1: Why I'm Writing This, Building an Empire, DK Value Tells You to Be Greedy, The Erosion of Deep Literacy, Rhododendrons Are Middle-Class
« What made me be a writer was that I was a passionate reader.»
Taking the plunge !
The day has pockets — you can always find time to read. Reading set standards. […] So that to be part of literature, to be even the humblest, lowest member of the great multitude of people who actually dare to put words on paper and publish them, seemed to me the most glorious thing one could do.
— Susan Sontag (Source)
I have been contemplating writing regularly for a few years, even started journalling at least 5 times (that I can remember) but could not stick to it for more than a few days. May this public attempt be the successful one!
In fact, I have grown convinced that there are good reasons why I should actually write online, and you should too. A few weeks ago, I discovered the Alexey Guzey’s personal site and spent hours getting to know him through his collection of content. I must admit that his article named “Why You Should Start a Blog Right Now” helped me clear my last objections.
To name a few :
“I don’t know what to write about”
I looked over all of my writing and determined that it all originated from one of the following:
I repeatedly gave the same advice to my friends
I wanted to share my personal experiences and thought other people will find it useful
I disagreed with people, left comments online, and had some ideas about stuff that I read
I shared thoughts and ideas with friends via conversations, IM, and email and realized they might be interesting to other people
I investigated things
I privately collected stuff I find fascinating and figured other people may also find it interesting
I wanted to create art
Most likely you do at least some of the things I described above. And that means you probably have something to write about.
— Alexey Guzey, Why You Should Start a Blog Right Now
Is that you in any of the situations above ? Congratulations, you have found a reason to write !
Almost any discussion that you have, opinions that you form, story that you hear… can form the raw material of a longer-form article or blog post. As Susan Sontag put it elegantly :
A writer is someone who pays attention to the world — a writer is a professional observer.
— Susan Sontag
“But I don’t have anything original to say and I would be just repeating things said elsewhere on the internet!”
Everything that needs to be said has already been said. But since no one was listening, everything must be said again.
— André Gide
It’s not even that no one actually wanted to listen, it’s actually that it’s impossible to listen to everything… I realized this when I started to actively seek content related to my different interests. It can quickly become overwhelming as every piece of content or author opens new doors.
Even if you come across the same content regularly, there will always be a new way to revisit it.
The attempt to communicate everything - to exhaust everything - is always a sympathetic effort, however doomed to fail.
— George Perec, Attempt at Exhausting a Place in Paris (Translator’s afterword p.50)
“I don’t have enough knowledge to be a good writer”
This is the way thinking and everything else in the world works. You can read all the self-help books in the world. You can read all the blog posts in the world. It’s not enough. Good thinking doesn’t happen by passive osmosis of other people’s good thinking. You have to actually write essays and journals to debug yourself and your ideas
— Alexey Guzey, Why You Should Start a Blog Right Now
My desire to write paradoxically came from my own perceived difficulty at producing truly original thoughts. I was increasingly frustrated by the imbalance of other people’s good thinking vs. “my own” good thinking that was stored inside my brain.
Something was off, as no matter the amount of “good stuff” I read, I still felt as helpless when it came to summarizing my own world view in a cohesive manner… Only to realize that it was a sort of “I know that I know nothing” epiphany.
In fact, through this description, I quality as a “common, not particularly well-educated person” according to Ortega y Gasset’s Revolt of the Masses, a man who has ideas in his head but did not produce them.
Well!
At least, realizing this felt quite liberating, and also reignited my desire to learn a new craft.
In Short, everyone can benefit from writing and you should consider it seriously as well ┐( ˘_˘ )┌
Investing & Business
Is Pitney Bowes (PBI) A Smart Long-Term Buy ?
