The Metacritic Digest #1 - My impression on America
More: SwiftKey and Microsoft Editor. Twitter Blue. Book value media.
Greetings, fellow knowledge junkies! Welcome to the inaugural edition of Metacritic Digest, where we'll be serving you a weekly smorgasbord of thoughts on stock investing, tech, politics, culture, and whatever else strikes my fancy. Before diving in, I'd like to share a little backstory on how this publication came to be, and how yours truly – Metacritic Capital – consulted the ever-wise1 ChatGPT for advice on naming this venture.
You see, dear reader, in a world where Elon Musk's Twitter empire is actively suffocating our reach (unless we cough up the dough for that coveted blue checkmark), I've decided it's time to break free from the shackles of 280 characters and bring my oh-so-valuable musings to you in this delightful weekly package. Because, of course, who wouldn't want a little more Metacritic Capital in their lives?
Now, about the name: Metacritic Digest. In a thrilling and surprisingly non-robotic conversation with ChatGPT, we brainstormed a list of potential monikers for this weekly masterpiece. Ultimately, we landed on Metacritic Digest, an exquisite blend of my codename and the notion of digestible insights. Sounds fancy, huh?
I am obviously inspiring myself on geniuses like
2 and Brad Slingerlend, who make terrific digests. I’ll try to raise my hurdles over time to value the reader’s time.My impressions on America
Despite spending so much of my awake time thinking about American issues during my work day, I never had been into the U.S. This changed recently. Of course, I know a lot of stuff about the U.S., but even spending just a couple of weeks, some stuff catches your eye. Beware this is over-indexed to New York.
I can’t stress enough how weird the ethnic divide is for me, I think I’d need a long time to get used to it, if ever. The first and most visible one is how visible it is in the urban landscape is how as you walk through certain neighborhoods, there are billboards and local businesses with writings in foregin languages. People live heavily segregated. The second one and least visible is how uncommon it is to see mixed ethinicity couples.
On my trip to Philadelphia, I met the Liberty Bell. I had never heard about it before, so it caused me quite a surprise that there was a national symbol in a bell that was ring when they declared independence. It was the most American thing I saw during the whole trip. My first thought was that it was quite dumb. My second thought was that I deeply admire America’s ability to unite its people, despite their differences, behind national symbols. Later during my visit to the September 11th memorial, I increased my admiration how that nation can unite during times of peril and emerge as one. I am a believer in America’s exceptionalism.
Weed turned out to be really big in NY. But as someone who is completely outside this kind of stuff, I can’t see how this isn’t a pure commodity. All stores look the same and people buy based on the THC value trusting someone in Alberta took care to check the quality of the product.
I hated the tipping culture. People should charge how much they think their service costs, rather than a mysterious value. Restaurants and alike are kind enough to tell you how much you need to tip, but I was in the dark about other stuff.
The card payment system seems a bit antiquated. I was always with some greenbacks because I wasn’t sure my Google Pay would be accepted. When we went into a bar, a friend had to leave his card with the waiter, it seems they would actually pick up his card and charge him using the CVC number on the card if he didn’t come back to pay. Sometimes, they also ask you to sign the ticket. On the other hand, paying for the subway with my phone, just like I pay in my city, was a moment of true marveling for our global capitalist system, and particularly for Mastercard, for enabling the transaction.
MTA is underearning in their advertising revenue. There were oddly specific ads in the subway. Is the best price for the spot a lawyer for people that are on bail?
Caffeine-free Coke is my new favorite thing about America after freedom.
One thing I missed completely while studying Intuit was that H&R Block had physical locations. LOL! What do they become after April, Halloween in January Stores?
Where can I go long all these weird water types that they sell? There was a wall on Trader Joe’s with all the different sort of water-types. Certainly they sell at a significant margin because, well, they’re just water. A classic variety of price discrimination. Not that I never saw expensive water sold to rob the rich, but boy, I was surprised. Or as Rory Sutherland once said on ILTB:
The real reason Bang & Olufsen exist is if you're a hedge fund manager and you go into a TV shop and there's a Samsung, that is fantastic, it's 55 inch, flat screen, blah, blah, blah, and it's $920. A bit of you goes, "Well, a grade school teacher could afford that telly, what the hell is the point of being a fucking hedge fund manager if I have the same TV as a teacher?
Same for water.
Great country, but a bit racist. 9/10.
SwiftKey and Microsoft Editor
I think a lot about Microsoft, and while trying to add Grammarly to Chrome to write this piece, I deleted my Microsoft Editor extension (which I am deeply regret), I realized: hey, this thing is a wonderful way to both collect data to train their AIs. A few seconds later I thought “wow, Redmond also recently bought SwiftKey”. To the uninitiated, SwiftKey is the best smartphone keyboard under the sky.
In retrospect, it’s crazy how many of Microsoft’s recent acquisitions or product launches were ways to either collect data to train AI or more importantly, to distribute AI capabilities:
Visual Studio Code
Microsoft Teams
Microsoft Editor
I tried asking Bing to check whether SwiftKey collect data to train AI, but even if they don’t3, SwiftKey and Editor are two mor nice distribution channels.
More importantly, I think these acquisitions, particularly Nuance, that is the best version of Amazon’s Alexa, show that Microsoft didn’t get luck to be in the forefront of AI and actually, they have been working on this silently for many many years.
Twitter blue and Reddit
I’ll be very surprised if Twitter crackdown of free distribution works well for them. The people that are willing to pay are exactly those that are selling something, this will make the recommendations even worse. Dispite some of us finding value on Twitter, for the vast majority of mDAUs they don’t find any value because they’re bots they just want to talk sports, TV or politics with friends. And I see Reddit well positioned to capitalize, because many of the Twitter interests people . I am excited for their IPO.
Book value media
If there was a sector in the economy that most resembles airlines, it’d have to be media: it’s fun, it’s always changing, it has complex supply chains, and most importantly: you should keep your money away. It doesn’t stop me from looking in the space for ways to disrespect rule no 1.
It’s always hard to talk about book value in companies that are so intangibles heavy. Companies like Paramount have significant amounts of goodwill on their balance sheets. But an easier way is to look at content spending and compare it to the enterprise value and market cap. We land at:
Netflix: 9.8x EV / Content spending, 9.1x P / Content spending
Warner Bros. Discovery: 6.3x EV / Content spending, 2.9x P / Content spending
Paramount: 1.7x EV / Content spending, 0.85x P / Content spending
CuriosityStream: 0.6x EV / Content spending, 2x P / Content spending
Is it possible that these companies, particularly CURI 0.00%↑ burn so much in those content libraries that their legacy catalogs aren't worth their EVs? I don't know, but seems asymmetric.
Yes, ChatGPT was self-serving here when she wrote it and I thought it was funny to leave it.
That for whatever reasons, has me blocked on Twitter, but it didn’t stop me from going premium.
A thesis of mine is that data is overrated in a world where you can train smart AI just by scraping the open web