The Dead at Wrigley


This post is by Jeff Carter from Points and Figures


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Never been to see the Dead before.  We are going to see them tonight at Wrigley.  I don’t own any tie-dye.  I never have had the chance to see them.  In high school and college I never had the money to go to concerts.  I can count on one hand how many I went to.  Once I got out of college, we’d go see a couple but neither of us were active concert goers.  If the Grateful Dead was in town, I usually didn’t have the time.  This will be the first major concert in Chicago since the legislature legalized pot.  I am sure there will be a lot of people heading into Lakeview with medical conditions.

The weather in Chicago has been perfectly dreadful since October 1.  Looks like it will be a nice day today.  Might even Continue reading “The Dead at Wrigley”

Network Effects and Venture Capital


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In the last several years there has been a lot of fund formation in venture capital.  New funds have started.  Existing funds have raised much larger funds.  There is a lot more money being put into innovation today than there was ten years ago.  However, the amount of money in geographical areas has remained uneven.  Sort of like income inequality, where the rich get richer while the poor stay about the same.  For example, there are 12 VC funds in Michigan.  There are 12 in one building in Palo Alto.

The Brookings Institute just released a study on venture capital by geography.  It’s an interesting read.  Brookings also did an analysis with some Michigan MBA students.  Several years ago, Stephen Spreiser and graduate students at the University of Illinois did a similar analysis.

Access to capital was one of the Continue reading “Network Effects and Venture Capital”

Should We Establish A Digital Authority?


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Spent much of the last two days at the Stigler CenterProfessor Luigi Gonzales organized a pretty powerful conference.  It was a lot to take in, and in the University of Chicago tradition, it wasn’t just one opinion being spouted.  People had to defend their ideas, and there was consistent debate.  As a passive audience member, some of my assumptions were challenged.  It was a lot to take in and frankly, I am still taking a lot of it in.

One of the ideas that came out of the conference was that some sort of digital authority should be established to police digital companies.

I don’t think I agree with this conclusion, but I certainly understand where it comes from.  Digital companies can do a lot to put chokepoints in distribution.  Once they attain market power, they are hard to dislodge.  The Continue reading “Should We Establish A Digital Authority?”

Pretty Excited To Go To This Conference


This post is by Jeff Carter from Points and Figures


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I am headed to the University of Chicago the next two days.  They are hosting a conference on data privacy and security. There is a large debate in the US right now about whether to regulate, or not to regulate digital companies like Facebook and Google.  Both left wing and right wing politicians are advocating for regulation.

My gut tells me not to regulate.

Professor Luis Zingales is running the conference.  If you click the link I posted above, you can see the agenda and who is speaking.  For example, the co-founder of Facebook, Chris Hughes, is speaking. Recently, he published an article advocating for the breakup of Facebook. I am interested in what he has to say, and to understand how he is framing the issue.  Is he seeing something that I am not?

Zingales recently wrote a book I just finished.  It’s Continue reading “Pretty Excited To Go To This Conference”

State of Illinois, Deliberately Stubbing Its Toe


This post is by Jeff Carter from Points and Figures


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Yesterday in Illinois, the Illinois Senate approved a massive income tax increase.  We will go from 4.95% to 9.5%.  Others have covered the particulars of it all here.

Here is a different way to look at it.  Let us look at it relative to the Big 3; California, New York and Illinois.  Really we are looking at LA, San Francisco Bay Area, NYC, and Chicago.

If we look at competing states with big cities and big economies, New York and California stand out.  Sorry about the formatting.  There are slight differences for filing single or married filing jointly but they are tremendous.  You get the gist.

Here is NY.  Recall NYC tacks on a city income tax as well.

$8,500+ $17,150+ 4.50%
$11,700+ $23,600+ 5.25%
$13,900+ $27,900+ 5.90%
$21,400+ $43,000+ 6.45%
$80,650+ $161,550+ 6.65%
$215,400+ Continue reading “State of Illinois, Deliberately Stubbing Its Toe”

Grrrr. Midwestern Weather Makes You Gritty


This post is by Jeff Carter from Points and Figures


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The weather has been so crappy in the Midwest, I thought I’d try to warm you up with some Little Feat.

