As mentioned here in the CBS News YT video – “Breaking down the Apple antitrust lawsuit”.
iMessage vs text message. I noticed some issues in the group text messages in the past: for example, I can not add someone on Android to a group text. If one of the member in the group text is on Android, we need to resend via text message (default is iMessage), and so on.
Recently I asked my daughter (14 year old) about the group text chat as well, and she said: we prefer iPhone, but we don’t exclude Android people too 🙂 I guess they are the inclusive generation.
This reminded me of the CAD interoperability product: I worked on long time ago, it translates from competitor’s file format to ours. Also around the time, I recall it was very hard for us to compete in the 3D CAD market place (we were No. 2 in terms of market share). And our executive’s marketing strategy: we are more open (than the big bad No. 1 guy). See some similarity with Apple here? 🙂 Btw, I recall it was not easy to develop the translator, both from technical and business perspectives.
I had to admit I am not a legal expert. But one thing to note this is not isolated to Apple. This Yahoo Finance article Justice Department files antitrust suit against Apple has a graph says Regulators vs Big Tech that summarized all the US regulators actions against the big tech currently.
Walter Isaacson: The law says you can’t use market dominance to then dominate an adjacent field (YT Video): I was in the Mossberg camp until Walter mentioned the “dual mandate” of DOJ/FTC regarding the anti-trust laws: protect both competition and the customers. In terms of competition, he said, a company that uses its dominant position to get dominance in tangential areas, that company may have violated the law.
Some of my thoughts on the topic in Chinese (linkedIn)
很多年前在一个CAD/PLM 软件公司打工。我的东家在三维CAD行业里是老二，有一段时间公司很紧张，因为汽车行业里面除了美国通用汽车有不少公司要换老大的软件：福特说要换，丰田后来还是选了老大的软件（世界上最大的两家飞机制造公司也用她家的），尼桑（日产）是我东家非常想保住的客户。后来我们那里的人想到一招：就说我们比她们更open, 她们是封闭的（就像今天美国司法部的AT部门的人说的那样）。题外话：大概也是二十年前，苹果用我们的软件设计她们的产品，她家当时的当家花旦是iPod. 前提是我们的三维设计软件在她家的Mac 上运行。#DOJvsApp || Back to software or more broadly the technology business, building better #mouseTraps or #moat if I could use #warrenBuffett words, is one important measurement of success #yardstick
My 1st gen AirPods lasted about 2 to 3 years. I used the 1st gen AirPods pro, https://t.co/8s7Aufjbzu, before giving it to my daughter recently. I've using my 3rd gen AirPods for a year now and liked it, https://t.co/EWTCjMB2qd
Another headset or headphone that I use is this one from Costco – Bose QuietComfort 45 SE Noise Cancelling Over-the-Ear Headphones, it’s selling for $170 now (much cheaper than what I paid for). For longer time wearing, I prefer the AIrPods 3. Bose does have some advantage though, for example, in cold weather, it could double as an ear muffs.
(04-09-2024) Change Healthcare faces second ransomware dilemma weeks after ALPHV attack || So in summary, ransomware attack poses two threats: 1) Loss of data, if they bad guys encrypts the data; 2) Leak of data, in the case a company or an organization (the victim) restores the data from backup (without paying the attacker), the attacker can threat to leak the data online (or sell the data to other bad guys in a black market etc.), so basically this is what happened here.
(Update 03-24-2024) It seems Panera Bread, which probblay has 2,000 stores in the US, had just experienced a similar issue.
As far as I know, it's been down now for at least 2 days. I was trying to use a BOGO 50% that was loaded on my app but couldn't get it yesterday morning & they told me to come back later – I did & still down. Then tried to call their CS ph# & hear message that they're unavailable
Panera Bread app and kiosk down since 03-23-2024 afternoon
PSA: Panera system is down nationwide now: the mobile app and the kiosk don’t work. But the register still works, I think. I am at the new u city all digital store and it’s full outage. || WiFi is down too so I am using iPhone as hotspot 😀 https://t.co/cIEwKLRNFT
Note it was not in the mainstream news at least not covered heavily in the network TV and so on, initially. Until its impact are felt by both providers and the patients. Below are some more recent coverages.
