🍋 CEOs Find a Scapegoat

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Good Morning! Hope y'all managed to survive the heatwave and had a great weekend! Amazon announced Friday it's buying Roomba maker, iRobot for $1.7 billion, its 4th largest acquisition (just in case they didn't know everything about you through Alexa). Speaking of bots, Elon Musk has challenged Twitter CEO Parag Agrawal to a debate about the bots on the platform. I hope it escalates to a medieval times style jousting match.

Warren Buffett meanwhile is not getting distracted by anything and is aggressively buying the dip, reporting $3.8 billion in purchases for Q2. Crypto companies are also spending billions but on sports sponsorships. In the past 18 months, crypto companies, including Coinbase and FTX, have committed over $2.4 billion to sports marketing.

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1. Story of the Day: CEOs Find a Scapegoat

There's a lot of craziness going on in the world right now. From war, to viruses, to inflation, you can pretty much take your pick when you're looking for an excuse as to why your company may be underperforming. One of the newest favorites has actually been around for a while now: Work from home.

On Thursday, everybody's favorite overrated burger chain, Shake Shack, said that growth has missed the Street's expectations because of the slow pace of the return to the office trend. This makes sense for a restaurant, but companies in other industries (finance, consumer, insurance) are using this excuse as well.

Clorox, who killed it during the pandemic (both bacteria and performance-wise) said that "low office occupancy rates" hurt demand for its commercial level products. Kimberly Clark, an office tissue and toilet paper maker, has also been lacking. CEO Michael Hsu said, "I don't think all that office demand is coming back in a minute."

According to security company Kastle Systems, office occupancy in 10 major metro areas averaged 44% for the week ended July 27th. With less than half the people in the office, I guess that means less than half the desk and doodoo wipes are required.

Short Squeez Takeaway: I understand that companies are going through tough times right now, I mean the whole world is. What I don't get is how it's taking them so long to adjust their approaches. WFH has been going on for over 2 years now and doesn't look like many workers will ever return to the office fully. You'd think that business models would have been updated by now. As they say, if you fail to prepare, then prepare to fail...

2. Markets Rundown

The bear market rally might be fading as people realize the technical debate of recession or not doesn't matter if everyone's acting like it's a recession.

Movers & Shakers

• (+) Lyft ($LYFT) +17% after announcing an unexpected profit in Q2

• (+) Beyond Meat ($BYND) +22% despite announcing that it will cut 4% of its work force, and missing expectations on the top and bottom lines.

• (–) Warner Bros. Discovery ($WBD) -17% after a disappointing first earnings report post merger.

Private Dealmaking

• Seamless, a Southeast Asian fintech company, to go public via SPAC for $400 million

• Montauk Renewables, which has a $2 billion market cap, is exploring a sale

• Arena Investors raises $930 million for credit-focused deals

• PayIt, a constituent engagement platform, raised $90 million

• Siguler Guff raises $1.97 billion for small buyout funds and deals

3. Top Reads

• More Americans worked part-time last month as recession fears linger (CNBC)

• Berkshire Hathaway posts $43.8 billion loss as stock holdings tumble (Reuters)

• SPACs remain hotter than IPOs (Axios)

• Goldman, bank behind Apple Card, says regulators are probing its card business (CNBC)

• Musk says Twitter deal could go forward once user data is confirmed (Fox)

• Unprofitable unicorns’ public pain (Axios)

• Inflation data may seal fate of unloved UA stock rally (Reuters)

• Why Meta and Mark Zuckerberg are betting big on Whatsapp for business (CNBC)

• Toys-R-Us reopens in nine states in time for the holidays (Fox)

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4. Book of the Day: Face Value: The Irresistible Influence of First Impressions

We make up our minds about others after seeing their faces for a fraction of a second―and these snap judgments predict all kinds of important decisions. For example, politicians who simply look more competent are more likely to win elections.

Yet the character judgments we make from faces are as inaccurate as they are irresistible; in most situations, we would guess more accurately if we ignored faces. So why do we put so much stock in these widely shared impressions? What is their purpose if they are completely unreliable?

In this book, Alexander Todorov, one of the world's leading researchers on the subject, answers these questions as he tells the story of the modern science of first impressions.

Drawing on psychology, cognitive science, neuroscience, computer science, and other fields, this accessible and richly illustrated book describes cutting-edge research and puts it in the context of the history of efforts to read personality from faces.

Todorov describes how we have evolved the ability to read basic social signals and momentary emotional states from faces, using a network of brain regions dedicated to the processing of faces.

Yet contrary to the nineteenth-century pseudoscience of physiognomy and even some of today's psychologists, faces don't provide us a map to the personalities of others. Rather, the impressions we draw from faces reveal a map of our own biases and stereotypes.

A fascinating scientific account of first impressions, Face Value explains why we pay so much attention to faces, why they lead us astray, and what our judgments actually tell us.

“The snap character judgments we make from faces are irresistible but usually incorrect.”

5. Short Squeez Picks

• It feels illegal to know about these 20 websites

• Powerful concepts everyone should know to understand the world

• Why do you never see mosquitoes at Disney Land?

• NYC man learns the hard way to not track down thieves with an AirTag

• 12 books to help you love reading again

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6. Daily Visual: Red-Hot Job Market

Americans (16+) who have been unemployed for 15+ weeks

Source: Axios

7. Daily Acumen: Little Ideas

Bizarreness Effect: Crazy things are easier to remember than common things, providing a distorted sense of “normal.”

Nonlinearity: Outputs aren’t always proportional to inputs, so the world is a barrage of massive wins and horrible losses that surprise people.

Moderating Relationship: The correlation between two variables depends on a third, seemingly unrelated variable. The quality of a marriage may be dependent on a spouse’s work project that’s causing stress.

Denomination Effect: One hundred $1 bills feels like less money than one $100 bill. Also explains stock splits – buying 10 shares for $10 each feels cheaper than one share for $100.

Woozle Effect: “A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth.” - Daniel Kahneman.

Google Scholar Effect: Scientific research depends on citing other research, and the research that gets cited the most is whatever shows up in the top results of Google Scholar searches, regardless of its contribution to the field.

Source: Collaborative Fund

8. Crypto Corner by Bonkalytics.com

• How a Czech royal family is preserving thousands of artifacts with NFTs

• Hacked crypto startup Nomad offers a 10% bounty for return of funds after $190 million attack

• What CPAs have to offer clients entering crypto space

• How a crypto developer faked a DeFi ecosystem

• Bitcoin believers are back to watching stocks after crypto crash

• Artist Damien Hirst experiments with NFTs

For more crypto-focused content, sign-up here.

9. Memes of the Day

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