Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
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The Big Short’s Michael Burry Explains Why Index Funds Are Like Subprime CDOs by Reed Stevenson (Bloomberg)
One of the most well-known benefactors of housing short trades sees index funds as the next big problem for markets, citing liquidity mismatches and structuring as the key problems for investors. [Link; soft paywall, auto-playing video]
Debunking the Silly “Passive is a Bubble” Myth by Ben Carlson (A Wealth Of Common Sense)
The prior story about indexing gets a forensic treatment from Carlson, who does a great job pointing out the absurd hyperbole surrounding index funds. [Link]
The Time Netflix Considered Selling Itself to Amazon for Peanuts by Marc Randolph (WSJ)
Back in 1998, the now-giant streaming service was on the ropes as an order-by-mail DVD rental business, and it briefly considered a sale of its business to the nascent Amazon empire. [Link; paywall]
Waze Hijacked L.A. in the Name of Convenience. Can Anyone Put the Genie Back in the Bottle? by Jonathan Littman (LA Mag)
How the traffic app started off giving Los Angelenos a god-like power over their commute, but has since led to dead-ends by snarling streets with traffic and prompting pushback from the neighborhoods turned throughfares that Waze pushes traffic through. [Link]
Quality Stocks Are an Overcrowded Trade by John Authers (Bloomberg)
Stocks which have attributes broadly grouped into the basket of “quality” have been outperforming, but are their gains sustainable? [Link; soft paywall]
The Collector: 1977 WSJ Article on Buffett Strikes Familiar Themes (The Rational Walk)
A blast from the past with quotes from Warren Buffett much earlier in his career, offering a remarkable degree of consistency in his views about companies over the years. [Link]
A Breakthrough for A.I. Technology: Passing an 8th-Grade Science Test by Cade Metz (NYT)
In Seattle, a lab has developed an AI capable of scoring 90% on an 8th-grade math test and more than 80% on a 12th-grade exam; that’s a remarkable breakthrough in natural language processing that clobbers efforts made by hundreds of teams as recently as four years ago. [Link; soft paywall]
Fraudsters Used AI to Mimic CEO’s Voice in Unusual Cybercrime Case by Catherine Stupp (WSJ)
Using software that allowed them to duplicate a CEO’s voice, scammers were able to direct one of his subordinates to transfer a six figure payment to a fictitious supplier. [Link; paywall]
All the Greedy Young Abigail Fishers and Me by Jia Tolentino (Jezebel)
A fascinating look at the industry of tutors who work to get their higher income peers into high status colleges with that perfect essay or personal statement. [Link]
Meet The Man Who Guards America’s Ketchup by Dan Charles (WFAE)
Assuring a consistent taste and quality in America’s ketchup supply is an important job, and it falls to a man Kraft Heinz refers to as their “Ketchup Master”. [Link]
The ridiculous reasons rich New Yorkers no longer buy penthouses by Christopher Cameron (NY Post)
With super-thin buildings pushing dozens upon dozens of stories high, the ultra-lux penthouse is no longer as attractive to buyers who don’t like the excessive height of the tallest floors. [Link]
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Have a great weekend!