May 1, 2017
What We’re Reading This Week
Rent vs. Buy
Do you stream music or buy CDs? Do you own DVDs or a streaming video service? Ian Leslie at NewStatesmen is arguing that the rise of Netflix is directly contribution to society’s decline.
Referencing an article by Izabella Kaminska at the Financial Times:
“Ownership of nothing and the rental of everything represents . . . the return of an authoritarian and feudalistic society.”
These are dire sentiments indeed. The thesis here being that owning things somehow increases your personal significance. As younger generations move away from buying things, from homes to dogs, we are moving into an era dubbed “post-materialism.” If the part of that sentence that upset you was that people are renting dogs, you had the correct response. Personally, I fall squarely into the segment of the population that rents stuff. My family and I have never been interested in watching television but have always enjoyed movies. That is where my relationship with Paygo (Pay-as-you-go) began. Paygo is not a company, it is an idea – the concept of renting as opposed to purchasing. As streaming video options became cheaper and more prevalent, we slowly began to move our movie collection to digital. Now, it has been years since I purchased a physical DVD. When someone gives my kids a movie for Christmas or a birthday, I scan the digital download code and store the disc in a box somewhere in the recesses of my basement. We do not own a DVD player.
Maybe the author is right and this is a generational thing. Certainly, it has taken hold with millennials. All I know was that I felt a supreme amount of satisfaction when I did not have to find a shelf for those darn DVDs. I thought, “Maybe there will be more room for my books!” Little did know, one day I would rent my books too. Today, this idea of paying a monthly fee for unfettered access to a wide range of materials has taken root in my life. We pay for cloud based digital storage, our photos are saved in a computer, and our books, music, and film are all streamed to our devices.
As disturbing as it may be, even owning a car may be obsolete in my lifetime. Ride sharing and autonomous cars may make owning a car pointless for the vast majority of drivers.
I do not feel spiritually bankrupt for lack of ownership and it does not represent a fundamental breakdown in society. Unless you rent a dog, only a lunatic would rent a dog.
Earlier in the week, The Journal reported on the Wells Fargo shareholder meeting. An activist was kicked out for shouting something silly at the board. There must be diagram somewhere that shows how complaints and extra time eventually intersect to result in shouting at people in a shareholder meeting. Certainly, the first step of that is writing stuff on the internet. However, as complaints and “time on your hands” increase, eventually you find yourself going to a meeting and shouting at shareholders. The apex must be some form of shareholder activism where Carl Icahn is the poster child.
Also, maybe this is another one of those generational things. It could be a sign of moral bankruptcy that young people today just are not willing to go to shareholder meetings and shout anymore. They would prefer to write stuff on the internet. Then again, this guy has been kicked out of bank shareholder meetings before so maybe he just has a thing against banks.
The whole debacle culminated when he was told he was out of order and he shouted, “Wells Fargo has been out of order for years!” Then he shouted, “You can’t handle the truth!”
I made the second part up.
I have to admit, I forgot that this was still a thing. This suit has been going on for 11 years.
In the wide world of investments, you are not supposed to short a stock and publically say negative things about that stock. If the stock goes down and you make money, people feel like you committed a crime. Certainly, you can buy a stock and say nice things about it. If the stock goes up and you make money you will rarely get sued. Sometimes you still get sued but mostly not.
The case here is the former. Some hedge funds shorted Fairfax Financial Holdings Ltd. and were later sued by Fairfax. The case was dismissed the first time around, but has risen, like a Phoenix, from the ashes.
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