At my place in Grand Marias, MN the snow was almost all melted. Then they got dumped on. A foot. It’s a balmy 34 degrees up there so it’s melting I guess.


In Chicago, we had snow like this back in 1910. At least we have made a lot of technological advances where it’s easier to deal with.

Sigh.

They Are Out and Out Lying


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Yesterday, CBS Reporter Charlie De Mar released texts of Chicago Attorney Kim Foxx on the Jussie Smollett case.  You can read through them on his Twitter feed here. The Chicago Tribune published everything here.

Pretty damning.  Chicago citizens saw right through the case from almost the very beginning.  Chicago politicians want to protect power so they aren’t doing much about it.  It’s a travesty.

I wish more reporters would do reporting like this.  Here are a couple of other examples.

Crain’s published an article by a couple of union mouthpieces defending the progressive income tax proposal in Illinois.  It’s full of lies. They state that Illinois budget deficit is only around $3.2B dollars.  It’s more like $10B to $15B.  But the elephant in the room is pensions and medical deficits which are around $237B in the red.  Fortunately, the guys

Continue reading “They Are Out and Out Lying”

Sign of Spring Up North


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I came across this video of a bear emerging from his den after hibernating all winter. This was not my impression of how bears emerged from their dens. I thought they came out and were ravenous. It’s more of a process.

Nature is like that. It surprises you. Nature follows a process and while it’s similar year after year it is never exactly the same.

I have a few Nest cameras around my place in Minnesota and I look at them every day. I was hoping (expecting) to see a lot of wildlife moving around our lake in the winter since there are no people around. I thought we’d see a moose, deer, wolves, coyotes scavenging food and trying to survive the winter. We did see a couple of deer but nothing really showed up.

They received 85 inches of snow at our lake place this year. It was bitter Continue reading “Sign of Spring Up North”

Could Be The Wrong Change


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Yesterday Chicago elected a new mayor.  I voted for her but for a free market person it was Solomon’s choice. Neither candidate was free market.

I think the media will run with a narrative and it will be the wrong one.  Here’s the media narrative.

  1.  Chicago elected an African American female who was lesbian and not an insider
  2. Chicago elected a mayor an aldermen who were not Machine candidates.

They aren’t wrong.

However given the state of the city was this the right course to beat the entrenched Democratic Machine that was highly corrosive to Chicago and the daily lives of Chicagoans?

We will see but given the policy positions of the new mayor and the policy positions of the Socialists I don’t think so.  Socialism is never the right antidote.  Neither are big government programs

I do think Lightfoot is right that we need to get our neighborhoods together.

Continue reading “Could Be The Wrong Change”

Wireless Charging is Hard


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Apple announced that they weren’t coming out with their wireless charging mat for devices as announced.  I was an angel investor in a Chicago company, NuCurrent, that is the industry leader in wireless charging.  It’s super technical, and it is super hard.

NuCurrent has many Ph.D. electrical engineers working daily on the problem.  NuCurrent has a patent portfolio that is second to none.

Their CEO Jacob Babcock recently wrote a post on their blog about Apple Power. Here is an excerpt of what he wrote.  Click over and read the whole thing.

Apple’s AirPower product was an ambitious concept that took on multiple, overlapping technical challenges related to wireless power. These included:

Variable loading
Having from one to three devices charging simultaneously

Variable charging rates
Supporting devices with different power requirements (ie. Watches and AirPods need less power than iPhones)

Variable receiver sizes
Supporting Continue reading “Wireless Charging is Hard”

If You Need Some Inspiration Watch This Video


This post is by Jeff Carter from Points and Figures


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Katlin Smith of Simple Mills was recently on the Today show.  I am a seed investor in Simple Mills. They are based in Chicago.

