Henri's Profile

The CEO of Tesco said: “I don’t believe it will lead to less choice and poorer quality — we won’t let it do that. At the moment, as a UK retailer, we have a much deeper and richer supply chain than all our competitive set. We don’t see any reason why currency changes should change that.” We now know that the CEO was terribly wrong on the availability of choices and I wouldn’t be surprised if the quality of items deteriorates over time as the UK is forced to in-source more products that are better suited to be produced elsewhere. There are only but so many products that can be produced in the UK so the price will continue to be impacted by currency fluctuations, which adds several other challenges to the country, including inflation.

Source: http://www.businessinsider.com/tesco-ceo-dave-lewis-brexit-supermarkets-food-prices-2017-10

Some have stated that it does not make as much sense to focus on Trump’s short term view and other’s have stated that his short term policies in fact have long term implications. I tend to agree with the first camp as Ford cannot predict what the following Presidents will do and these factory investments are several decade investments. A way to hedge themselves is to have plants in the US and elsewhere so that if there is an isolationism battle they are in both countries already. There are risk to any of the plans, but given the global economy we are in from a supply chain perspective, think it is unlikely isolationism wins out.

This is a super critical topic that does not get discussed enough. I agree with Alex that this will be costly, but as ES mentioned they have SoftBank and Bezos who are both now worth $100B so funds will not be a problem. Also this issue will only grow as the population is expected to add 3 billion more people in the next 20 years and the cost will not be as relevant when there are fewer options to feed the world. Plenty seems well positioned and well backed to take over this market.

It is interesting that this is a topic where the climate has an impact on the supply chain versus the supply chain having an impact on the climate. The article (https://www.pbs.org/newshour/economy/column-avocado-boom) that PC referenced also talks about “great guac crisis of 2016” for other countries besides Mexico, such as New Zeland and Australia where supply went down 30% and prices increased 100%. The climate is having a global effect and I am not sure the innovations will be able out grow climate change and sustain the current 7lbs per person of consumption.

I have been on 13 Royal Caribbean cruises and can attest to very few of the ships being innovative. Recently they have created the largest cruises in the world with some significant innovations, but until then the upgrades were not impressive. We largely were choosing cruises for their destinations and affordability for the entire family. Not only will the digitization improve margins through cost reduction, but it will improve margins through revenue expansion. One way that they have already implemented is the use of digital photos instead of printed photos and humans holding them. This increased their photo revenue significantly. Excited to see the additional changes that will improve my experience.

Have always heard how expensive the mining of bitcoin becomes as the network increases, but never thought about those cost coming from the electricity cost of cooling the servers. Not as aware of the technicalities of the various energy types, but do wonder why several data centers or heavy server businesses aren’t based in Iceland or colder countries? I would imagine the cost of not being based in the major country of use offsets the savings from the cooling. Will be interested to see at what cost the energy will need to be for it to make economical sense for a majority of miners to move to colder nations.