amyloidosis, but the results are bigger than that. This is the first time gene editing has been proven to work in humans, which “opens up a whole new area of therapies for patients that wasn't there.”
Naturally on the news, the biotech sector is lighting up the premarket with Intellia (NTLA) +58%, Regeneron (REGN) +2%, and Crispr Therapeutics (CRSP) +13%.
There aren’t many articles out on this yet, but if you’re up to snuff on your technical terms, you can check out this article.
Full Article: With first-in-human trial results, Intellia shows the world that gene editing has arrived
Military
So, What Are We Doing Exactly?
Last month, the Biden administration announced it would have all American troops out of Afghanistan by September 11th in spite of suggestions given by military advisors. Presence in the Middle East has been a widely debated subject ever since the Bush administration and sounds as if it’s coming to an end. Maybe.
The exit of American troops from Afghanistan has been assisted by the USS Ronald Reagan who arrived in the region in late May. The definition of assisted might carry different meanings here, however.
Sunday, President Biden authorized airstrikes in Syria and Iraq.
“The United States took necessary, appropriate, and deliberate action designed to limit the risk of escalation—but also to send a clear and unambiguous deterrent message,” Pentagon spokesman John Kirby said.
While the withdrawal of the troops from Afghanistan seems like a victory to some, it in no way shape or form is significant of lower tensions in the Middle East. The airstrike authorized Sunday is actually the second one by President Biden since taking office in January.
The mixed messages about troop withdrawal and continuing airstrikes highlight the fact that we will continue to be involved in the area for some time and perhaps rightfully so. We’ve spent the last twenty years waging a war that is about as close to unwinnable as possible - not due to lack of effort, but just due to the nature of warfare our troops are fighting.
It’s my opinion we will continue to stay involved in the area just more autonomously. The advent of drones has provided the ability to engage with hostile forces while not putting American lives at risk. As drone technology improves, I believe we will only see more and more work from unmanned vehicles in a variety of capacities.
Full article: Pentagon Accelerates Withdrawal From Afghanistan
Beyond
Space: Maybe Not The Final, But The Next Frontier
As if being the world’s richest person wasn’t enough, Jeff Bezos announced that he’s going to space. He will participate in the first crewed flight to space from his second child, Blue Origin, a space company looking to rival Elon Musk’s SpaceX. He will be accompanied by a crew, his brother, and a 28 million dollar auction winner.
While this sounds like the beginning of a tragic story, it may actually be the biggest vote of confidence, ever. This decision likely needed approval from a variety of sources including Amazon’s board. Participating in the first flight is a true display of confidence in what he’s built at Blue Origin.
Blue Origin is looking to take a piece of the pie SpaceX has been eating on for some time. SpaceX won the NASA contract to build the lunar lander as part of a collective mission to bring people back to the moon by 2024. Blue Origin is contesting the decision and is out for blood in this latest showcase.
"I'm interested in space because I'm passionate about it," Bezos, who also made a cameo in 2016's Star Trek: Beyond," said during an interview with Mathias Döpfner, the CEO of Axel Springer. "I've been studying it and thinking about it since I was a five year old boy — but that is not why I'm pursuing this work. I'm pursuing this work because I believe if we don't, we will eventually end up with a civilization of stasis, which I find very demoralizing."
How poetic.
Full article: Jeff Bezos is going to space on first crewed flight of rocket
Thanks for reading. Talk next week.
~Brock