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On November 20, 2016, aricarlospena commented on Orbitz: Turning Digital Distribution from a Challenge to an Opportunity :

Woah! I didn’t know that Orbitz was initially funded by airlines. That feels…fishy.

While it seems from your post that the joint venture was done completely above board and there were no collusion worries (though it was investigated by the Transportation and Justice Departments for possible anti-trust violations:, you could clearly see how other industries make collude to hurt customers. The most notorious example is OPEC, which is a collection of countries that bands together to manipulate oil prices rather than having regular supply and demand shape equilibrium prices and quantities.

Furthermore, while you show how commission rates changed after Orbitz was launched, doesn’t economics tell us that the market would have made this correction eventually anyways? If companies could survive charging a smaller commission and passing that savings onto consumers, then more companies would enter at this lower price point until an equilibrium was reached. But perhaps it took the airlines banding together to really push this initiative forward.

On November 20, 2016, aricarlospena commented on Online retailing and the Dollar Shave Club :

Great post. I used dollar shave club for a bit, and then I decided to grow a beard…

I share Sam’s concerns above about how they react in an environment in which beards are clearly more in. But I also wonder if much of DSC’s brand equity will fade away after this acquisition. I think one of the reasons I was attracted to this brand was that it felt like a small, little known start up, that was doing shaving a different way. It is for much of the same reasons I tried Harry’s razors. If they are part of a big conglomerate, do they lose part of that brand equity and devoted following? I’m not sure, but it is something to keep an eye on.

Great post!

I think many of my thoughts are summarized by the commenters above, but I guess my main concern is what happens when a few corporations own the majority of health information in the country. With all of that data, you could see the benefit of them being able to maybe send out a reminder to you that hey, because of your history, you are more prone to this disease, so come get that checked out. Or you could see the opposite, where they want to charge you more because you are a higher risk patient. Also, with the consolidation as you noted, it becomes an increasingly scary place for hackers. Imagine the fear that could be inspired by having access to so many American’s health records.

It is clearly the future, but as with all technological disruption, the downside can look scary.

On November 20, 2016, aricarlospena commented on Bringing Robo-advising to the World, One Bank at a Time :

Great post. Robo-advising is definitely going to reshape how most of us invest.

I think one of the main concerns for SigFig, its partner firms, and the robo-advising industry in general going forward will be how they can keep this new technology compliant with existing law and future SEC regulation. The SEC has stated a number of times that they are continuing to look at may of these new technologies and trying to ascertain whether they follow all best compliance practices for the retail investor. They have written guides for investors ( and just last week SEC chair Mary Jo White cautioned investors about robo-advisors limitations (

For me, it is not a question of if someone will screw up, but when and how the industry will deal with it. I can imagine someone losing money in an investment with a robo-advisor, filing a class-action lawsuit, and in discovery, emails from the robo-advisor coming out saying something along the lines of, “these are retail investors, we can sell them anything and they don’t know any better.” While it is great that they can provide investment services for lower costs to individual consumers, I think they will have a harder time navigating the investment compliance landscape.

On November 20, 2016, aricarlospena commented on Disrupting Wealth: Bettering the Wealth Management Industry :

Great post. It is something that all wealth management firms are facing now and each have various ways of dealing with it, as you mentioned.

In addition to what you wrote, I see two main concerns that could come from this switch. The first is ensuring that all of these advisors are fully compliant with not just the letter of the law, but the spirit too. If you ask firms like Merrill and MSSB why their fees are high, they will quickly point out that it is not just the investment advice they give, but also their robust compliance systems that ensure all of their financial advisors are giving investment advice in accordance with the 1940 Advisors Act and SEC guidance. If these robo-advisors are able to provide similar investment advice alongside top grade compliance programs, that would really be a game changer.

The second thing I think about is how the wealth management industry will divide even more between high net worth individuals and retail investors. If robo-advisors are able to replace most traditional financial advisors, the only ones who will probably have access to standard wealth management providers are more high net worth individuals. While it may be ok for typical investments, there are many things that robo-advisors are still not really capable of doing. For example, if a child or family member contracts an illness and I need to know how to reshape my investment portfolio to provide liquidity over a short period of time, or if I am planning to leave my job in the near future, human financial advisors are more likely to learn more valuable information to help lead you to a better outcome.