Change Healthcare has acknowledged the hack, which reportedly affected billing and care authorization portals. It’s led to prescription backlogs and missed revenue for providers, posing potential threats to worker paychecks and even patient care.
“Our experts are working to address the matter, and we are working closely with law enforcement and leading third-party consultants such as Mandiant and Palo Alto Networks on this attack against Change Healthcare’s systems,” Change Healthcare said. “We are actively working to understand the impact to members, patients and customers.”
(My take, lesson learned: cyber security best practice; collect the data that’s only necessary)
UnitedHealth Pays $22 Million To Ransomware Group Behind Change Healthcare Cyber-Attack: Reports https://t.co/bHb8mAUceK "The Russian-speaking cybercriminal gang known as AlphV and Blackcat claimed responsibility and said on its darkweb site that it exfiltrated 6 TB of data in…
“The Russian-speaking cybercriminal gang known as AlphV and Blackcat claimed responsibility and said on its darkweb site that it exfiltrated 6 TB of data in the attack against Change Healthcare.”
This Change Health incident somehow reminds me of the SolarWind hack a few years ago. It seems Microsoft has some more work to do, as they are still a popular target for hackers.
“The tradecraft was phenomenal,” said Adam Meyers, who led the cyber forensics team that pawed through that tainted update on behalf of SolarWinds, providing details for the first time about what they found. The code was elegant and innovative, he said, and then added, “This was the craziest f***ing thing I’d ever seen.”
The hackers didn’t do anything fancy to give them the domestic footprint, officials confirmed. In fact, they just rented servers from Amazon and GoDaddy.
SWI stock has not done too much in last 5 years mostly due to this attack.
Also the Kronos attack which received less media attention (somewhat similar to the UnitedHealth hack). I recall this incident because around at time I was working on a Kronos based project (app, the official name of the app is Ascension Nurse Center of Excellence). It didn’t work out due to various reasons, after the company sunk millions of dollars on the project.
Legality aside, paying the ransom encourages the hackers? See also Incident Of The Week: Garmin Pays $10 Million To Ransomware Hackers Who Rendered Systems Useless. But from a business’s perspective, they are usually between a rock and a hard place: meaning if they don’t pay, they usually don’t know how long it will take them to recover the data, if at all; or if they pay up, they essentially are working with the bad guy (or encouraging the bad guy).
Can we ever negotiate or trust the hackers (the bad guys)? || This somehow reminded me of my personal experience when I was working for one of the major credit card company (their loyalty and rewards platform), and at one time I was assigned to investigate the root cause of an incident in which the bad guys (or girls) logged into some cardholers’s loyalty redemption website quickly after the website launch, and redeemed their points for air tickets or hotel bookings. At the time, amid the tedious work, I asked myself: how come in this world there are evil people like that?
Another question I had for the UnitedHealth Group (Change Healthcare) hacking: if this is the notorious Russian hacking group BlackCat, can the US government do something about it (hint: retaliation)?
Stocks that I hold on for too long: RIVN, “hold on the loser, sell the winner” is the opposite of what I wanted to do.
Some of the things I am going to try
Delete the mobile apps (so far, deleted TD Ameritrade and Vanguard app)
Consider using less Robinhood and ThinkOrSwim (kept the latter as TD Ameritrade accounts are transferring to Schwab post the acquisition)
Do more reading and have a more focused as well as longer term portfolio – companies such as BRK, or companies that have some dividends that can potentially drop less or have less volatility during a bear market
Colyte Jug – mine is similar – prepping for the liquids and drinking it is quite some work (the day before)
Colonoscopy is a routine exam recommended by doctors for adults over 50 in the USA: as a precaution checkup for the signs of colon cancer. 在美国一般医生会建议50岁以上的人去做一次肠镜，以检查是否有肠癌的迹象。I heard colon caner is among the top two cancer in the US. I did mine at Mercy St. Louis – it’s the hospital both my girls were born and I also worked for Mercy in the IT department for about 18 months between Nov 2013 and May 2015.
