VAL9000

Here's a guess on where Waymo is. First, some recent data points: - Waymo has entered into a number of partnerships with a lot of car manufacturers (incl. Nissan/Renault, Jaguar, Chrysler) - Waymo recently announced a manufacturing facility in Michigan - Safety drivers are still required for even the most forgiving environments - Drivers are clamoring for self-driving technology, to the point of giving their lives to act as beta testers With this in mind, my guess is that the self-driving utopia that Waymo envisions as its mission is a long way off, but Waymo's L4 capability is commercially viable today. The timeline for utopia is probably decades out, but here's what can be done today: - Integrate Waymo/Android/Google technology into passenger vehicles as an option. Likely Waymo will offer their technology with no expectation to profit on the hardware, instead opting for a service or other platform-driven revenue stream. - Deploy L4 tech to owners of this package, essentially making the passenger the safety driver a la Tesla Autopilot - Continuously upgrade L4 tech OTA until L5 autonomy is attained, also like Tesla, but with more advanced hardware, deeper data set and better AI This approach makes sense to me because: - Waymo can establish market share sooner if the outcome is that consumers cling to vehicle ownership - Waymo can begin collecting substantially more data on driving habits and enhanced/augmented maps - There is a ton of value in L4 tech for anybody who even commutes a little every day, and most auto manufacturers are in no position to capture that value As a consumer my feelings are: - I would easily pay $5k for the hardware and $25-50 per month if it meant I could text and drive most of the way to the office and back. - I wouldn't trust Tesla's approach to L4 automation as it stands today. I'd look at GM / Cruise closely but would still prefer Waymo. - I'd have a hard time accepting the hideous LIDAR and associated Waymo hardware package as it stands. As Waymo my main fear is that on day 1 my competitors are going to buy one of these cars and reverse engineer my hardware, which is probably much harder to do when every vehicle is owned by Waymo and loaded to the gills with vehicle tracking software. Harder... unless you hire away one of my product leaders and have them divulge the company's secrets (heh). I could be completely wrong here, but I do think there's a current market opportunity that meets Waymo's ambitions halfway while also accelerating its development. Personally I'd love for the opportunity to "vote with my wallet" on this one.

An alarming article covering Super Micro: https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies?srnd=businessweek-v2 Perhaps the next recession will be fomented by the painful and costly reorganization of the global technology manufacturing supply chain.

I think this comes down to priorities. $100k is a big number to graduate with and a huge burden. Yeah that sucks, but in 2008 there was a deluge of information in the media regarding personal finance. Everybody with any amount of debt knew what needed to be done. The financial crisis was not the author's fault, but the decision to spend 10 years effectively ignoring his debt is. Even after 1 year of making minimum payments you have to look at the result and prioritize a change... if financial security is truly important to you. Instead, this guy chose to borrow from his future at whatever rate he's paying. Now, 10 years later, he's decided that wasn't a good choice and decides to reinforce the millennial stereotype of shirking responsibility by blaming the "shadow banking system" for his financial situation. I understand the appeal of living in a cosmopolitan city, working as a journalist, covering the fashion industry, etc. but that lifestyle comes at a cost. The cost for him is $100k at a "disgracefully high interest rate". I think the author is willfully ignoring an important part of being an adult: personal finance. I'd say in 2008 his situation is mostly not his fault. In 2018 it's completely his fault. He had 10 years to adjust his lifestyle and chose not to.

This debate reminds me of packet switching vs circuit switching. I think that eventually packet switching (self driving trucks) will win in overall cost vs circuit switching (trains). But the economic model of self driving trucks will be very different from today's trucking model.

It includes all foreign property including securities. Whoever holds your investment accounts should be able to give you the bulk (in some cases you'll have to call them up and ask for the report). Holdings in your registered accounts do not count towards the 100k threshold.

Interesting. I agree that operating margin at Google is very carefully managed. However, his revenue growth assumptions seem overly conservative. GOOG dropping from reliable 20%+ growth y/o/y to 12.5% y/o/y overnight, then further to 2.75% after 5 years seems really unlikely. My own modeling assumes a reduction in growth rate of 1% per year over the next 15 years to stabilize at 5%. This would give a substantially higher valuation than $969. But nice to see that other than a differing view on input variables our two different models come up similar. My view is that Google is a reliable 15%/year compounder with a free option on another huge hit with Waymo. I've been adding below $1,000.

