Uber isn't 'fit and proper' to operate in London; 'A red scare has washed over SF'; Don't Blame Just Trump for U.S.-China Hostility; Lessons from a spat with my cousin; How to Have Closer Friendships; Survey: Average American Hasn't Made a New Friend – In Five Years!

By Whitney Tilson

Monday, November 25, 2019

1) I’m surprised that Uber (UBER) shares aren’t down more this morning on the news that Transport for London – the city’s transportation authority – had, for the second time in two years, declared that Uber was not “fit and proper” to operate in the city.

Investors are no doubt taking comfort in the fact that Uber has 21 days to appeal the decision, and even if the company loses in that process it can take this to the courts – which could take years. This means Uber should be able to continue operating in the market – one of its top five in the world – for some time.

But even it Uber prevails here, it faces another existential threat in Britain… In a case that mirrors the California legislation that’s due to go into effect on January 1, its drivers have sued to be considered employees, not contractors – and have been winning so far.

Back when I presented my short thesis on Uber at the end of October at the Robin Hood Investors Conference, I highlighted potential regulatory issues like this. The stock is down roughly 10% since then…

Beyond the many issues with Uber’s unprofitable ride-hailing business, the company has several major money-torching ventures including Uber Eats, autonomous driving, Uber Freight and grocery stores. These are spread across the globe, and the chance that Uber can pull off all of these businesses seems extremely low.

The company still has a market cap of $50 billion, so there’s lots more room for the stock to fall…

2) Shelly Banjo, who covers technology for Bloomberg in Asia with a focus on China, shared some interesting thoughts in a 10-tweet thread after visiting Silicon Valley. Excerpt:

It was clear that a red scare has washed over SF…

Some tech execs openly worrying that China’s approach to censorship and authoritarianism is bleeding into the U.S., posing a severe threat to America…

Despite claims of China’s tech prowess, met with Chinese developers, scientists and students who won’t leave the U.S. to go back to China. They want to keep research in the U.S., even if they are working for Chinese companies

3) Here’s Zachary Karabell in Politico with more on the same topic… Don’t Blame Just Trump for U.S.-China Hostility. Excerpt:

Notwithstanding the mini deal the White House announced late last week, the state of U.S.-China relations remains tense, and there is no reason to expect that they will ease up. The Trump administration, with its fixation on trade balances and its view that the Chinese have ripped off U.S. consumers for decades, clearly initiated the current trade war. But the truth is that American animosity to the rise of China can’t all be attributed to President Donald Trump.

That animosity runs deep in American society and cuts across partisan lines and geography, with politicians across the spectrum regularly asserting Beijing’s status as an adversary and some 60% of the American public now holding unfavorable views of China. When it comes to the multiple and many self-inflicted wounds that the current U.S.-China trade war has caused and the many more it will likely cause in the future, Trump may have lit the match, but Americans of all stripes added the kindling for years beforehand.

This matters because the hardening of attitudes toward China across a wide swath of American society seems to be resulting in bad policy: confrontational and punitive strategies that are just hard-core enough to undermine relations, but not nearly sufficient to pressure China into making systemic changes or to help the United States find viable alternatives to the needs China currently fulfills. Unless Americans begin to revise their impression of China, recognizing its limitations and its vast potential and treating it as a partner rather than a foe, China is unlikely to alter course; in fact, it is entirely possible that more and more draconian measures could plunge the United States and China into a deep economic tailspin.

4) Warren Buffett was once asked how he defines success and he replied, “If the people who should love you, do love you.”

That’s one of the reasons why I list loneliness and/or ruptured relationships with loved ones as calamity No. 4 in the book I’m writing, All I Want to Know Is Where I’m Going to Die: The Five Calamities That Can Destroy Your Life and How to Avoid Them.

My grandfather didn’t talk to his brother for the last 40 years of their lives because of some silly argument – but both of them were too stubborn to bury the hatchet.

I used to think it could never happen to me. But I started going down this slippery slope just a few days ago, which was a real wake-up call…

It all started when I sent an e-mail to my friends and family, asking them to support a politician I know and like. Dozens did so, but one of my cousins wrote back saying, “Seriously, you are so much smarter than that!” She then added some nasty things about my friend.

I should have just ignored her reply, but I didn’t. I thought her e-mail was ignorant and obnoxious, plus I was sleep-deprived and jet-lagged, which made me crabby.

So I blasted her… and she blasted me back… and a thermonuclear war of e-mails ensued!

I had a knot in my stomach afterward, and it also didn’t help my sleep much. I felt like I was right on the merits of the argument – and she had started it – but I also had the sinking feeling that this could impair our half-century-long loving relationship.

I was still stewing over this the next day when the thought occurred to me, “If I can make peace with Elizabeth Warren (here’s a 23-page pdf if you’re interested in the story), then surely I can make peace with my cousin,” so I called her up and opened with the line, “Hey, it’s your favorite cousin calling!”

Long story short… we had a good talk and a big laugh about our pissing contest, and all is well.

There are some good lessons here:

A) Don’t talk politics with anyone you know who strongly disagrees with you. In today’s polarized world, politics is like religion. Can you imagine a Jew and a Muslim having a discussion, with each trying to persuade the other that their religion sucks and that they should switch? No good can come of it – only anger, hurt feelings, and a ruptured relationship. No wonder one-third of Americans say that this has happened to them…

B) If someone or something pisses you off, wait a day before replying until you’ve cooled off. As Charlie Munger likes to say: “You can always tell someone to go to hell tomorrow.”

C) E-mail (and texting) are great for efficiently communicating information, but are horrible for anything angry/emotional/difficult. For the latter, do it in person or, if that’s not possible, pick up the phone.

D) If you screw up A), B), and C), as I did, it’s not too late to go see someone in person or call them and make things right. It’s very easy to be a total a**hole in writing, but much harder in person…

5) Along the same lines, I enjoyed this recent article in the New York Times: How to Have Closer Friendships (and Why You Need Them). Excerpt:

Dr. Levine has identified the five foundational elements of secure relationships, which he refers to as CARRP.

  • Consistency (Do these friends drift in and out of my life on a whim?)
  • Availability (How available are they to spend time together?)
  • Reliability (Can I count on them if I need something?)
  • Responsiveness (Do they reply to my e-mails and texts? Do I hear from them on a consistent basis?)
  • Predictability (Can I count on them to act in a certain way?)

Once these five elements are in place, it can pave the way to a deeper connection.

6) This article underscores why torching existing relationships is totally insane: Survey: Average American Hasn’t Made a New Friend – In Five Years! Excerpt:

Spending time in the company of good friends regularly has been shown to have a positive impact on health. But for many Americans, socializing in adulthood gets harder with age. A recent survey reveals that 45% of adults admit they find it hard to make new friends. In fact, the average adult hasn’t made a new friend in the last five years, according to the survey.

The survey of 2,000 Americans – commissioned by Evite – dug into the reasons why Americans struggle with new friendships. About two in five (42%) said they have trouble making friends because of introversion or shyness. For these individuals, it’s simply a struggle to come out of their shell and comfortably break into new social situations and circles.

A third of adults blame their lack of new friendships on their aversion to the bar scene, where potential new friends often go to socialize. Similarly, a third of respondents also feel everyone else’s circle of friends have already formed, making it harder to join the gang.

Other reasons for an anti-social attitude include commitments to family (29%), not having hobbies conducive to making friends (28%), and moving to a new city (21%).

Still, many Americans are trying to change these patterns. Forty-five percent of those surveyed say they would go out of their way to make new friends if they knew how or had more opportunities to do so.

Best regards,


Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor’s degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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