Often as investors, we are asked why we invest.  Watch this video.  I think you will get the gist of why people invested in Katlin when she was raising money for her company.  At the time she was pitching the company, I was 1000% impressed with her and what she was doing.  I liked the market and thought she had incredible potential.  However, I had invested in many other consumer products companies that didn’t work out.  I had experienced 100% failure.  Mark Tebbe encouraged me to invest in Katlin so I did.  I am glad I followed my gut and not the prior data.

There are some things that stand out.

  1.  Katlin had a problem and solved Continue reading “If You Need Some Inspiration Watch This Video”

How Can Startups Scale Up?


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The above is a great discussion. Robert Alter and Jai Shekhawat scaled companies and sold them. Amanda Lannert is CEO of Jellyvision, and is scaling. Jellyvision is consistently touted as one of the best companies to work at in Chicago. They all know the chapters and verses of the journey from two people with an idea to scaling and selling the company to a major acquirer. They have accumulated bumps and bruises along the way, but survived.

You can do it too!

Chicago Booth Review has some great research on their site. Hal Weitzman has done a very good job with it since starting at Chicago Booth awhile ago. It really causes you to think about things differently. I read it all the time.

Congratulations to Professor Ray Ball


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Yesterday I read the news that my friend Professor Ray Ball received an award.  Big hearty congratulations to him.  Like me, he likes to cook and drink good wine.

He is a PhD Economist that has done a lot of research in the field of accounting.  In 1968, he wrote a paper on “An Empirical Evaluation of Accounting Income Numbers” which was published in the Journal of Accounting Research.

It was groundbreaking.

He received the Wharton-Jacobs Levy Prize along with co-author Phil Brown.  Professor Brown is also a PhD economist from Chicago. The prize is given biennially.  If you are an academic and receive the prize, it’s highly likely that you received a Nobel Prize.  Harry Markowitz and William Sharpe received previous prizes.

Ray also authored another ground breaking paper.  “Anomalies in Relationships between Securities’ Yields and Yield surrogates,” published in the Journal of Financial Economics in 1978.   It Continue reading “Congratulations to Professor Ray Ball”

Let’s Do It This Time


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From 1986-2013, I was on a trading floor.  From the late 1980’s when I first got my membership until I left I was a member of CME’s political arm.  It went by various names.  The “job” wasn’t anything underhanded.  It was all volunteer.  Frankly, you donated money to the PAC and raised money for the PAC from members on the floor.  We also would talk to Congresspeople when they came to CME and interact with their staff.  Once a year, we’d go to Washington and have a party.  It was always well attended.

Our PAC donated 50/50 to both parties.  I had to talk to Chuck Schumer, and Lindsay Graham and make the same points.

Virtually every year in the budget there was a provision to tax trading.  It was called a transaction tax.  I have blogged about it several times before but it is one of the stupidest tax Continue reading “Let’s Do It This Time”

Millennials Leaving Chicago


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This study is from the liberal think tank, The Brookings Institution.  Their conclusion is wrong.  It’s not about affordable housing.  It’s about an affordable life.  If Governor Pritzker has his way, housing in Illinois will get a lot more affordable.

New York and LA beat Chicago. Houston, Denver and Dallas are where millennials are moving.  We already knew that people over the age of 55 were leaving in a massive migration.  Check out the differences in the all in cost of living in the various places and you can see why some cities are attractive and some are not.

I guess all the bullshit that prior Governor Rauner passed around higher tax rates, sanctuary state, sanctuary city, abortion on demand isn’t important to them.  What they really want is a job and an opportunity to build wealth so they can have productive lives, build families and chase the American Dream Continue reading “Millennials Leaving Chicago”

Drink Local.