Great read!

I think your suggestion of investing more in customer-side projects such as giving discounts for sustainable practices (like health insurers giving discounts to gym members) is a great one. Incentivizing customers will certainly be key to AIG’s success in dealing with climate change.

You also mention the existence of weather related insurance items like catastrophe insurance. I think one of the biggest challenges will be how to accurately price these items. While AIG certainly knows that there could be an increase in major weather phenomena that will increase claims, if they are able to price this risk correctly, it is a great opportunity for them. The problem though is if like the housing crisis they misprice risk of climate change, they could need another bailout or go insolvent. I wonder if the lessons of 2008 will hold and it will affect their calculations accordingly.

On November 7, 2016, aricarlospena commented on Seeking Snow: The Impact of Climate Change on Vail Resorts :

Great piece!

I think your analysis of needing to diversify their business away from strictly cold and snow related activities is spot on. I think the challenge though is when entering other new environments trying to predict the affects of climate change on them as well. Certain places may be good for kayaking or hiking now, but as rising temperatures and unpredictable weather and drought patters continue, they may face similar problems to what they are facing now, and in industries with which they are less familiar.

I wonder if they can also invest in technologies that can help mitigate the impact of the lack of snowfall at some of their resorts. While fake snow today may not be as sexy as the real thing, to the extent Vail and others can invest in this and other alternatives, it may provide additional options going forward. This would also allow them to stay in the industry they know best. This technological advancement may not be easy or a short-term fix, but it could help diversify them even more as the threat of climate change grows.

Great read on a great topic!

I guess I am more skeptical about the climate policies of the NFL (though I do admit I am very biased when it comes to the league). For one, while NFL is an organization in some respects, for a lot of the actual day to day business, rules and regulations are managed by the teams. As you mentioned, only 15% of teams actually disclose environmental initiatives and there are no requirements mandated by the league that governs all teams. With regard to building stadiums, I think a major challenge will be the source of financing. Since most stadiums are built using public funds (instead of by their rich owners–see I’m biased), I think it will be difficult with league mandate of strict regulation governing best practices for climate sustainability. Stadiums may have to be built with short term cost as a bigger concern than long term climate affects, and that could lead to increased emissions with new stadiums. Sports teams also use vast amounts of transportation that is bad for the environment, build large practice facilities, and lobby against any regulation that hurts their bottom line. Until profits of either the teams or the league as a whole are impacted, I do not see much improvement occurring.

On November 7, 2016, aricarlospena commented on Fast Fashion on a Fast Decline via Climate Change :

Great read! You are right that even the most environmentally conscious of us do not tend to consider the impact our own clothing purchases tend to have on carbon emissions. I was surprised to read that the apparel industry is actually the second largest emitter of carbon into the atmosphere (after the oil industry), contributing 10% of global emissions (

You pointed out well that H&M is taking steps to mitigate the risks that climate change brings. I wonder if they could also go further at not just ensuring that their current supply chain is as sustainable as possible, but also actively trying to affect demand in both the type of clothing and the reusability of clothing. People mentioned in the above comments about reusing clothing or mending broken items, but I think they can also market certain fabrics and materials as part of an environmental line. If they can keep prices for these products at relatively the same price as their already affordable clothing, I think it could be a real opportunity for them.

On November 7, 2016, aricarlospena commented on Nutella, Why U No Last Forever? :

Fascinating read. I think you nailed the main challenges for Nutella going forward, with questions about its suppliers and the availability of the ingredients.

In terms of your proposed solutions, I think the main determining factor will be Nutella’s estimation of how quickly climate change will affect each of its ingredients. If they believe this will be a major concern in the next 10 years, I think option 3 is necessary for continued supply of its current product mix. But if their forecasts believe that either climate change will occur more slowly or that cocoa will only be greatly impacted once temperatures rise by an additional degree Celsius (for example), then longer term solutions may be most appropriate.

You mentioned for option 2 sustainability in its own supply chain. I wonder if there is also a place for Nutella to invest in new age agricultural techniques that may mitigate the affects of climate change on its main ingredients. Whether this includes the use of GMOs, different watering practices, or other farming mechanisms, these could produce an alternative solution to their climate change challenges.