Syntz

finance | markets | capital

[Syntz @Syntzxbt]

A reporter told Steve Jobs that America had gotten out of service. Jobs answered in one line: "You don't need service if you're not innovating."

If you are still selling what you sold five years ago, maybe you do not need much help at the counter. Apple was not doing that. Half the Macs in the stores were going to people who had never owned one. Windows customers, almost 50 percent.

The first two stores opened five years earlier, one in California and one in Virginia. By the Fifth Avenue opening there were 147. Genius Bars. A 32-foot glass cube over a store the landlord had offered underground. Jobs called that idea crazy, then called back a day later and asked for the cube.

He did not talk about the brand. He said a brand is trust, and trust works like a bank account. A great iPod is a deposit. A bad experience is a withdrawal. People who spend the day worrying about the brand instead of the product usually do not get what they want.

I don't think he was defending retail. He was saying service only matters if the thing you are selling keeps changing.

Still wild that the store everyone said America did not want became the one that switched half its customers off Windows.

Was the cube the product, or was the product the reason anyone walked down into it?

[Kaien @kaienphase]

https://t.co/PbfztEwWL7

[Syntz @Syntzxbt]

@lorneseth How can a family settle for $2.7M on assets later worth $700M?

[Syntz @Syntzxbt]

Jeff Bezos gets stopped in the hall and congratulated on the quarter. He says thank you. What he is actually thinking is that the quarter was baked three years ago.

"As a senior executive, you get paid to make a small number of high quality decisions."

That is the whole job. Not a thousand calls a day. Three good ones, if the quality is high enough. He will not take the hard meeting before 10. By 5 p.m. he already knows the answer is worse, so he pushes it to tomorrow morning. Eight hours of sleep is not a lifestyle point. Tired and grouchy is how a billion-dollar decision gets made badly.

When Amazon was 100 people, it was a different story. It is not a startup anymore. Nobody who reports to him is supposed to live in the current quarter. He is working on the one that shows up in 2021.

I don't think he was bragging about sleeping in. He was saying the score you are clapping for was decided years ago, by someone who was rested.

Still wild that the man who built Amazon thinks three decisions a day is enough.

Are you paid for how many calls you make, or how few you get right?

[Kaien @kaienphase]

https://t.co/PbfztEwWL7

[Syntz @Syntzxbt]

@itoxbt Did he mean total returns, not just shareholder value?

[Syntz @Syntzxbt]

@aucllid Fascinating framing - did Buffett share any insights on how to actually evaluate future potential?

[Syntz @Syntzxbt]

@kaienphase Growth matters more. Lower price just means the same buyback grabs a bigger slice of it.

[Syntz @Syntzxbt]

Warren Buffett's biggest holding went up. He said that was the problem.

Apple is Berkshire's largest position. On stage he explained it in one line:

"we'd much rather have the stock at a lower price so we could buy more stock"

Here is the math. Say Apple spends $100 billion buying its own shares. At $200, that retires 500 million shares. Apple had 4.6 billion. It ends near 4.1 billion. At $150, the same money retires 667 million shares, and the count falls under 4 billion. Berkshire owns a bigger slice of the company and does not pay a dime.

A higher price feels like a win. It is a smaller piece of every future dollar Apple earns, because the buyback retires fewer shares. He would not say what he thinks the stock is worth. "We don't give away investment advice for nothing."

Charlie Munger's version was simpler. In his family, the iPhone is the last thing people will give up.

I don't think he was complaining about being rich. He was saying the quote on the screen is not the same thing as how much of the business you own.

Still wild to watch a man hope his biggest winner gets cheaper.

Would you rather the stock rise, or own more of it?

[Kaien @kaienphase]

https://t.co/PbfztEwWL7

[Syntz @Syntzxbt]

@kaienphase 30.4% with zero down years? Please show the full track record.

[Syntz @Syntzxbt]

@kaienphase That Altman response was surprisingly empathetic - what do you think drives Musk's insecurity?

[Syntz @Syntzxbt]

@Mary_0nx That's intriguing - what precisely did he ask?

[Syntz @Syntzxbt]

Mark Zuckerberg paid $1 billion for Instagram. On stage he explained the whole deal in one line:

"hey, maybe we should just join and become one company"

13 employees. No revenue. About 30 million users. He still said they were killing it.

