🍋 Gen-Z's Flex Life

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Good Morning! Looks like Justin Bieber songs are the latest private equity investment of 2023. Biebs cashed in on his music and sold his catalog to a Blackstone-owned portfolio company for $200 million yesterday. 

Chat GPT-3 is causing a stir at the University of Pennsylvania Wharton School after the AI chatbot aced a final exam for an MBA course. Fed is feeling pretty bullish about inflation, but don't get too excited just yet. They're still planning on raising interest rates by a quarter-percentage point next week.

Tesla's recent price cut on some models by up to 20% has sent shockwaves through the EV market, leaving other manufacturers scrambling to keep up. But will it spark a full-on EV price war or is Tesla just turning up the heat on the competition?

If you haven't already, please fill out our 2023 compensation survey. We'll be sending out the results as soon as we have enough data points.

Today's sponsor, Daloopa is giving Short Squeez readers access to ten financial models (any public company) when you sign up for a free account on their website.

1. Story of the Day: Gen-Z's Flex Life

It looks like the luxury market is getting a fresh injection of youth, with a new report showing that millennials and Gen Z are driving growth in the industry. According to a report from Bain & Co, these young, wealthy shoppers are expected to make up a third of the luxury market by 2030. It seems that even a pandemic and an economic downturn can't stop these fashionable trendsetters from splurging on designer labels.

The global luxury market has been living the high life with sales skyrocketing 22% in 2022, reaching roughly $381 billion. The luxury market is expected to continue its upward trend, with sales projected to grow between 3% and 8% this year. Despite the current economic climate, the U.S. has regained its throne as the top luxury market, surpassing China with a 25% sales growth and total sales of about $121 billion.

The appeal of designer labels to an ever-younger generation skyrockets thanks to a surge in wealth creation and the power of social media. Thanks to online sales and the rise of secondhand luxury goods websites, it's now easier than ever for the average Joe to buy designer shoes and handbags without breaking the bank.

It turns out Gen Z and millennials have more disposable income than their older counterparts did, and they’re turning to the luxury goods market to show off their wealth. May the Pataguccis live on forever!

2. Markets Rundown

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Stocks closed slightly lower as Q4 earnings begin to trickle in. 

Movers & Shakers

• (+) Bed Bath & Beyond ($BBBY) +15% after a meme stock rally, despite the company nearing bankruptcy.

• (+) Paccar ($PCAR) +9% after the company beat earnings estimates on strong demand for trucks.

• (–) 3M ($MMM) -6% after an earnings miss, plans to lay off 2,500 employees.

Private Dealmaking

• Pasqual, a quantum computing startup, raised $100 million

• Cloudian, a cloud data management provider, raised $60 million

• Deel, an HR platform for hiring international employees, raised $50 million 

• MacroFab, a cloud platform for manufacturing electronic products, raised $42 million

• ThriveCart, a platform that sells tools to SMEs, raised $35 million

• Carry1st, a mobile game publisher, raised $27 million

A Message from Daloopa: Get Access to 10 Financial Models

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Thomas Li (CEO) puts it best: "Daloopa collects literally everything a company discloses."

Daloopa is giving Short Squeez readers access to ten financial models (any public company) when you sign up for a free account on their website.

3. Top Reads

• Amazon’s new RxPass is an incremental step in healthcare foray (YF)

• What tech layoffs mean for the future of tech startups (Axios)

• NYSE glitch halts stock trading (Fox)

• How to reform effective altruism after SBF (Vox)

• Data shows the rent is still too high (Axios)

• Is AI the new crypto? (Substack)

• How ChatGPT is a game changer (Axios)

• Oil dips $1 on global economic concerns (Reuters)

• How much you need to earn to be in the top 1% in every state (CNBC)

• Walmart increases average hourly wage to more than $17.50 (YF)

• Rivian’s chief lobbyist is leaving the EV startup (Fox)

4. Book of the Day: Noise

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Imagine that two doctors in the same city give different diagnoses to identical patients—or that two judges in the same courthouse give markedly different sentences to people who have committed the same crime. 

Suppose that different interviewers at the same firm make different decisions about indistinguishable job applicants—or that when a company is handling customer complaints, the resolution depends on who happens to answer the phone. 

Now imagine that the same doctor, the same judge, the same interviewer, or the same customer service agent makes different decisions depending on whether it is morning or afternoon, or Monday rather than Wednesday. 

These are examples of noise: variability in judgments that should be identical.

In Noise, Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein show the detrimental effects of noise in many fields, including medicine, law, economic forecasting, forensic science, bail, child protection, strategy, performance reviews, and personnel selection. 

Wherever there is judgment, there is noise. Yet, most of the time, individuals and organizations alike are unaware of it. They neglect noise. 

With a few simple remedies, people can reduce both noise and bias, and so make far better decisions.

“In a negotiation situation, for instance, good mood helps. People in a good mood are more cooperative and elicit reciprocation. They tend to end up with better results than do unhappy negotiators.”

5. Short Squeez Picks

• 9 skills that will get you promoted faster 

• 20 books everyone should read in their 20s

• A journey toward overcoming the procrastination habit

• Falling in love won’t make you happy

• Music may boost mental health as much as exercise 

What Else to Read

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Each day, they take one major news story and summarize the best arguments they find from the left, right and center. Then Tangle's founder shares his take.

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6. Daily Visual: US Employment in Select Sectors

Source: Axios

7. Daily Acumen

"Unfortunately, most of us, most of the time, don’t have a bias toward action. 

We don’t ask for the raise we feel we’ve earned. 

We don’t move to the city we’ve been dreaming of since childhood. 

And we don’t do these things because not doing them is easier than acting. 

That’s not to say the outcome will be better. It will almost always be worse. 

But the comfort of the discontented status quo is much less scary than the potential of the unknown."

Source: Joseph Wells

8. Memes of the Day

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