This post is by Jeff Carter from Points and Figures


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Every single town has its own idiosyncrasies. Chicago has some. Everyone knows about deep dish pizza. We are famous for hot dogs (no ketchup please). We are also famous for other kinds of sausage like Maxwell St. Polish and Bari Italian Sausage. It’s why “Abe Froman The Sausage King” was so funny in Ferris Buehler’s Day Off. You might have heard of Chicago’s italian beef and giardinara. Odds are you haven’t heard of Malort.

Malort is made from wormwood.  Absinthe was also made from wormwood.  It is now made in Chicago again.

It’s a Chicago liqueur with a special taste. I love the comments on this video. “Malort uses the same process as vodka, but instead of using potatoes they use recycled tires.” Let’s put it this way, it is an acquired taste. If you haven’t had it, many bars will carry a bottle. It’s Swedish. Carl Jeppson Continue reading “Drink Local.”

The Strength of Chicago’s Tech Ecosystem, or Non-Strength


This post is by Jeff Carter from Points and Figures


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At 7 minutes in, John Pletz and Amy Guth talk about the Chicago Tech community. Can an Instagram like company be built in Chicago?

Are Chicago investors risk averse and skittish? Do Chicago entrepreneurs think big enough?

Good conversation.  Here is the tweet John talks about in the podcast.

When I started Hyde Park Angels at the very first meeting I said we would invest in things that the Midwest was good at. We weren’t Silicon Valley and why would you want to be. If you want to compete with them, you were guaranteed to lose since someone could get in a car or on a plane and be there shortly.

Chicago has tremendous depth of talent in things like B2B Fin Continue reading “The Strength of Chicago’s Tech Ecosystem, or Non-Strength”

Welcome to Pottersville (Chicago)


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There was a gubernatorial election last fall in Illinois.  On Tuesday, Chicago voters go to the polls to elect a new mayor.  If our current mayor, Rahm Emanuel, was running he would not make the top two.  John Kass says to “Wake up Chicago” and on Tuesday I hope everyone is woke.

An aside, is it voter suppression to have an election at the end of February in Chicago when the weather is almost guaranteed to be bad?

If we look at the state, it’s in a financial mess.  We have had the same speaker of the house for over 40 years in Illinois.  The state has basically been run by Democrats and crony capitalist Republicans for my entire lifetime.  Governor Bruce Rauner was the only Republican that offered up out of the box changes, and he was bounced.

Websites like Wirepoints, Illinois Policy, Better Government Association

Continue reading “Welcome to Pottersville (Chicago)”

The Luddite’s


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I read the budget address by Illinois new governor yesterday.  Basically, there was nothing new in it.  They are going to legalize pot, legalize sports betting and estimate they will get some tax revenue from it.  The Democratic Machine is going to push for a progressive income tax that will hurt middle class families and families that can’t move out of state badly.  No reforms.  No pension reform.  No corruption reform.  It’s pretty disappointing.

Sort of reminds me of the movie It’s A Wonderful Life and the difference between Bedford Falls and Pottersville.

Something else occurred to me though.

In the early 1990’s, the membership at the Chicago exchanges split into two factions.  On the floor of both the CBOT and CME there were groups of members that wanted to invest heavily into technology.  They didn’t have the power in the board rooms of the exchanges.  They also weren’t the Continue reading “The Luddite’s”

No Matter What, You Have to Compete


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I went to the Chicago Blackhawks game last night.  I am not a hockey expert, but I like watching the Blackhawks play.  The United Center wasn’t empty, but it wasn’t full either.  The national anthem was still stirring.  I hope that never changes.  The Blackhawks have been on a win streak but they still aren’t playing exciting playoff type hockey.  They are last place in their division.  The arena lacked the vibrancy of the past days.  It was low energy.

It sort of kills me to type that since we had a great run of Stanley Cups and playoff hockey.

The Hawks only have four players playing leftover from all those teams. Patrick Kane, Jonathan Toews, Brett Seabrook and Duncan Keith.  Marcus Kruger is on the team and Corey Crawford has been injured for what seems like forever. It must kill them to lace up the skates Continue reading “No Matter What, You Have to Compete”