#48 - Warren Buffet's latest $10B bet, Kanye West 2020, Uber sending jobs to India, and Apple iOS 14 exposes privacy issues and developer opportunities.
In this week’s episode, we cover whether Warren Buffet’s most recent $9.7B investment in Dominion Energy means the bottom for oil & gas. (1:00)
We discuss how Kanye’s presidential announcement for 2020 still matters for the stock market regardless of what paperwork he has yet to submit. (5:00)
How COVID has renewed the idea of offshore talent and what that means for millennials. (17:30)
Lastly, we talk about antitrust, privacy, and possible business opportunities created with the new features in iOS 14. (21:45)
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* scroll to the end for a summary of predictions and a podcast recommendation.
💰 Berkshire Hathaway buys Dominion gas assets in a $9.7B deal.
Dominion Energy has scrapped a large pipeline project and sold its natural gas transmission business to Berkshire Hathaway, marking a big shift towards cleaner energy for the US utility — and another bet on fossil fuels by Warren Buffett.
The deal for Dominion’s gas assets gives Berkshire Hathaway Energy, a unit of Mr Buffett’s parent company that already runs a $100bn energy portfolio, ownership of almost 8,000 miles of natural gas transmission lines, and transport capacity of almost 21bn cubic feet a day.
The transaction also includes considerable storage facilities and partial ownership of the Cove Point LNG terminal, one of only six LNG export facilities in the country, which Berkshire Hathaway Energy will operate. Link
🇺🇸 How Kanye’s bid for president could matter to the stock market.
A controversial opinion is that Kanye could steal votes from Biden in important swing states and give Trump a fighting chance at re-election.
If that doesn’t happen and Joe Biden becomes President his planned tax reform would reverse a lot of Trump’s cuts and likely be reflected in public markets.
“I’m going to get rid of the bulk of Trump’s $2 trillion tax cut,” Biden said, “and a lot of you may not like that but I’m going to close loopholes like capital gains and stepped up basis.”
The Tax Policy Center calculated that almost 93% of the tax increases would be borne by the top 20% of households. The top 1% — those who make more than $837,000 — would see their tax burden jump by nearly $300,000, a roughly 17% reduction in after-tax income. Link
Biden also said he would raise the corporate tax rate to 28%, which he said would raise an estimated $1.3 trillion over the next decade. The Trump tax cuts had shrunk corporate taxes to 21% from 35%. Link
🚕 Uber to shift more engineering jobs to India.
Needless to say, Coronavirus has disrupted a lot of businesses that are now looking to cut costs and pivot to more profitable areas including some of the biggest technology companies on earth.
For example, yesterday Uber confirmed that they are buying Postmates for $2.6B in a move to expand their food delivery footprint.
This makes sense if you look at their last quarterly earnings results, the Uber Eats business grew 52% and managed to somewhat offset a big decline in its ride-hailing revenues.
Uber isn’t stopping there, when Dara Khosrowshahi became CEO of Uber three years ago he agreed to a compensation package largely tied to the performance of the company.
While he did leave $180m in Expedia options on the table he would be awarded 1.75m Uber shares should the company hit $120B valuation.
Knowing that it’s no wonder he’s already managed to move 600 jobs or 15% of their engineering team to India.
Between this offshoring trend and Trump suspending H1-B visas until December, this is great news for Canada.
🍎 What you need to know about iOS 14.
Apple has addressed some serious privacy concerns with its next update:
You no longer have to give apps your exact location.
You get to pick which photos an app has access to.
You’ll know when your microphone or camera is in use.
This update is also significant because they are opening up their products in five new ways.
They’re adding Safari WebExtensions API on macOS
You will be able to set default email and browser on iPhone and iPad
New enhanced controller support
Nearby Interaction framework for U1 chip
Find My network accessory program
Other Top Features: Widgets; App Library; App Clips; Pinned conversations in Messages; Translate app; Picture-in-picture video; Bike and electric vehicle routes in Maps.
The developer beta is out already but you have to be a registered developer with Apple which costs $99/yr.
Apple skirts antitrust allegations and avoids being broken up.
Kanye makes a serious run for president in 2024.
Advertisers will all come crawling back to Facebook.
If you’re headed on a road trip this summer check out the podcast series Blowback.
From their website: “Blowback is a 10-part podcast investigation into the war, the decades of policies that led us to destroy Saddam Hussein's government, and the aftermath of the American invasion.
Co-hosts Brendan James and Noah Kulwin examine the ways in which the American government interfered in Iraqi politics long before we ever put boots on the ground, and why America turned on Saddam Hussein, the U.S. government's former favorite strongman in the Middle East.”
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p.p.s. This week’s riddle:
I'm obsessed with attention, a hit reality show is a dream.
I'll spend whatever it takes, refusing to fail, this race is a red queen.
You don't know it yet but I'm raising my prices, someone has to pay for it. You know… the 180 million times Cramer will say... "He's a reasonable man Jerry, but he's insane!"
Look out for this newsletter early next week for the answer.
Answer from last week: 5G
Enjoy the rest of your week!