It takes some efforts and courage to take the exam. First some Overview by Mayo Clinic. Also, it’s not the only way to detect colon cancer. There are 2 ways. Both have pros and cons. I did this Fecal occult blood test about 13 or 14 months ago, partially because it’s less invasive, and partially because my doctor then is also a bit soft spoken, and he agreed. This time I am not this lucky. I got a new doctor and when I mentioned testing for colon cancer, and he directly chose the colonoscopy.
Prep
The doctor performs colonoscopy will usually provide the prep instructions. Alternatively, because this is a quite common procedure, there are lots of resources online: I shared some below. One common question is the low fiber food before and after (see below), also the liquids to drink the day before, as well as the special medicine (liquids) to drink about 12 to 15 hours before the procedure.
I did drink some chicken broth (sold at Costco): I drunk a few cups. I added a bit salt to the broth and microwaved it. I also drunk coffee and sprite that day, because I need to start the Colyte liquid (prescribed medicine, power mixed with water, see below) at about 3 pm my time (due to my schedule). I took a break between 6 to 8 pm, and resumed it until about 11:30 pm to consume about 3 L (or 2.75 L to be precise). I finished the rest in the early morning before procedure.
Today I went. The results are out and they seemed good.
Btw, the GI lab at Mercy seems quite busy, and they are a few steps and a few things to keep in mind (or tips, if I may).
They have a sign says don’t bring any valuables. I understand where they come from, but if you think you like to read on phone, I say bring it (I didn’t bring, and was somewhat bored during my about 45 minutes wait in the waiting room/bed). Don’t take any picture or videos due to privacy concerns.
I noticed I may not be the youngest in the patients group. Obviously they are people who are a bit older. And they seems to be people who are younger than me as well. I did see a lady brought her phone.
The anesthesia: I believe this is the 1st time I was knocked out completely. The drug is actually is from the needle, rather it’s from the IV infusion (挂盐水/葡萄糖), which I did recently (see this American Healthcare System II – 美国医疗系统之二). Btw, it’s a smaller punch or less pain for me this time, as the nurse put the needle at a spot that’s better, I guess.
Serious matter/Q: do you have a will or living trust?
I got this question asked many times. I actually started this “will” process but my wife didn’t sign. Later I learned Warren Buffett let his wife and kids view the will before official. Probably something I will do too as my 13 (soon to be 14) year old can understand some of that.
Most time seems to have been spent on waiting. Fairly routine procedure. Felt a bit drowsy after being woken up. But I feel I can drive after probably 4 hours of this. Again a smart phone may help, if you have the energy. Or just rest instead of doom scrolling 🙂
The people and humor
“You got another 10,000 miles” (this is actually from nurse at primary care office, after the annual physical)
“Just take a nap” (today’s nurse, referring to the anesthesia).
“What you want to eat after this? (a big meal :-)”
Because usually people were on the “liquids only” food the day before. And no food on that morning. || My answer: I am going back to the low fiber diet as I read it from What to Eat After a Colonoscopy
I think it’s always the people and the humor made the difference.
PS
Why Mercy: in St. Louis area there are a few large hospital chains, in the order of size, they are BJC, Mercy, SSM and St. Luke’s (not to be confused with the Kansas City St. Luke that’s going to merge with BJC), respectively. BJC (and Washington U Physicians) is nationally recognized, and it appears their service sometimes could be a bit expensive than others (not quite scientific, just a recent observation). Mercy is the closest for me, and it also has some unique strength. For example, they were the 1st to using Epic EMR in the region. A while ago I worked at MyMercy patient portal, and now I got to use it as a consumer (customer). Btw, the patient portal is based on MyChart. BJC is also using Epic software now. And both BJC and Shriner Children’s hospital used MyChart. One thing though: each MyChart is standalone, you cannot share credentials between the different hospitals.
