Guy Tal

One of the guys that make things happen on the internet. Also passionate about media, sports and comedy. All opinions expressed from this account are mine own.

[Guy Tal @guyavital]

MTOTW #25: It doesn't matter how powerful your engine is. If you don't have gas in the tank, you're not going anywhere

[Data Center Knowledge @datacenter]

Voters in Monterey Park, California, have approved a ballot measure prohibiting data centers within city limits, creating what appears to be the first voter-enacted municipal ban on data center development in the US.

https://t.co/yDgoH1oneP

[Harvard Business Review @HarvardBiz]

Generative AI use keeps expanding, and the latest edition of this study shows how quickly people are weaving it into everyday work and life. The changes from year to year are less about dramatic shifts and more about how habits, expectations, and use cases continue to evolve. At the same time, new concerns are emerging: Are people outsourcing too much thinking to AI, and turning to it for support once reserved for other humans? In business, the picture remains mixed, with plenty of experimentation producing incremental gains more often than transformational outcomes.

Read the article to learn what these patterns reveal about where generative AI is heading next. https://t.co/4gtIr5cJ8V

[Harvard Business Review @HarvardBiz]

Most change initiatives fail because leaders misunderstand how employees experience them. In this HBR Executive Masterclass, BCG’s Julia Dhar and Kristy Ellmer, co-authors of “How Change Really Works,” explain the five phases of successful organizational transformation: decide, plan, start, persist, and end. You’ll learn why alignment is not agreement, how the planning fallacy undermines execution, why employees support what they help build, and how momentum sustains change over time.

This HBR Executive Masterclass and more are available to HBR Executive subscribers. https://t.co/E91cp53bLq

[CNET News @CNETNews]

After 21 Years, Gmail Finally Lets You Change Your Email Address. Here's How https://t.co/DYQi9c1MjY

[Harvard Business Review @HarvardBiz]

You’re wrapping up for the day. It’s 4:57 p.m. If you’re not out the door by 5, you won’t be able to meet your nanny before she has to leave. A colleague comes over to ask if you can help him with a quick task. How do you turn him down without appearing like a poor team player? https://t.co/6gCMM6HGAY

[Satya Nadella @satyanadella]

A couple reflections on the quantum computing breakthrough we just announced...

Most of us grew up learning there are three main types of matter that matter: solid, liquid, and gas. Today, that changed.

After a nearly 20 year pursuit, we’ve created an entirely new state of matter, unlocked by a new class of materials, topoconductors, that enable a fundamental leap in computing.

It powers Majorana 1, the first quantum processing unit built on a topological core.

We believe this breakthrough will allow us to create a truly meaningful quantum computer not in decades, as some have predicted, but in years.

The qubits created with topoconductors are faster, more reliable, and smaller.

They are 1/100th of a millimeter, meaning we now have a clear path to a million-qubit processor.

Imagine a chip that can fit in the palm of your hand yet is capable of solving problems that even all the computers on Earth today combined could not!

Sometimes researchers have to work on things for decades to make progress possible.

It takes patience and persistence to have big impact in the world.

And I am glad we get the opportunity to do just that at Microsoft.

This is our focus: When productivity rises, economies grow faster, benefiting every sector and every corner of the globe.

It’s not about hyping tech; it’s about building technology that truly serves the world.

[Stanford Graduate School of Business @StanfordGSB]

Creating the new is often more alluring than maintaining the old. But MBA student Lauren Bilbo reminds us: “Maintenance enables innovation. Without maintenance, we can't create the [things] that introduce lasting positive change into the world.” https://t.co/ahPZdEZPjt

[Steve Wiesner @SteveWiesnerSMB]

$47.61 for paper towels and TP at Target today.

Absolutely insane example of corporate greed and price gouging.

In fact, it made me so angry, I decided to do some analysis.

Many prices have increased by 50% or more since COVID, so I decided to put on my investment banking hat and spread some financials back to 2018 / 2019.

And man, was I ever surprised...

