📉 Interest rates vs. tech stocks – The Hustle

Residents of fast-growing Hoboken, New Jersey, will be voting today on a $241m proposal for a new high school building. Critics say the money could be better spent, though we have a feeling Hoboken’s youth think the proposed building — complete with a rooftop football field and indoor ice rink — is an absolute must-buy.
Today’s rundown:
Let’s do it.
In recent years, the face of innovation investing has been Cathie Wood and her Ark Innovation ETF (ARKK).
The fund — which includes hot tech names like Tesla, Roku, Zoom, Twilio, Coinbase, Square and Spotify — had a huge runup in the first year of the pandemic.
But the high-tech growth investing story has had a very very very ugly 2022, though. (Like, really ugly.)
… which is much worse than the 8% loss for the broad market S&P 500 index.
An even more interesting comparison is Ark and Berkshire Hathaway, Warren Buffett’s ~$680B conglomerate, which has significant stakes in much less sexy industries like energy, utilities, insurance, housing, and railroads.
Since the beginning of last year (2021), Ark is down 40%+ while Berkshire is up 30%+.
According to the Financial Times, the recent market gyration is a rotation from growth to value stocks:
… by the US Federal Reserve, which plans to hike interest rates and pull back on the loose monetary policy enacted to boost the economy during covid.
Higher interest rates will help to fight rising inflation. But it also historically hurts high-growth tech stocks.
Why? Because the valuation of these companies are based on future profits, which are worth less in a higher interest rate environment.
Today, the Fed begins a 2-day meeting to discuss the central bank interest rate and bond-purchasing plans. Depending on what they decide, things could get uglier still.
Too many orders: Ford cut off customer orders of its new Maverick truck, which starts at $20k, after surging demand exceeded its production capabilities. #ecommerce-retail
Fair warning: GM warned dealers against marking up its incoming EV models above MSRP, threatening to punish offenders by sending vehicles to other dealerships. #clean-energy
Anitian, a cloud security and compliance software startup, raised $55m in a Series B round led by Sageview Capital. #privacy
Crypto sell-off: Bitcoin dropped to $32,981.11, its lowest price since last July. #fintech-crypto
Sketchy practices: Google faces multiple lawsuits over tracking users even after they have opted out of location tracking. #big-tech
MFM: Sam and Shaan predict saunas and cold tubs will be as common as swimming pools in 10 years. #mfm
In 2015, a team of researchers at Northwestern and MIT analyzed 6 years’ worth of transaction data from 130k customers at a large national retail chain.
They found that ~25% of customers — known as “harbingers” — consistently buy products that end up flopping within 3 years. Think Watermelon Oreos, Frito-Lay Lemonade, or Cheetos Lip Balm.
Though harbingers’ purchase activity throws a wrench in sales forecasts, that doesn’t mean corporate America should attempt to ferret them out and ignore them.
Harbingers can teach us what doesn’t work. And sometimes, in business, that’s just as important.
Commuting, bad coffee, and awkward small talk are reasons enough to dread returning to the office. But the pandemic introduced a far greater concern — getting exposed to covid at work.
Phylagen, founded in 2014 by engineer and scientist Jessica Green, mitigates this risk with its pathogen-monitoring service.
… called Ecology, alerts employers to the presence of airborne illnesses in the workspace by collecting samples from high-touch surfaces (e.g., vending machine buttons, door handles, and toilet seats).
Workspace data is broken down by room, and the analysis not only measures if the virus is detected but also how high the viral load is.
The company says that this method of data collection has an edge over traditional testing: sampling from shared workspaces rather than swabbing individuals is both cost-effective and less intrusive.
The home office. In September, the company partnered with Scotch-Brite to launch a home cleanliness test kit to bring its data collection services to the WFH crowd.
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📺 On this day: In 1949, the 1st Emmy Awards occurred at the Hollywood Athletic Club. Winners included “Pantomime Quiz” for Most Popular Television Program.
👾 Wow: This guy turned his coffee table into a functional, playable pinball machine.
💻 Useful: You can use Nimbus for photo and video screenshots. It even works while scrolling.
How to: People wait in lines at cafes for pour-over coffee. Experts explain how to do it yourself at home.
🧱 That’s interesting: Everything you’ve ever wanted to know about robot bricklayers and why, despite efforts dating back to the 19th century, we don’t have them yet.
🎺 Haha: And now, playing a trumpet into a bowl of Jell-O.
Buckle up. (Source: Twitter)
Hey. Stop keeping us a secret.
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Your referral count: {referral_count}
Laptop lookin’ sparse? Water bottle lookin’… clear?
You’re only {5-referral_count} referrals away from your first Hustle swag, Sam’s Stickers. Slap a few of these bad boys on the ol’ laptop and let everyone in the coffee shop know that you know. You know?
Spread the news. Help us grow 🌱
Or copy this custom referral link: {referral_url}
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Look at you, smarty pants. You’ve already shared The Hustle with {referral_count} friends and enemies.
But hey, just because you’re a business nerd doesn’t mean you can’t enjoy a cool bevvy. Get {10-referral_count} more referrals and we’ll send you a pint glass etched with The Hustle logo.
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Or copy this custom referral link: {referral_url}
Your referral count: {referral_count}
You’re only {15-referral_count} referrals away from earning our signature dad hat meant for ladies, gents, and dads alike to show folks they’re in the club.
Spread the news. Help us grow 🌱
Or copy this custom referral link: {referral_url}
Your referral count: {referral_count}
You’re close to the most coveted item in Hustle-land: The Always Be Hustlin Tee.
The fabric? Luxurious. The cut? Relaxed, yet refined. The message? Indisputable.
Share this link with {25 – referral_count} more of your friends to get the goods:
P.S. You can always check your referral count here.
Damn, you’re on a roll. You’ve got the pint glass. You’ve got the hat. It’s time to complete your collection, don’t you think?
Get {35 – referral_count} more referrals and we’ll send you our favorite piece of Hustle swag: The Startup Sweatshirt. Slipping into this piece of fleece might just transport you to Silicon Valley (or maybe somewhere better, your pick).
Share this link to get the goods:
P.S. You can always check your referral count here.
Hey, we see you. You’re out there spreading the gospel of The Hustle like it’s nobody’s business. Seems like you might be ready for a little more…
Get {75 – referral_count} more referrals and we’ll slide you a free subscription to Trends.
And no, this ain’t an ad. We just think you’re the kinda person who would thrive in our top-tier community (it’s usually $299) full of founders, investors, and builders (AKA ambitious, no B.S. business folks like you — and enjoy our premium research and content.
Here’s that link you’ll need:
P.S. You can always check your referral count here.
Well, well. Look who climbed the ladder. We’re so proud.
You seem like the kind of person who knows how to work a network. Your beast-like qualities have granted you an opportunity to bag The Hustle’s grand prize.
Get {1000 – referral_count} more referrals and you’ve got yourself a meeting with Sam Parr, founder of The Hustle. You might recognize him from the My First Million podcast. He loves that you love his good ol’ newsletter, and wants to treat you.
Lunch, brunch, linner, dinner, drinks. Feel free to get creative.
You’re just {1000 – referral_count} referrals away. The final boss awaits.
Here’s that special link one more time:
P.S. You can always check your referral count here.
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