Back to the topic, I think the prep part: both physically and mentally is the hardest part. The low-fiber diet, the liquids only diet, and the colyte (too much water to drink in a short duration of time). Then there is this unknown part of “short nap” 🙁
Digital wallet and credit card expiration and automatic extension
Investopedia : What Is a Digital Wallet? Also quote Investopedia
There are several digital wallets available. Here are some of the most well-known:
Cash App Apple Pay Google Wallet Samsung Pay PayPal Venmo AliPay Walmart Pay Dwolla Vodafone M-PESA
Personally I use Apple Pay(in store) and PayPal (online stores). I know some investors or speculators like to dunk on the PayPal stock $PYPL. But I noticed in recent years that both Apple Pay and PayPal do CC renewal (extension) automatically: at least for the Chase CC. This is good – one less hassle. When you think about this automatic renewing feature: it’s very similar to the “opt-in” feature in some of the apps or websites.
On the contrary, credit card stores on e-commerce website (let’s say MSD or Spire Gas company payment section is also e-commerce) usually just let the stored credit card expire: from Amazon to Panera. Basically if we want to use the credit card again, we need to either edit or delete/re-add the card.
Apple Pay
For me I didn’t use Apple Pay extensively until I got the Apple Watch. I saw it first hand at the “Daily Grind” coffee shop at Mastercard O’fallon campus: I noticed my colleague was paying via Apple Watch. One thing I didn’t try: I may try next time if I get a chance, I heard the campus only accepts Mastercard. So what if I pay via a Visa card on Apple Watch? 🙂 Anyway I pay mostly via Apple Watch nowadays at grocery stores: Aldi, Dierbergs, Trader Joe’s and Schnucks. One more tip: for PayPal, I encourage you set up multi-factor authentication (YT Video).
I have used the Square (now Block) Inc’ Cash App and Google Pay in the past too. I liked Cash App. It seems to me Google Pay (chrome web browser version) seems a bit half baked for me 🙁
Back to the credit card expiration, I noticed, on many automatic payment websites, e.g., MSD, CCRC and the J etc., I need to manually update the expiration date or re-type in the CC information on their website. This is okay, as I don’t have to a ton of places to update. Although I appreciate if they can just automatically update themselves. I had some glitches with MSD website after updating the card – had to try a few times to make sure the auto pay is still setup and work as intended.
This reminds me of the e-wallet for kids. We have seen those in the Scholastic book fair at school – e-wallet for teachers or kids. However, debit card or Apple Pay (on Apple watch) has much wide usage.
Kids debit card or CC
I found Chase offers a kids debit card. There is a caveat though: I found I cannot fund the account online. So I still need to stop by the branch sometime to put in some money there so my 9 year old can use at her Dragon Den (LFGCPA spirit wear/swags store) this fall 🙂
Also I noticed Amex offers CC (additional cardholder) to kids 13 and older. I gave my 13 year old this card. Btw, not too long ago, she had it lost from theft. Amex texted me right away – and I was able to remediate quickly. Thinking this is somewhat like safety or security feature: I mean shopping credit card. It provides a digital trace. For example, I know at which store my card was being used.
Don’t lock in the foreign exchange rate
Use credit card internationally: make sure use no foreign transaction fee card; no need to lock the rate – it will be more expensive to pay the fees for “locking the rate”. Many years ago in Shanghai, at the Courtyard Xujiahui – I locked the rate after the receptionist 店小二 told me about this feature, and later on I realized the rate (the fees) is not favorable to me.
I used CC in Shanghai in 2016, as well as shopping at Amazon Germany store (and maybe, Amazon Canada, and some other online store in UK), and I chose not to lock in the rate from then the Courtyard Xu’jia’hui stay.
Note in China, the Visa, Mastercard, Amex and Discover credit cards are not widely accepted. The most popular payments methods in China are Alipay and WeChat Pay. It seems from the Merchant perspective, the latter 2 are much cheaper (source: X).