I started by looking at Target's annual revenue:

2018: $75.4 billion
2019: $78.1 billion
2020: $93.6 billion
2021: $106.0 billion
2022: $109.1 billion
2023: $107.4 billion
Last Twelve Months (LTM): $106.6 billion

Couple things I noticed. First, revenue has slipped a bit since 2022 and is continuing to do so in 2024 - not a great sign for the broader economy. Second, there's been big growth since 2018. They must be price gouging!

Well, I looked a bit deeper. Let's look at their cost of goods sold over the same period (the price they paid to buy the products they sold you).

2018: $53.3 billion (70.7% of sales)
2019: $54.9 billion (70.2%)
2020: $66.2 billion (70.7%)
2021: $75.0 billion (70.7%)
2022: $82.2 billion (75.4%)
2023: $77.7 billion (72.4%)
Last Twelve Months (LTM): $76.8 billion (72%)

Wow, so let me get this straight...

Target is making less money (28 cents) on every dollar of sales today than they were in 2018 (29.3 cents). Hmmmm. That's weird. Maybe they're not so good at this price gouging thing.

So, I decided to dig even deeper. They were prolly being evil and firing all of their employees so they could make up for the money they weren't gouging, right?

So, I looked at their operating expenses (the amount they pay to run the stores and the overall business):

2018: $15.7 billion (20.9% of sales)
2019: $16.2 billion (20.8%)
2020: $18.6 billion (19.9%)
2021: $19.8 billion (18.6%)
2022: $20.7 billion (18.9%)
2023: $21.6 billion (20.1%)
Last Twelve Months (LTM): $21.7 billion (20.3%)

Hmmmm. Very unusual behavior for someone price gouging me. Let's sum this all up by looking at their operating cash flow:

2018: $6.3 billion (8.4% of sales)
2019: $7.0 billion (9.0%)
2020: $8.8 billion (9.4%)
2021: $11.3 billion (10.7%)
2022: $6.2 billion (5.7%)
2023: $8.1 billion (7.6%)
Last Twelve Months (LTM): $8.1 billion (7.6%)

So, what this all means is that Target's making less overall profit on every dollar of revenue today (7.6 cents) than they were in 2018 (8.4 cents). And revenue has grown at an average (CAGR) of 7.3% per year since 2018 and operating cash flow has grown at 5.1% per year - both of which are pretty much in line w/ the overall rate of inflation during that period.

I guess I expected price gouging to be more profitable.

❌ NO PRICE GOUGING AT TARGET ❌

"Well Steve," you may say, "that's all fine and good, but even if Target isn't price gouging, Kimberly Clark and International Paper (both of whom are involved in the manufacture / marketing of paper towels and TP) sure as H3ll must be!"

Well Yes! Surely they are! I'll spare you all the numbers, but here's the summary:

Kimberly Clark:
5-year avg revenue growth: 2.0%
2018 Gross Margin: 69.7%
LTM Gross Margin: 64.0%
2018 EBITDA Margin: 12.1%
LTM EBITDA Margin: 15.6%

"A-HA! Look at that EBITDA margin!" you say, "They must be gouging!"

Well, the gross margin clearly says otherwise, and the five-year EBITDA CAGR is 6.6% - pretty much in line with inflation. Again, management is clearly bad at gouging.

❌ NO PRICE GOUGING AT KIMBERLY-CLARK ❌

"Well ok," you say, "I'm sure International Paper must be capturing all of that extra profit because they're the ones gouging then."

Let's take a look:

International Paper:
5-year avg revenue growth: 0.8%
2019 Gross Margin: 30.8%
LTM Gross Margin: 27.8%
2018 EBITDA Margin: 16.1%
LTM EBITDA Margin: 11.6%

Wowza, I guess IP is the worst price gouger of all since, well, they've basically been destroying value since before COVID began. You would think price gougers would be gouging to, I don't know, make more money and all. Well, IP made almost $3 billion of EBITDA in 2019, and a little over $2 billion over the last twelve months. Sigh.

