Common People

w.172 | Moneyball-for-Everything, Inflation Swindles, VC rating system, AI Report

Dear Friends,

Hope you had a good week despite news of layoffs, the upcoming election uncertainty, market movement, and everything else that transpired.

I was looking to take my mind off the present and started watching the new Netflix film All Quiet on the Western Front. Not a good strategy. It’s a perfectly shot, beautifully acted, and has the most ominous soundtrack. But it is pure trauma. Be warned. This is ten times more intense than Saving Private Ryan. This a good reminder that the losers (and active participants) in war are always the common people.

Today's Contents:

• Good Reads: Sensible Investing

• Tweets I Liked

• Song of the Week: Common People

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Good Reads: Sensible Investing

What Moneyball-for-Everything Has Done to American Culture by Derek Thompson for The Atlantic.

“When universal smarts lead to universal strategies, it can lead to a more homogenous product.”

“Correctly observing that audiences responded predictably to familiar intellectual property, studios invested in a strategy that has squeezed original IP from the top-10 charts. Blockbusters are kinda boring now, not because Hollywood is stupid, but because it got so smart.”

Investing in Influence Report from Sparkline Capital.

TL/DR: Companies invest billions of dollars in political influence through lobbying, campaign contributions, and other means. However, as with other intangible assets, political capital tends to be overlooked by the market. We show how investors can earn excess returns buying undervalued political capital.

Notable: The chart below shows the increase of citing regulatory risk in company filings.

How Inflation Swindles The Equity Investor by Warren Buffett as published in Fortune in 1977.

Revere Created a Rating System for the Venture Capital Industry. Here is the sample report. It’s a helpful rubric!

State of AI Report and AI: Startup vs Incumbent Value as found in STROTW

Letters to Investors: Slow Ventures on what they are excited about, less excited about, and weren't excited about last year and still aren't.

PitchBook Universities: Top 100 Colleges Ranked by Startup Founders. Pasted the top ten for your perusal, including four public schools - and one that also happens to have a top ten college football team. Since my grandparents are proud alums, go blue!

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Tweets I Liked

Predicting the future is impossible even for people who decide it.

Cullen Roche @cullenroche

Here are the Fed's projections from last December: 2022 Core PCE: 2.7% (it's 5.2%). 2022 Fed Funds Rate: 0.9% (it's 4%) Remember - They have no idea where any of this is going.

Erm. Yes.

Pekwat @pekwat

This has little to do with the "economy" companies 👏 must 👏 generate 👏 FCF 👏 net 👏 of👏 SBC👏 and 👏 grow 👏 FCF 👏 per👏 share

Mike Solana @micsolana

layoffs at coinbase, robinhood, lyft, meta, stripe (!!) — good people at good companies. really alarming macro story unfolding, somewhat drown out in the twitter drama. anyone even remotely keyed into the economy is bracing for a long winter.

Here is the full Elliott Management letter. Here is a list on Reddit of Q3 2022 Letters and Reports.

Michael Savage @michaelsavage

Slightly worrying investors letter from huge hedge fund Elliott Management. Economic conditions have "made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period”. “Investors should not assume they have ‘seen everything’”. Oh dear.

“Pain to be administered hasn’t really started.”

Semil @semil

"Money on sideline stranded in VC firms" argument doesn't hold up: -some firms may return some portion of $ to resize -most firms slowed down pacing, many have been inactive for Series B+ all year -consensus among VCs I know is pain to be administered hasn't really started yet

Eric Paley @epaley

"Hope for dry powder, but until it materializes, try harder to make the most with the resources in your control." Any founder that is thinking of fundraising in 2023 should read this post by @micahjay1. https://t.co/qTey8JZGmt

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Selfie and Song of the Week: Common People

Music video here.

I found this song in Ben Dietz’s excellent SIC newsletter a few weeks back. I thought it was appropriate given the upcoming elections in the US on Tuesday where the ‘common people’ go to the polls, and we’ll see the result of democracy.

The song is clever and the video is fun. Enjoy.

“Common People” by Pulp

Sing along with the common people
Sing along and it might just get you through
Laugh along with the common people
Laugh along, even though they're, they're laughing at you
And the stupid things that you do
Because you think that poor is cool

Selfie of the week: These beasts are the thugs of the avian family. 

Proceed with extreme caution. No sudden movements. Do not make eye contact. 

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Thanks for reading, friends. Please always be in touch.

As always,
Katelyn