This got me thinking, what is Stripe’s annual revenue? Per Backlinko: Stripe’s gross revenue reached $14.4 billion in 2022. So the math is 100 / 14400 = 0.69%
Last but not least, make sure you get a “no foreign transaction fee” credit card: Chase offers quite a few cards with this feature, namely, Chase Sapphire Preferred, Chase Amazon and Chase Hyatt. Amex Gold doesn’t have foreign transaction fee either.
The shareholder letter and 2023 annual report PDF file here. Quote the letter, page 5
Our goal at Berkshire is simple: We want to own either all or a portion of businesses that enjoy good economics that are fundamental and enduring. Within capitalism, some businesses will flourish for a very long time while others will prove to be sinkholes. It’s harder than you would think to predict which will be the winners and losers. And those who tell you they know the answer are usually either self-delusional or snake-oil salesmen.
====== At Berkshire, we particularly favor the rare enterprise that can deploy additional capital at high returns in the future. Owning only one of these companies – and simply sitting tight – can deliver wealth almost beyond measure. Even heirs to such a holding can – ugh! – sometimes live a lifetime of leisure.
====== We also hope these favored businesses are run by able and trustworthy managers, though that is a more difficult judgment to make, however, and Berkshire has had its share of disappointments.
Warren did not use the word enduring here. I think he meant companies that have enduring competitive edge 竞争优势 when he said “……rare enterprise……”, or the “moat” 护城河 which was frequently talked about/used in the past shareholder meetings. By the same token, in investing we are looking for an enduring company.
Warren’s grades for the subsidiaries and companies that BRK has Equity Stakes
If I could summarize what Warren said about the subsidiaries and the companies that Berkshire Hathaway equity stakes. He is what he said basically insurance is doing good, BNSF is doing okay and will probably be okay in the future. He was not that sure about the Berkshire Hathaway Energy BHE, mainly due to the unknown regulatory risks such as the capped rate. As a capitalist, he expected to recoup the investments and then some. But for the BHE (electricity utility co.), because the regulators limit the rate they can charge, he was not sure BHE can get the money back from all the investments in green energy (wind, solar) and power transmission.
For companies BRK has equity stakes, he basically “praised by names”: they are American Express and Coca-Cola. Both are companies born in 1800s. They have enduring competitive edge. I guess this is true even after the recent Capital One /Discover merge. Amex is in a such a unique position in the market, and they are not afraid of Visa and Mastercard either.
American Express Rose Gold card
Warrren praised the OXY, its CEO Vicki and the US oil industry as well.
Companies that has long history or decent history
I noticed in the US there are companies that has long history or decent history. Many of them are family controlled or started by a family (or two, in the case of Leggett and Platt, Wikipedia entry here). In a way Anheuser-Busch the beer giant was like that too. But now AB is a part of AB InBev. Over the time as companies go public (traded in the stock exchanges), the families will gradually sell off the stakes, and eventually they don’t have the control or majority ownership. I think the few companies that families still have control included Ford. Also Berkshire Hathaway will selectively provide a home for those families owned business too, include the one in recent news – Pilot Travel Centers.
Below some of them have STL connection (HQ).
ADM: they had an accounting scandal recently. That’s bad.
I traded the stock around that day. I sold it on the 2nd day though.
Bunge: first saw their North America HQ at west port, probably in year 2008. On its Wikipedia entry, – I noticed this company have long history. They are in similar business as ADM (food processing, some call them agri business). Note Monsabto is in that business too. STL has quite some agri business.
Founded 1818; 206 years ago; Amsterdam, Netherlands
Founder Johann P. G. Bunge
Somewhat related to John Deere, I noticed #Bunge moved its HQ to St. Louis in the last few years – https://t.co/H1s6Fq7xgG (they are also in the agriculture business, more on the processing side). I noticed their old North America (or USA) HQ near westport, about 16 years ago /6
Noticed the company HQ and company history of John Deere, Bunge and BRK
Berkshire Hathaway: nothing to add (this is a common phrase Charlie Munger used to say in the annual shareholder meeting).