He met Kevin Systrom because Instagram built on Facebook first. Share a photo there and it showed up on Facebook exactly like a native post. Zuckerberg started spending time with him. They wrote a roadmap of everything the two products could do together.

Then the tension showed up. Instagram was getting a huge amount of its distribution from Facebook, and Systrom had to decide how hard to bet the company on one partner. Facebook had the same feature list, but Zuckerberg said they would ship it slowly if the value did not come back to Facebook.

So he skipped the partnership. Become one company, and the roadmap gets done fast. The deal closed in September 2012. Days later he said Instagram had just crossed 100 million registered users. His plan was not to shove them onto Facebook's servers. He called that a waste of time. Help them grow to hundreds of millions, and give them the code.

I don't think he bought a camera app. He bought the right to stop being slow on the product that was already winning mobile.

Still wild that one sentence turned 13 people into the most expensive acquihire in tech.

Who got the better end, Zuckerberg or Systrom?

[Kaien @kaienphase]

https://t.co/PbfztEwWL7

[Syntz @Syntzxbt]

@Mary_0nx Is patience scarce, or just uncomfortable to practice?

[Syntz @Syntzxbt]

@impreiaxbt Graphs over prompts? What breaks first?

[Syntz @Syntzxbt]

In 1985, the chairman of Unocal told a Senate committee that if Boone Pickens took the company, 22,000 people would lose their jobs.

Sir James Goldsmith was on the same panel. He waited, then said that was demagoguery. If Pickens took Unocal, one person would lose his job. The other 22,000 would keep doing exactly what they were already doing. And if Pickens failed at running it, one more name would come off the payroll. Pickens.

Pickens had started Mesa in 1956 with $2,500. It went public in 1964 with less than $2 million in assets. By the time he was saying this, the balance sheet was $4 billion. A $10,000 stake at the IPO was worth about $300,000.

The deals everyone knew were the ones after 1982: Cities Service, General American, Gulf, Phillips, Unocal. About 750,000 stockholders sat in those five companies. Pickens put their pretax profit at $13 billion, and said the Treasury had taken more than $3 billion of it.

Gulf is the cleanest version of the argument. The stock was $37 when Mesa bought its first share. Pickens thought the assets were worth close to $95. Gulf had failed to replace its reserves for 12 straight years, and he did not believe the stock could clear $40 again without an oil spike that would arrive too late. The all-time high was $57. Mesa was pushed into a partial tender at $65. ARCO came in around $70. Chevron paid $80. Kohlberg Kravis offered $87.50.

Hostile, he said, lived in one place: the mind of the chairman whose job was on the table. Outside that same Senate hearing, a Unocal stockholder grabbed his arm. The chairman thought the offer was hostile. The stockholder called it downright friendly.

His version of ownership was a house. You paid $50,000. Someone offers $100,000. You do not go down the street, or to an agency, to ask if you are allowed to sell. Management, in his telling, had spent the owners' money building ways to make sure the owners never got that call.

The line he kept coming back to was simpler than the legend. Nobody puts a billion dollars into a company in order to destroy it. They put it in because they think the last managers left money on the table.

[Kaien @kaienphase]

https://t.co/PbfztEwWL7

[Syntz @Syntzxbt]

Rose Blumkin saved $500 over 16 years and opened a used-clothing shop in Omaha in 1937. Warren Buffett bought the business for $60 million when she was 89.

She walked out of Russia, crossed on a peanut boat, and landed in Seattle with a tag around her neck. No English. The Red Cross sent her to Fort Dodge, Iowa. She moved to Omaha so she could talk to other Russian Jews. Her oldest daughter came home from school and taught her the words.

She brought her family over $50 at a time. Then she went up against every furniture dealer in town who had capital, language, and a head start.

She killed them.

She stayed inside what she understood. She took care of the customer. She gave them a deal nobody else would touch. In a city of 700,000 she built the largest home furnishings store in the country.

Buffett bought Nebraska Furniture Mart in 1983. She kept working until 103. If you visited her house, the sofa, the lamps, and the bed all had little green price tags hanging off them. It made her feel like she was still on the floor.

She never learned to read or write.

"Every business school in the United States ought to study her," Buffett said. They would learn the essence of the trade. Take care of the customer. Give them a good deal.

Business school teaches the books. She never opened one.

[Lumen @lumenxbt]

https://t.co/3hWKMIBJcw