Monthly Shorts 10/21
Shot
Muddy Waters, a shortseller, is unimpressed with Lemonade.com. What’s interesting to look at here is mostly the language:
Muddy Waters Capital LLC is short Lemonade because it is clear that Lemonade does not give a fuck about securing its customers' sensitive personal information.
Yeah. It’s like that.
I can only assume it is due to callous indifference to security. Or maybe you personally were distracted by selling $48 million of stock just six months after the Lemonade IPO.
Note that the CEO’s net worth is on the order of 90 million dollars, so selling that much stock probably means that he can now imagine the concept of diversification, which means his financial advisor is now crying less. But the amount of money is large enough that Muddy Waters can use it as an attack.
Though, uh, heads up: there might be crime if Brits stop using Lemonade as individual users because they read the document.
If you are in the United Kingdom, you confirm that you are accessing research and materials as or on behalf of: (a) an investment professional falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”); or (b) high net worth entity falling within Article 49 of the FPO (each a “Permitted Recipient”). In relation to the United Kingdom, the research and materials on this website are being issued only to, and are directed only at, persons who are Permitted Recipients and, without prejudice to any other restrictions or warnings set out in these Terms of Use, persons who are not Permitted Recipients must not act or rely on the information contained in any of the research or materials on this website.
So, someone’s telling me that Lemonade doesn’t care about user security, but I “must not” act on this. Is the UK…OK?
Technically I’m also in violation because I didn’t link to their overall research page but to the file directly. They’re welcome to sue me.
Chaser
The letter was published May 13th, the day after the stock price nadir of the year to date.
Sugar and Spice and Everything Nice
The Taliban is going to allow polio vaccinations! This is the best news since the malaria vaccine even earlier in October, and I am thrilled. Polio vaccination had been paused in Afghanistan after the CIA used a fake public health campaign to hunt for Bin Laden, which empirically had strong negative effects on willingness to participate in vaccinations by individuals, linked to the Taliban’s determination that the CIA would not get to use the same trick twice.
I don’t particularly like Selectorate Theory, but it comes up enough that I’m glad to be able to link to this piece as a truly fantastic writeup of it. An excellent example of where a good summary can get 70% of the value in 5% of the time of a book.
Doom and Gloom
Here’s a fascinating review of a study on alcohol that didn’t happen.
I utterly despise how reasonable this is!
The Buddhist point of view takes the function of work to be at least threefold: to give [a person] a chance to utilise and develop [his or her] faculties; to enable [a person] to overcome [his or her] ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.
An essay titled “Buddhist Economics” should not usefully contain my concerns about UBI!
To strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.
I am worried that there is a reason aristocratic social norms are so consistently terrible, at least from my perspective in the upper middle classes, which could in some ways be defined as “the work is dignified but they still have to do it.”
Facebook is going to get worse to use. In the most simple model, this will continue to happen until it dies. It does this for the same reason that fanfiction.net is full of ads, OKCupid is de-emphasizing questions in favor of more hopeless swiping they push you to pay for, and Youtube has unskippable ads all the time.1 Early on in producing a network-effect based business, you need to actively bribe people to use it. In time, as the returns from the network get stronger, you need to do less and less to recruit new users: the existing network strength is enough. Eventually, this starts getting really negative: ads all over the place and every ounce of surplus possible extracted. But some people still hold on because migration is a struggle. Eventually they’ll all leave, but discount rates might still leave it positive for you to force them out faster if you make more money before they go.
Incidentally, if I was planning on running my flagship product into the ground, I’d change the name of the company away from the name of the flagship product. Facebook is doing exactly that: expect the corporation to do perfectly well out of all of this.
Yes, I mentioned an excess of ads twice. They’re a very common manifestation.