Emerson Electric: this is St. Louis based company, and they recently sold the climate control business (White Rodgers and Sensi brands) to private equity, and the PE firm rebranded it as Copeland. Meanwhile Emerson continues to focus on industrial automation (compete against Rockwell Automation, Siemens etc) , and other business.
GE: 100+ years, in the progress of breaking up. The healthcare unit GE Healthcare is already being spun off, and its stock has done well so far.
IBM: 100+ years, sold or spun off some low margin business, still going strong recently.
Jack Henry and Associates: blog post (same blog post below for Leggett and Platt). The only tech public company HQ’ed in Missouri. Found in 1976, same year Microsoft was found.
Leggett and Platt: It seems they will have some tough time this year due to the consumer slowdown of beeding products (their main products). The company has a long history and is based in Missouri. I sold the stock recently, btw. My Blog post – Dividend Based Investing.
Twitter thread below. I have quite a few threads on this actually. But I am posting the last one here only. It seems the US consumers are tapped from year 2023 (and until now Feb 2024). I do expect some sort of recession for those consumers. This will impact consumer products companies such as Polaris too $PII (no position at this time).
Found one #dividendYield chart for $LEG: https://t.co/mNXqNcnKKU || For the dip at each quarter, it seems was caused by #exDividend. From visual the average dividend for $LEG is about 4%, and right now 6.95% yield seems juicy: obviously, the potential risk is the stock price drop
Btw, I sold the Rivian stock $RIVN on the same day I sold all the remaining shares of $LEG too. EV seems like the traditional car business, and similar to the airline business. They are both very hard to survive, and almost impossible to thrive in those businesses.
A related note is in the large commercial air planes space, there are only two players AirBus and Boeing $BA. And yours truly has a few shares of $BA at this time. And we cannot say that for EV. Tesla is obviously big in the USA, but in China BYD has just beat Tesla. And then there are also the legacy car makers, including the all mighty Toyota Motors, whose hybrid is taking the wind from the EVs now.
Macys: May Department store (Famous Barr). I heard they rejected PE’s take private offer. Long term I don’t see they survive. I recall we played with our soon to be 14 year old at Macy’s (hide and seek, when she was probably 2 years old). She could no longer remember. She shops at Aerie (American Eagle Outfitter), Hollister (a brand under ANF), and H&M instead.
Monsanto: bought by Bayer, operate as a part of Bayer Agri Science, and involved in lots of lawsuits on roundup (the lawsuit existed before the acquisition).
Sara Lee: Wikipedia. Came across it today as I saw people talked about its former subsidiary Hanesbrand. It looks like Sara Lee itself is broken up now: it split into the US business and European business, and the companies names also changed. They still kept the Sara Lee brand for bread. I used to have a roommate worked for Sara Lee in year 2007.
A side story: my 9 year old didn’t remember the brand name because of their font.
PS: in this year’s annual shareholder letter, Warren used his own little sister Bertie quite extensively, which is a good thing because he wanted non financial/accounting professionals to understand the business. He always paid tribute to Charlie Munger, who has the best 30 seconds brain in investing. Charlie does have other good attribute and skills too, e.g., he is a real architect (designing his own house, for example). And he did steer Warren towards the value investing in companies such as See’s candies and Coca Cola.
Coca-Cola can and drink (exaggerated)
Last but not least, I wrote a X thread yesterday on similar topic.