This thing is a train wreck. 4th CEO in 4 years. I believe there is value here, but there's also lots of room to destroy value over the next couple of years, as has been the recent trend at Mattel. What I see as opportunities: - COGS are 60% higher than their closest competitor (~39% vs ~62%). This is toy manufacturing we're talking about. How are COGS > 60%? Oh right they own their own factories. What is this, 2001? - Distribution. Not as valuable given migration to internet shopping, but it's still valuable. Toys R Us is going away but not really. - Brands. Again, not as valuable given how children are spending more time on electronics, but there is still value. Plus these brands are untapped (think Paw Patrol vs. Barbie, Cars vs. Hot Wheels). I'm sitting on the sidelines right now. I'm guessing the next earnings call will prompt another leg down in price. A big part of my decision to establish a position will be based on what the new CEO says. He's got a multimedia background, so if he's intent on unlocking the value of the brands through multimedia development I think it's probably the right play. But only if they can execute well on the previously announced cost cutting initiative.

Nice tip - thanks!

Oh, I don't think this is Uber's game to win. They have done a fantastic job of creating a centralized service for ride hailing which gives us great insight into the economics of the business. I don't believe Uber will develop the technology needed to create a very profitable business. This game will be won by whomever does. Probably Google and/or GM based on what I've read.

Here is the information you are looking for: https://www.wsj.com/graphics/uber-financials/ Of $11bn revenue $7.5bn goes to drivers and their cars. It's an enormous opportunity for both revenue growth and cost optimization. Self driving cars will cost less than a typical vehicle today and will be much better utilized.

I watched this video series on self-driving cars and their potential impact to our way of life. I thought it was really interesting. I share it in this thread because GOOG appears to be way out in front when it comes to the self-driving car race. https://a16z.com/2018/02/03/autonomy-ecosystem-frank-chen-summit/ My favourite part is the introduction where Frank Chen share McKinsey's view on cell phones in 1980: 900,000 people will use cell phones in the year 2000. The actual number was 109,000,000. Frank's point is that sometimes technology adoption occurs much, much faster than we expect. His belief is that self-driving cars are a likely next candidate for this rapid, radical change. I agree with him.

Don't argue with people online? Nonsense :D

A little (or a lot) of everything. At about 70% cash now. We'll see what happens, but I'm going to be sitting on the sidelines for a while.

Not to derail a thread that has taken an exciting turn into politics, but I really loved the first two podcasts in this series. I especially enjoyed the "a-ha" moments where you can tie back the current state of the business to that one insight. Almost like the business itself huddles around this core idea for warmth and nurturing. Can't wait to get to the rest. Also this politicized debate you are having sounds a lot like destiny vs. free will.

I think it's pretty easy to figure out - it's a discounted cashflow model that takes into account +contract profit, +vessel value at close of contracts, -debt, -preferreds, -overhead costs. The major unknown is - what's the value of the vessel at the close of contracts? This is overwhelmingly the variable that will impact your risk premium. I'm not going to do any of the above the math, because I'm pretty sure that the $6-8bn in vessels are going to be written-down substantially. I'd guess that they write down enough to wipe out the common (go private), then sell what they have to pay back the preferreds. Here is my view on why the vessels are going to tank in value: - Consolidation of SSW's customers is underway (see Alliances, see Japanese shipper merger). This is bad for price negotiation on contracts / resale of vessels to liners. - Global warming is opening up more efficient trade routes. This pushes shipping further into oversupply territory. - Technology is advancing at a faster rate, providing better alternatives to the existing fleet. 12 year contracts are great, but not so great if you exit the contract with an obsolete asset. If you want to gamble on the outcome, probably the best time to buy shares is shortly after the February dividend announcement, where they're likely to cut the dividend. Last time they did this, the stock capitulated (capsized?) and you could scoop up shares for $6.5.