"Pitney Bowes, Inc. embodies several characteristics that seem to show up in many of our investments. Overlooked. Unloved. Misunderstood. Sometimes all three. Together, these forces have pushed PBI shares lower for years. Of course, it is not too difficult to understand how this came to be the case. The company’s glory days back when it was lauded in Jim Collins’ Good to Great for leasing mail meters and offering presort mail services have long since passed. Though these businesses continue to generate nice cash flows, mailing revenues have steadily declined for years. Consolidated financials are not pretty, with earnings declining consistently for much of the past decade. All this, for a 100-year-old company that – not so affectionately these days – goes by the moniker “the mail company.”
Pitney Bowes is an interesting case study that I will most likely flesh out in a separate post on my research blog in the coming weeks. It is a prime example of a successful transformation of a century-year cargo into something more relevant today. The company had an impressive moat through the 20th century by being at the front of mailing technologies (mail meters, sorting machines…) generating substantial cash flows thanks to a de facto quasi-monopoly given the barriers to entry.
It has suffered structurally since the 2000s because of the secular decline of mail volumes and the shift to electronic mail.
Still, PBI has not been totally passive and is close to achieving what I deem as a successful transformation which had gone mostly unnoticed until very recently.
But buried within those consolidated financials that paint the picture of a shrinking company, Pitney Bowes has been building a very promising e-commerce business. It has been a long time coming, but after first getting into the business eight years ago with their acquisition of Newgistics, the shipping business appears poised to thrive.
[…]
Pitney Bowes has been agressively building its Ecommerce platform through Domestic Delivery Services (proprietary solutions for handling returns and a dense distribution network) and Cross-Border Solutions for international sellers (parcel tracking, multi-currency pricing, payment gateways…). Because of the very opaque reporting segments, though, progress made in this segment has gone mostly ignored.
The Global Ecommerce business is promising. It serves a capacity-constrained segment of the economy that enjoys natural tailwinds from a package delivery market that has been growing steadily at a midteens annual rate for years.
[…]
Before the pandemic, there were early signs of success. The Global Ecommerce segment had grown to well over $1B in sales, or nearly 40% of the whole company. But like a lot of promising young businesses, it was subscale and unprofitable. […] Volumes are now near levels the company had previously suggested operations could become profitable.
The uptick in parcel volume has been no less than a game-changer for PBI. Per the management in the Q2 2020 call :
‘If you think about what the [e-commerce] market was pre-COVID, it was a 10-15% linear increase. It increased 3-4x in the Q2. We expect to continue to see margins improvement as we go through the balance of the year. 80% of the workforce was new in Q2, so a lot of room for operational improvement. We've invested ahead of demand with the 2 new flagship sites opened in Q4, which enabled us to handle this dramatic surge in volumes, which doubled yoy”
— Q2 2020 Call
They were quite lucky to have invested ahead of the pandemic, and are able to ramp up capacity utilization quickly. As mentioned, the supply chain has been experiencing difficulties in handling this sudden but long-lasting surge of volumes, which also helped boost pricing powers for service providers.
The negotiations with customers are different in the sense that there's
only a certain amount of capacity in the industry, and the industry is at that capacity. So it does provide pricing opportunity.
In short, a very interesting case study on strategy, and potential to qualify as a compounder even after recent share price appreciation.
I plan on fleshing out a full-length analysis of PBI with financial projections and might reference it later if I find a compelling case at current prices.
DK Value on Card Factory: Be Greedy When Others Are Fearful
DK Value published a compelling stock analysis of Card Factory, a UK greeting card retailer :
How would you like to invest in a UK greeting cards retailer with its entire store base closed because of COVID? Yes, you have read that sentence correctly. And no, we have not gone mad.
Indeed, it looks like Michael J. Burry is on the same page (from Scion Asset Management 13-F) :
The elevator pitch is the following :
Card Factory is Britain’s leading specialist retailer of greeting cards, dressings and gifts, with an estate of over 1,000 operated stores. It was set-up in 1997 to provide a lower cost, higher quality card alternative to incumbent chains. Key to this formula was to vertically integrate the supply chain in order to lower production costs, shorten lead times and get more relevant card designs. These efficiencies were then passed onto the customer and allowed Card Factory to undercut competitors on prices by 50% to 70%.
