Aug 18, 2021 Sign Up

"Never argue with stupid people, they will drag you down, then beat you with experiences." – Mark Twain

Good morning! Yesterday, New Zealand Prime Minister, Jacinda Ardern put the nation into a three-day lockdown after the discovery of the first community case of Covid-19 since February. We have a feeling that decision would've probably not gone down well in Muricah. TSA also extended its mask mandate to next year (Jan 18), which was set to expire on Sept 15. 

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1. Story of the Day: Hacker Gets Job Offer

In a bizarre turn of events, Poly Network, who were the subject of one of the biggest crypto hacks ever, is offering its hacker to be its Chief Security Advisor. Poly Network says it will not seek prosecution of the hacker who stole more than $600 million in digital currency from the decentralized finance (DeFi) platform.

The hacker dubbed "Mr. White Hat," might be the coolest hacker ever. The name suggests that the the hacker might be the well-intentioned type who finds vulnerabilities in companies' cybersecurity and exposes them so the holes can be closed. (seriously what a nice guy) White Hat has returned more than half the funds, and Poly Network has offered the hacker a $500k "bug bounty" in hopes of persuading the person to return the rest.

The company tweeted: "#PolyNetwork has no intention of holding #mrwhitehat legally responsible and cordially invites him to be our Chief Security Advisor. $500,000 bounty is on the way. Whatever #mrwhitehat chooses to do with the bounty in the end, we have no objections." (what a time to be alive)

Short Squeez Takeaway: The world is going crazy and we are here for it. It remains to be seen whether Poly Network is just baiting its hacker or will it actually stand by its word should the hacker come forward. In any case, next time you get rejected from a company you applied to, try hacking them, maybe they'll offer you a job.

2. Markets Rundown

• US stocks closed lower Tuesday, ending a five-day run of record finishes, after July retail sales came in weaker than expected and concern grew about the spread of the delta variant, which may slow economic growth

Movers & Shakers

• (+) Monday.com ($MNDY) +24% after the work-management software provider announced strong second-quarter results.
• (+) Endeavor ($EDR) +8% on solid second-quarter results.
• (–) DXC Technology ($DXC) -12% after J.P. Morgan analyst Tien-tsin Huang turned bearish on the technology consulting services company.

3. Top Reads

4. Book of the Day: The Power of Writing It Down: A Simple Habit to Unlock Your Brain and Reimagine Your Life

For anyone who's trying to make sense of their life, who wants to get unstuck from the patterns that hold them back, hear this incredible news: everything you need for the freedom you want is entirely within reach. This practice and pathway is free, it's readily available every day of your life, it takes just minutes of your time, and anyone can do it.

Drawing from years of coaching hundreds through the writing process–from first-timers to New York Times bestselling authors–Allison Fallon shares tried and tested practices for getting started, staying inspired, and using this simple habit to shift how you feel and show up to your life. Pen and paper is simply the method, but the reward is the real magic: new depths of self-discovery, creativity, and intentionality for living.

5. Daily Visual: World's Refugee Population
Top 10 origin countries of people displaced across borders at the end of 2020

Source:  Statista

6.  Daily Acumen: Antifade Model: Part 2

Yesterday, we talked about how in general, companies’ valuations follow the classic “fading return” model where it is assumed that eventually, all returns fade to the cost of capital. Yet ValuAnalysis research confirmed that a growing number of disruptive companies are not following this path – instead their economic rent (the ratio of free cash flow to economic assets) increases over time rather than decreases and is described as the “Antifade”.

One of those companies is Amazon. The company’s operating rent has been stable during the past decade, i.e. the company is not yet fading. The company generates over $20 billion of normalized net Free Cash Flow and trades on about 78x this amount (2020). However, Amazon is all about leverage. The current multiple is more than justified based on the economic free rent that it produces. The more Amazon is able to repel its fade, the higher the multiple is likely to stay. Crucially, “fade-beating” is at the heart of the company’s execution.

The research firm, ValuAnalysis, believes that based on Amazon’s free cashflows and a 20-year competitive advantage, the current multiple implies a fairly stable return (17.3% and 17.5% for the next two decades, respectively) and a marked step down in revenue growth from one decade to the next (12% and 7.5%, respectively).

Tomorrow, we’ll take a look at Tesla.

Source: ValuAnalysis

7. Memes of the Day

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