Victims of Success

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Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it.

But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world.


Beyond Meat’s stock falls after former investor Tyson Foods announces plant-based nuggets [CNBC]

Of all the last couple years’ IPO run-ups, Beyond Meat’s is the one that feels most to me like vintage ’90s. The narrative power of Unknown Growth Potential! is so strong in a largely growth-constrained world that we’re almost all willing to take a small gamble on it, or else bet that others will do so, which works out to the same thing.

So I don’t begrudge those that are trading the thing with those ideas in mind, although I have neither the skill nor attention span to attempt it myself. But one starts to get the impression that there really are true believers here, not just in the long-term potential of meat alternatives (which does seem somewhat inevitable), but in the long-term prospects of the first company to have success marketing an edible beefesque recipe of heavily processed pea protein, canola oil and laxatives. Even among the sell-side, there are those who believe the fledgling franchise ought to be valued in the same range as the largest long-time producer of America’s favorite protein.

But if you’re betting on growth, remember: you’re betting on IP or you’re betting on a brand. It makes more sense in tech-land, which is where you usually see these growth stories, where they can platforms that establish meaningful switching costs and capital-driven barriers to entry. Tyson gave the market a (very) little reminder that that kind of belief in the IP of processed packaged food is perilous. These are not hard-to-figure-out ingredients, folks. Beyond that, the last several years have given us frequent reminders that brand sometimes doesn’t mean what it used to among American food consumers. Somehow, the narrative for Beyond Meat seems to have survived these reminders thus far, perhaps because this is the trade that allows investors smitten with the idea of meat alternatives to view it through a lens of abstraction that makes the ‘idea’ investable as a single stock.

That doesn’t mean you have to be a skeptic on the idea of plant-based meat analogs, much less a fellow like the above-pictured Rick Wiles, who believes that the competing Impossible Burger is part of a satanic plot to create a race of soulless creatures. But if you choose to invest on the basis of a strong narrative – an entirely justifiable approach in many circumstances, we think – take care not talk to yourself into believing your own stories. The longer you dabble in this kind of speculation, the easier it becomes.

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The Daily Zeitgeist

The Only Winning Move

By Rusty Guinn | July 19, 2019 | 0 Comments

It’s privacy and big tech again in today’s Zeitgeist, which is all about mutually assured surveillance. And for Epsilon Theory, it hits home. I think it will hit home for you, too.

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We’re Gonna Need a Bigger Boat

By Ben Hunt | July 15, 2019 | 0 Comments

Financialization is not a mean-reverting phenomenon. It’s too good of a gravy train for Wall Street, corporate management and the White House to stop now. So they won’t. Like any self-respecting Great White shark, the Nudging State and the Nudging Oligarchy never stop swimming. They never stop eating.

Want to survive these financialized waters if you’re potential shark food? You’re gonna need a bigger boat.

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When Did You Stop Beating Your Wife?

By Ben Hunt | July 12, 2019 | 1 Comment

“De Blasio’s ‘pay parity’ hypocrisy” is a feature article in today’s NY Post, and a central article in today’s media Zeitgeist.

Dig a little deeper into the “scandal”, and you learn that the “evidence” is complete horseshit.

It’s an article specifically designed to manipulate someone like me … someone who is VERY predisposed to believe the worst about Bill de Blasio because I dislike his politics SO MUCH.

It’s a rage engagement, one of two primary forms of Fiat News used to win the Game of You.

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The Upside Down

By Ben Hunt | July 9, 2019 | 1 Comment

Everything is topsy-turvy in the Upside Down of Stranger Things. That’s the Big Baddie in the picture above, known as the Mind Flayer.

Financial media is a Mind Flayer, too, especially when it comes to coverage of crypto and tech companies.

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Raking it in

By Rusty Guinn | July 8, 2019 | 0 Comments

A few months ago, we noted how important it had become for public figures and corporations to control their own cartoon, lest someone control it for them. Well, now that advice has itself become the narrative. Don’t say you weren’t warned.

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Here We Go Again

By Ben Hunt | July 2, 2019 | 1 Comment

“You just recently hours ago met with the Chinese president, Xi Jinping,” Carlson said. “Are you closer, do you think after that meeting, to a trade deal?”

“I think so,” Trump replied. “We had a very good meeting. He wants to make a deal. I want to make a deal. Very big deal, probably, I guess you’d say the largest deal ever made of any kind, not only trade.”

He just can’t help himself. And neither can we.

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