❌ NO PRICE GOUGING AT INT'L PAPER ❌

So, maybe this means the inflation we've been dealing with hasn't been about corporate greed and price gouging after all. Maybe it has had something to do with, oh, I don't know, government spending and stimulus run amok or something.

So, rather than going on populist rants about implementing price controls for the greedy corporations (which, you know, have never worked out so well in the past), maybe we should consider some price controls for government spending.

That's a novel idea.

🤔

p.s. And for those of you who say "Hey, wait a minute, your receipt says "Bounty" - that's not Kimberly Clark, that's P&G! They must be price gouging!"

Procter & Gamble:
5-year avg revenue growth: 4.4%
2019 Gross Margin: 48.6%
LTM Gross Margin: 51.4%
2019 EBITDA Margin: 20.4%
LTM EBITDA Margin: 23.7%

Gross margin up? Yep. EBITDA margin up? Yep. Good management? Yep. Price gouging? Nope.

❌ NO PRICE GOUGING AT P&G ❌

[Massimo @Rainmaker1973]

This underwater upside down view of synchronized swimmers produces a surreal effect, to say the least

[📹 Fabio Ferioli]

[ESPN @espn]

It's the end of an era, but what a way to go.

Arizona walks off USC to win the Pac-12 tourney title. As it stands, this was the final sporting event ever for a conference that was formed more than 100 years ago.

[Senator Mark Kelly @SenMarkKelly]

The rich history and culture of Arizona tribal nations is one of the things that makes our state so special. I’m proud to deliver support that will help preserve that heritage for future generations to see and learn from.
https://t.co/HgINyxnHWU

[John LeFevre @JohnLeFevre]

Things I’ve Learned
What I wish I knew at 18…

1. College is mostly a scam

I’m glad I went to college, because I wanted to work on Wall Street. But today, I wouldn’t waste $300,000 on it, and I wouldn’t want to work in banking. Instead, I’d load up on college credits during high school, go to a school like the University of Texas to have fun, graduate in 3 years debt-free, and travel around the world for a year.

[Sean Kelly @seanpk]

Peter Thiel recruited Reid Hoffman, Chad Hurley, Sam Altman, David Sacks, and Keith Rabois. Also partnered with Elon Musk.

He's used these 4 questions time and time again to identify 20-year-olds who would go on to be billionaires.

Test yourself with these questions:

[Harvard Business Review @HarvardBiz]

Persuasion is an ancient art — but we do it every day. This formula from Aristotle can be applied in the modern workplace. https://t.co/plfNcVcFEN

[Harvard Business Review @HarvardBiz]

Building relationships and learning how to influence downward, sideways, and upward is pivotal to your career success. https://t.co/i1IALDku1y

[Harvard Business Review @HarvardBiz]

Don’t skip your lunch break, and don’t feel guilty about stepping away, especially when you are feeling stuck. Doing so may actually be the best use of your time. https://t.co/dkl3ScCkyv

[Crazy Clips @crazyclipsonly]

Dude shows off the invisibility shield he made

[Adam Grant @AdamMGrant]

Novices seek praise. Recognizing strengths builds confidence to keep going.

Experts crave criticism. Seeing shortcomings reveals avenues to keep growing.

Preferring corrections to compliments is a sign of skill. The better you get, the more determined you become to get better.

[Nick Huber @sweatystartup]

Don’t forget something very important about this life:

Your job is to train people how to treat you.

You get more of what you tolerate.

If you tolerate people being manipulative, you’ll get more of it.

If you tolerate employees being flakey and unreliable, you’ll get more of it.

If you tolerate verbal abuse, head games, drama and gossip you will get more of it.

It isn’t rocket science folks. People will do more of what benefits them and hurts you if you surround yourself with that type of person.

[Massimo @Rainmaker1973]

Arthur C. Clarke on BBC's Horizon in 1964, when he gave some astonishing predictions about the future.
https://t.co/edx6MdY3ex