#BerkshireHathaway 2023 annual report (and #WarrenBuffett 's letter to shareholder) is out – https://t.co/VobyFbo5ML || I am reading it now, before reading others' comments. It seems I won't go to #BRK2024 at Omaha this year. Hope next year I can go. /1
First, some background: I missed a few checks from Delta Dental of Missouri and a mortgage company in last few years. I was able to remediate the issues later. First I located the unclaimed checks (years later), then I called Delta Dental and they issues new checks to me. In the case of unclaimed check from mortgage company, I notice the letter of “unclaimed property” from Cenlar – Central Loan and Administration Reporting recently, and filed claim online. Mainly they were asking: do you want the money or not, it not we are going to turn over the money to the goverment “unclaimed property” account. This time I immediately filled out the form, took a picture and emailed the form to the given email address. A few weeks later, the new check arrived (probably the original check was in year 2021 🙂
Again tips: don’t throw away the mails from Delta Dental and Cenlar, especially their checks 🙂
Then yesterday, the bottom fell out. I realized that I made the dumb mistakes managing my mails again. Last night I opened a mail from the school district: I was almost a month late opening it. It was for my daughter’s NJHS invitations. I need to do better – I improved a bit recently but there’s still room for improvement.
I made the dumb mistakes managing my mails again. Last night I opened a mail from the school district: I was almost a month late opening it. It was for my daughter’s NJHS invitations. I need to do better – I improved a bit recently but there’s still room for improvement.
I forgot to open the mail from school district promptly, similar to my earlier mistakes on Delta Dental and Mortgage escrow account check mails
I was trying to sell things on eBay recently to address both my cluttering and hoarding issue, trying to declutter and make life simpler, and hopefully enjoyable. At the same time I really need to start from the very basics, e.g., address the mail issue first, and make sure my working desk is clean, and so on.
A related topic is dress for success (this is for everyone, man, woman, LGBTQ+, everyone really: this used to more important if we talk about work in an office environment. Personal hygiene, your posture, your body language and grasp of English and so on. But we still need to pay attention if we go to Zoom, turn on video, make sure we are professional. There is extreme example, such as the one below.
Reading Time: 5minutesA tweet I saw yesterday 02-20-2024 regarding the $COF $DFS merger
Writing from my experience on credit card both from consumer (outside) and business (inside) perspective: meaning encourage more usage of the card via loyalty and rewards, make sure the card is on the top of the deck etc. I also understand Americans are addicted to the credit card to a large extent. Full disclosure: between 2015 and 2019 yours truly worked for the Mastercard loyalty and rewards department on Biz Ops (production support, Site Reliability Engineering, and product support), and Application Development (software engineering).
Note I call them merger instead of outright acquisition, because it’s essentially a 60/40 all stock transaction. Meaning the Capital One shareholders will get 60% of the combined company, the Discover shareholder will get 40%. While it’s not 50% to 50%, I think it’s close enough for merger.
CNBC (Hugh Son) – Here’s why Capital One is buying Discover in the biggest proposed merger of 2024
The deal, if approved, enables Capital One to leapfrog JPMorgan as the biggest credit card company by loans, and solidifies its position as the third largest by purchase volume. — Personally I am not ready to give up my CSP card for the Capital One Venture card.
‘Holy Grail’ But it’s Discover’s payments network — the “rails” that shuffle digital dollars between consumers and merchants, collecting tolls along the way — that Fairbank repeatedly praised Tuesday when analysts queried him on the strategic merits of the deal. There are only four major card networks: giants Visa and Mastercard , then American Express and finally the smallest of the group, Discover. (I agree 100%. Credit card network is just like a financial highway. Not toll free. Most everyone has to pay. 信用卡网络就像一个收费的金融高速公路。)
NBCNews – Capital One-Discover merger could put a bigger squeeze on credit card users, experts warn – Many of the largest credit card issuers already charge steeper rates than smaller ones.
The average credit card interest rate in the U.S. is 24.61%, according to LendingTree, the highest since the credit marketplace began tracking monthly rates in 2019. I felt for those cardholders who pay 24.61% or more 🙁 I don’t think even Warren Buffett can easily earn this kind of return in his investments (even with a smaller sum).
USAToday – Discover’s merger with Capital One may mean luxe lounges, better service, plus more perks
The acquisition would give Capital One access to Discover’s high-credit-quality customers and its network of payment processing services, an area dominated by Visa and Mastercard. (Both are not very accurate in my opinion. I will explain them below.)
The deal will create the largest U.S. card issuer with around $250 billion in card balances and a market share of 22%, according to TD Cowen. (This may be true)
FAQs on credit card
What is credit card network?How does it work?