The business model was successfully rolled-out across the UK and the company went on to capture 33% of the market by volume (20% by value) in less than 25 years. Speaking of the market, it is important to understand that there is an ingrained culture of sending cards in the UK, with approximately 87% of adults purchasing cards and each person sending on average 20 of them per year. […]
It is a macro-resilient industry, as demonstrated by its growth throughout the GFC[2], and volumes have been rather stable despite increased online communications. […] We therefore believe that Card Factory’s business should come back to near historical levels post-COVID and potentially better.
[…]
We believe that this is a typical case of ‘time-horizon arbitrage’, where high uncertainty is mistaken for high risk. This set-up provides one of the best risk/reward we have ever seen, with immediate and tangible catalysts that could propel the shares significantly higher:
You can read the complete writeup here.
Thought-provoking stuff…
The Erosion of Deep Literacy : What It Is And Why You Should Care (National Affairs)
Reading time: ~25 minutes
One of the most influential pieces I read over the last few months. Worth every minute of reading time.
My 3 personal take-aways from this piece :
#1 What do we call deep literacy and what is happening to it ?
New digital technology is democratizing written language and variously expanding the range of people who use and learn from it […] But it is also clear that something else has been lost. Nicholas Carr's 2010 book, The Shallows, begins with the author's irritation at his own truncated attention span for reading. Something neurophysiological is happening to us. […]
In her 2018 book, Reader, Come Home, Wolf uses cognitive neuroscience and developmental psycholinguistics to study the reading brain and literacy development, and in doing so, helps identify what is being lost. According to Wolf, we are losing what she calls "deep literacy" or "deep reading." This does not include decoding written symbols, writing one's name, or making lists. Deep literacy is what happens when a reader engages with an extended piece of writing in such a way as to anticipate an author's direction and meaning, and engages what one already knows in a dialectical process with the text. […]
Deep literacy has wondrous effects, nurturing our capacity for abstract thought, enabling us to pose and answer difficult questions, empowering our creativity and imagination, and refining our capacity for empathy. […] If we are losing the capacity for deep reading, we must also be prepared to lose other, perhaps even more precious parts of what deep reading has helped to build.
#2 Consequences of the loss of deep literacy are horrendous on a personal, cognitive level
A sadder and more troubling knock-on effect also reveals itself: If you do not deep read, you do not cultivate a capacity to think, imagine, and create; you therefore may not realize that anything more satisfying than a video game even exists. Fully immerse yourself in digital "life," and timelines will flatten into unconnected dots, rendering a person present-oriented and unable to either remember or plan well. That permanently "zoned out" person will become easy prey for the next demagogue with an attractive promise and a mesmerizing spectacle.
Could it be that the masses, referred to by Hamilton as a "dreadful monster," are composed in the main of "concrete thinkers," who think concretely because they lack a facility for, or a habit of, deep reading? After all, deep readers at least may know what they don't know, and hence are better able to deploy shields of skepticism against all forms of advertising, including the political kind that enchants populist mobs into being. Those who lack a reading habit may be locked in perpetual intellectual adolescence, but they can still gather in the street, shout, and even shoot. The 16th-century English bishop John Bridges wrote that a fool and his money are soon parted. He might have said the same about a non-reader and his political agency.
On a separate note, wanted to single out this one punchline :
In science fiction, the typical worry is that machines will become human-like; the more pressing problem now is that, through the thinning out of our interactions, humans are becoming machine-like
#3 A decrease in deep literacy is a threat for liberal democracies
Is it possible that an emotionally more volatile post-deep-literate society may at a certain tipping point regress to accommodate, and even to prefer, less-refined and -earned forms of governance?
We know what such a regression would basically look like: a less abstract, re-personalized form of social and political authority concentrated in a "great" authoritarian leader. On the left, that looks at the extreme like a brave new world order that enforces diversity and radical, undifferentiated egalitarianism from above by dint of brainwashing and coercion. On the right it looks like an extreme form of conservative nationalism, the nation defined as white Americans and tolerated non-whites, in which the state provides social and economic security to the Volksgemeinschaft while strictly policing both its literal and figurative borders. In any event, neither dispensation can stand too much liberalism, and possibly not much more democracy either.
