🍋 Retail Therapy

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Good Morning! Following in Apple's footsteps, Google plans to update tracking in apps on Android phones. Not looking good for Meta who took a $10 billion hit in revenue after Apple's changes were put in place. Prince Andrew is settling out of court with Virginia Giuffre, who had a sexual abuse lawsuit against him. Apparently his mother, the Queen, helped pay the settlement too. Nepotism doesn't hurt, especially when you're royalty. If you can't afford one of Branson's trips to space, maybe you can check out a cruise. The industry is on the rebound as ships are now equipped with isolation and quarantine facilities, and the CDC lowered its alert for the ships from "very high" to "high."

Plagued by high labor costs and low margins, the $100B commercial landscaping market needs an overhaul and today's sponsor Graze is doing just that. Learn more and invest in Graze here.

1. Story of the Day: Retail Therapy

According to the Commerce Department, retail sales jumped 3.8% in January, beating both the estimate of 2%, and the numbers of the last 10 months. Not to be outdone, one particular control group was tracked and their sales were measured to calculate GDP, which came out to being up 4.8% or 3x the estimates. People spread the wealth too with gains in 8 of 13 retail categories showing increases.

For those who have been following headlines, this may not make sense to you. Consumer sentiment is at the lowest level since 2011, and you can't even buy a Starbucks coffee without hearing about inflation. Maybe it's because people buy things with their hearts, and not their heads.

Consumers seem prepared to spend through the current bout of inflation while companies figure out wage issues, labor shortages, and supply chain problems and prices fall to more normal levels. The US household net worth grew by $34.1 trillion dollars to a whopping $144.7 trillion by end of Q3 according to the Fed. That's a 31% increase over the prior 6 quarters. For comparison sake, the record for calendar years before 2020 was a mere $12.5 trillion in 2019.

One obvious contributor to the fat wallets is the fiscal and monetary stimulus that happened during the pandemic. Americans held on to $2.7 trillion in excess savings which is roughly three times the normal level. Wages in 2021 were also higher than they would've been sans pandemic, by about $400 billion, according to RBC Capital Markets.

Short Squeez Takeaway: Over time, everything changes and maybe spending habits and reactions to inflation have as well. For example, households are spending a record low amount of disposable income to service debt, and higher gas prices are also apparently not as relevant with spending on motor fuels currently half of what it was in the 2010s. Inflation can't be ignored entirely as lower income families are struggling with higher prices. 

Source: Bloomberg

2. Markets Rundown

Markets were essentially flat thanks to imminent geopolitical and monetary policy decisions influencing investors to wait and see what happens.

Movers & Shakers

• (+) Upstart Holdings ($UPST) +46% after the AI lending company beat expectations in both Q4 results and outlook, saying they'd buy back $400 million of their stock.

• (+) Generac Holdings ($GNRC) +14% because their 2022 guidance shows another year of "exceptional revenue growth."

• (–) Wix.com ($WIX) -23% since they reported an expected loss per share, but missed on sales.

3. Top Reads

• Despite what you might think, people are retiring early (WSJ)

• The secret to peace and joy is not financial security (Humble Dollar)

• The FIRE movement won't solve the other problems in your life either (Tawcan)

• Are you being taken advantage of by Wall Street (Tony Isola)

• You won't be seeing a Miracle 2 anytime soon (WSJ)

• "Life is about tradeoffs and priorities." (Wealth Found Me)

• Investin' ain't easy (Banker On Wheels)

• You, and pretty much everyone else, should probably do some estate planning (White Coat Investor)

• The importance of context in terms of debt (TKer)

A Message from Graze: Addressing Labor Shortages in a $100B Industry

Plagued by high labor costs and low margins, the $100B commercial landscaping market needs an overhaul and a company called Graze is doing just that. 

They’ve created a 100% electric commercial lawn mowing solution that saves companies up to 50% in labor costs, can increase profit margins by 3-5x and cuts fuel costs by up to 75%.

Built by a team with deep technical expertise in robotics and world class investors, Graze has already achieved $32M in pre-orders and continues to target landscaping companies managing parks, municipalities, golf courses, airports and more.

Learn more and invest in Graze here.

4. Book of the Day: Wanting: The Power of Mimetic Desire in Everyday Life

Gravity affects every aspect of our physical being, but there’s a psychological force just as powerful―yet almost nobody has heard of it. It’s responsible for bringing groups of people together and pulling them apart, making certain goals attractive to some and not to others, and fueling cycles of anxiety and conflict. In Wanting, Luke Burgis draws on the work of French polymath René Girard to bring this hidden force to light and reveals how it shapes our lives and societies. 

According to Girard, humans don’t desire anything independently. Human desire is mimetic―we imitate what other people want. This affects the way we choose partners, friends, careers, clothes, and vacation destinations. Mimetic desire is responsible for the formation of our very identities. It explains the enduring relevancy of Shakespeare’s plays, why Peter Thiel decided to be the first investor in Facebook, and why our world is growing more divided as it becomes more connected.

Wanting also shows that conflict does not arise because of our differences―it comes from our sameness. Because we learn to want what other people want, we often end up competing for the same things. Ignoring our large similarities, we cling to our perceived differences.

Drawing on his experience as an entrepreneur, teacher, and student of classical philosophy and theology, Burgis shares tactics that help turn blind wanting into intentional wanting--not by trying to rid ourselves of desire, but by desiring differently. It’s possible to be more in control of the things we want, to achieve more independence from trends and bubbles, and to find more meaning in our work and lives.

The future will be shaped by our desires. Wanting shows us how to desire a better one.

“Humans learn—through imitation—to want the same things other people want, just as they learn how to speak the same language and play by the same cultural rules.”

5. Short Squeez Picks

• Brave Wallet is a secure crypto wallet built natively in a web3 browser. No extensions required. Store, manage & grow your portfolio, get NFT & multi-chain support, and more

• Interview with the author of "I Will Teach You to Be Rich," Ramit Sethi

• How to MacGyver an Amazon Prime alternative

6. Daily Visual: The Rent is Too Damn High!

Highest rent growth in 2021 by city

Source: Axios

7. Daily Acumen: Hedonic Happiness

"Making $1 million in one year, but nothing in the preceding nine, does not bring the same pleasure as having the total evenly distributed over the same period, that is, $100,000 every year for ten years in a row.

The same applies to the inverse order – making a bundle the first year, then nothing for the remaining period. Somehow, your pleasure system will be saturated rather quickly, and it will not carry forward the hedonic balance like a sum on a tax return.

As a matter of fact, your happiness depends far more on the number of instances of positive feelings, what psychologists call “positive affect,” than on their intensity when they hit. In other words, good news is good news first; how good, matters rather little. 

So to have a pleasant life you should spread these small “affects” across time as evenly as possible. Plenty of mildly good news is preferable to one single lump of great news. The same property in reverse applies to our unhappiness. It is better to lump all your pain into a brief period rather than have it spread out over a longer one."

Source: Nassim Taleb in The Black Swan

8. Crypto Corner

• Romance scams fueled by pandemic and crypto

• Buffet invests in Bitcoin friendly bank

• Bitcoin spikes even with warning of "exceptionally high" correlation to equities

• US Senate making moves to protect against risks of El Salvador's Bitcoin play

• Disney makes a hire to focus on metaverse

• NFT dive led to fall in Ethereum's burn rate

9. Memes of the Day

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