I just saw Stripe has a good text explanation. A picture is worth a thousand words sometimes. For that in ByteByteGo (my friend Alex Xu) I trust. See below. Discover is similar to Visa, Mastercard and American Express when we talk about credit card network (card swiping in the old days, now it’s tapping or digital wallet pay).
How credit card works, from Alex Xu/ByteByteGo
How does credit card companies make money?
In simple words, they collect network usage fees from the user of the credit card, initially from the merchant (via the merchant bank). For example, a consumer paid $100 at grocery store using a Chase Visa credit card. Typically the grocery store will eventually get about $97 from the merchant bank. Visa (the credit card network) will receive about 20 to 30 cents. The Chase bank will receive about $2.00 and the rest may go to the people (companies) who setup the payment terminal, merchant bank and so on. One may wonder why Chase bank (the credit card) issuer gets $2.00 which seems like a lot: note that money is not risk free. For example, if the consumer (the Chase credit card customer) didn’t pay her/his credit card bill, in theory Chase will take the loss. But banks usually are not that nice: they will pursue collection, hike interest rate etc. If someone is living on credit cards, basically he/she will be the “slaves” of the bank. 这里是一个具体的例子，下面是引用。
Visa accounted for just over half of the purchase volume on general purpose credit cards in 2022: Visa credit: 52%, $2.84 trillion. Mastercard credit: 24%, $1.32 trillion. American Express credit: 20%, $1.08 trillion. Discover credit: 4%, $211 billion.
Credit card issuers are the banks, or credit unions. Note American Express and Discover Financial are also credit card issuers, in addition to providing their respective credit card network.
Trivia Questionor bonus question: do you know the history of Discover Financial?
They actually started as a credit card division of the now defunct Sears corp., at one time the powerful department store that is based in Chicago (have you ever heard the Sears tower).
Will regulators approve the deal?
This is mostly a US only deal. Both companies mainly operate in the US. Not a lot of International exposure. I think the regulators will likely approve it, because together they are still not the most dominant credit card issuer or network. Here is a Bloomberg report on the deal (YouTube).
A word on digital wallet
I noticed digital wallet such as Paypal can automatically update the expiration date of the card on the file. This is a neat feature.
中文简译
Translate those two companies into Chinese. They don’t have heavy presence in China, Discover was there, in my vague memory.
Capital One Financial Corp. – 美国第一资本投资国际集团: 美国第一资本投资国际集团（Capital One Financial Corp.，下“Capital One公司”）是一家以投融资及基金管理为基础,集国际贸易、项目开发、投资银行业务为一体的多元化国际企业集团，总部位于美国特拉华州。
Discover Financial Service – 发现金融服务公司: 发现卡（Discover Card）是一种在美国广泛使用的信用卡。1985年到2007年，由美国金融寡头摩根士丹利等金融机构控股，零售商公司Sears推广发行。(Wikipedia)
Amtrak is enticing me with a new credit card offer
Reading Time: 2minutesAn email from CCRC, which my daughters play tennis (tennis clinics), unfortunately I am too OLD 🙂
Or in bubble territory. Personally I think so. I think this is a bit like the AI right now.
I think compared to tennis, pickleball is more social (for social interactions, chatting), but less sports. Once a friend joked pickleball is not a sports – which my 13 year old disagrees, note she is in the “inclusive” generation (or “woke”, LOL, if I may).
Looking back
A few years ago, 5 or 6 years ago, I only saw people playing pickleball at the J Creve Coeur indoor Gym on Saturday morning. Now we can see people playing pickleball everywhere; from outdoor parks (des peres park for one), to many community centers (Olivette, Overland).
Recently I heard a few of my friends playing including my boss who is a pro, btw; also heard tennis playing population is in decline, while the pickleball is picking up the steam. He actually took a few of us to CCRC new pickleball court and showed us the basics of pickleball, stay in the “kitchen” and all. Also the John brothers.
