Hey,

This is the second installment of The Financial Report, a newsletter with weekly insights on Finance and Tech. This week covers market moves from my favorite drink, a legendary CFO with an identical wardrobe to me, and a must-read playbook on scaling your executive bench.

Market moves

• With all eyes on inflation, be on the lookout for the next report on Wednesday (8/10). Elon thinks we’re past the peak. “The trend is down, which suggests we are past peak inflation,” Musk said at Tesla’s Austin headquarters and factory. “I think inflation is going to drop rapidly.”
• Jeremy Siegel, professor of finance at Wharton, thinks we should be near the end of the Fed tightening cycle. He sites the drop in productivity which is the lowest it has been in 75 years. Employment has held steady, but output (GDP) per employee has declined for the second straight quarter. Increasing productivity due to tech, scale, globalization, etc., was a key factor in keeping inflation in check for so many years. The lack of production we're seeing now can be due to output factors (i.e. supply chain), changing mix-shift in employment types (i.e. less high production jobs, more low production jobs), lower capital investment per employee, or many other factors. Following Jeremy's CNBC interview on Monday, we had a higher-than-expected job number on Friday, signaling strength in the economy. Will GDP and productivity continue to decline? It's not surprising there are so many conflicting views among economists and market participants –– there are so many variables in play.
• My favorite energy drink is Celsius. It’s healthier and tastes better than everything else. They’re the fastest growing company in a segment dominated by Red Bull and Monster. Pepsi invested $550M into the company which drove a 10% move. Some analysts think Pepsi will eventually acquire them. 
• Congrats to my friends at Uber on an excellent quarter. Dara, Uber’s CEO, was one of the first to acknowledge the “seismic shift” in market sentiment and demand for business efficiency. “We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.” It took courage and disciplined operations, but now Dara shares the results of a blowout quarter and great progress towards their cash flow and $5B in 2024 EBITDA goals.

Reads of the week

• Excellent CNBC interview by Lemonade’s CEO, Daniel Schreiber. Strong justification of Metromile acquisition, shifted the perspective of stock price declines to Lemonade’s fundamentals, and inspired confidence in their ability to rationalize costs. 
• Michelle Delcambre shared frameworks for scaling your executive bench. Lessons on how 30 outlier companies developed their executive team from startup to IPO. Michelle is the Operating Partner at Felicis Ventures and a former exec/leader at Stripe, Okta, Databricks, and Atlassian. I am fortunate to have worked with Michelle –  she’s the best in the business and an even better human. Here's the playbook for scaling your finance leadership:
  

• I listened to most of Going Public this week, which tells the inside stories of the visionary people who have attempted (with varying degrees of success) to transform the traditional IPO. There are a lot of conflicting incentives and procedural complexities to get the "right" price of a publicly-traded stock. The book dives deep into the bankers, lawyers, and founders/executives at Google, Spotify, etc., who challenged broken incentive structures and paved new pricing methods. Barry McCarthy (CEO at Peloton) was the particularly innovative CFO behind Spotify's direct listing. It took vision, credibility, and persistence. I also learned we both have a wardrobe that consists primarily of Robert Barakett t-shirts :)

Startups to know

Composer is a product that helps you build custom trading strategies like a hedge fund. You can use their drag-and-drop algorithm builder to create strategies from scratch or work from their pre-built templates. Backtest your ideas before you launch and share what you’ve built with others. Most of us should invest in a balanced market portfolio, but I’ve always had ideas on pair trades, portfolio sizing/weighting, etc., that I wish I could quickly implement. Composer allows me to do that … now let’s see how much money I lose :)

From Mike

No new posts this past week. Last weekend, I used my free time to launch this wesbite. It got started as a personal project during last year’s holiday break. I got covid and couldn’t travel home. Bummed I couldn’t be with family, I rewatched GOT and built the site in webflow. It’s been on the backburner for many months, but glad it’s finally LIVE! Let me know what you think … or if you find any bugs :)

Quote of the week

“Live as if you were to die tomorrow. Learn as if you were to live forever.”  –  Mahatma Gandhi

Mike