We know that a significant decline in a society's deep literacy can matter because it has happened before. Thanks in part to the revolutionary impact of the codex, male literacy rates in the Roman Republic and then Empire were probably in the 30% to 40% range. […] After the collapse of the Western Roman Empire in 476, literacy rates quickly dropped below 5%, and did not regain their previous levels until the 16th century at the earliest. Until they did, the advent of liberalism as we understand the term could not happen.
Tell Me What You Put in Front Yard And I’ll Tell You Who You Are - Fussell on Class (Astral Codex Ten)
Reading Time: ~20 minutes
Scott Alexander published a great review of Paul Fussell’s Class, A Guide Through the American Status System (1983).
Fussell walks on a fine line and it’s hard at times to know which elements of analysis should be taken at face value, or read as sarcasm :
Anyone imagining that just any sort of flowers can be presented in the front of a house without status jeopardy would be wrong. Upper-middle-class flowers are rhododendrons, tiger lilies, amaryllis, columbine, clematis, and roses, except for bright-red ones. One way to learn which flowers are vulgar is to notice the varieties favored on Sunday-morning TV religious programs like Rex Humbard's or Robert Schuller's. There you will see primarily geraniums (red are lower than pink), poinsettias, and chrysanthemums, and you will know instantly, without even attending to the quality of the discourse, that you are looking at a high-prole setup. Other prole flowers include anything too vividly red, like red tulips.
Or :
Saying "tux" is lower-class and "tuxedo" higher-class. But actually "tuxedo" is middle-class and real upper-class people say "dinner jacket". Someone named Rozanne Weissman tells social climbers to seek out invitations to embassy parties, but "that is pitiable, embassy parties being close to the very social bottom".
There is even a section dedicated to physionomy, precursor to the “Chad vs. Virgin” meme template :
The book review motivated me to read it, as it seems to be a quite entertaining 200-page read !
Arts & History
Larry Levan - Maestro Documentary
Larry Levan was an American DJ best known for his decade-long residency at the New York City night club Paradise Garage, which has been described as the prototype of the modern dance club.
He developed a cult following who referred to his sets as "Saturday Mass". Influential post-disco DJ François Kevorkian credits Levan with introducing the dub aesthetic into dance music.
Along with Kevorkian, Levan experimented with drum machines and synthesizers in his productions and live sets, ushering in an electronic, post-disco sound that presaged the ascendence of house music.
Picasso’s Igor Stravinsky upside down
Drawing Picasso’s portrait of Igor Stravinsky upside down is a famous drawing exercise from the book Drawing on the Right Side of the Brain by Betty Edwards.
This exercise is designed to reduce conflict between brain modes by causing your language mode to drop out of the task. Presumably, the language mode, confused and blocked by the unfamiliar upside-down image, becomes unable to name and symbolize as usual. In effect, it seems to say, I don’t do upside down, and allows the visual mode to take over.
Treat for the Ears
It has been a while since I heard Felix Cartal’s The Searchers for the first time. I did not get curious enough to listen to the whole album for almost 2 years, and ended up listening to it on repeat during a 4hr train trip atfer randomly launching the “single radio” on Spotify.
If you listen to it on there, the album also has mini-clips under the form of short videos and comments from the artist on the genesis of each song. The satirical writing of “Mood” completely went over my head until I read the explanations on how the song was actually writtent
Really cool stuff, recommend that you listen to this (imo underrated) artist, especially as the album is only 1 hour long.
Other Interesting Links
What The Mouse Knows - Simon Harris
The mouse finds another asymmetry: Several hiding places are better than one. He makes many small bets, and the payoff is saving his own life.
People take too few risks, especially asymmetric risks, but most of all they leave too little room for surprise.
Leave room for little bets, little detours, little discoveries, little well-wishings, little letters.
GME Price Action in Relation to Moon Phases
Secret Capital on the Payments industry, summarizing a JP Morgan analysts call