Duration is a fundamental financial concept, but it’s more part of the fixed income investor toolkit than the equity investors’. For reasons I’ll get into, duration is usually a misleading concept for equity investors, but there are a few cases where that’s changing.

Duration in bond investing refers to two different measures, which are, conveniently, measured roughly the same way:

  1. The weighted average time in the future at which a bond pays its returns — i.e. the number of years from now when you’ll realize half of the net present value of the bond, and
  2. A bond price’s sensitivity to…


Dropbox, WeWork, and Google all think they have the playbook for the part-time office

An illustration of workers having a meeting in a conference room.
An illustration of workers having a meeting in a conference room.
Illustration: Ariel Davis

Aside from religion and politics, it’s hard to think of another topic in recent memory that has provoked more fierce debate than the concept of remote work. For years, “future of work” enthusiasts would quibble over how some people are more productive by cutting out commutes and working in a pajama-friendly home office, while others prefer the camaraderie and water-cooler small talk that only a bustling office could provide. Lurking beneath these discussions around worker productivity and engagement was perhaps a bigger underlying issue: the potential dismantling of one of corporate America’s longstanding cultural mainstays—the IRL office. …


It turns out frequent flyer programs are worth more than the airlines themselves

A fleet of Delta Airlines jets parked at the Southern California Logistics Airport (SCLA) due to decreased air travel.
A fleet of Delta Airlines jets parked at the Southern California Logistics Airport (SCLA) due to decreased air travel.
A fleet of Delta Airlines jets parked at the Southern California Logistics Airport (SCLA) due to decreased air travel in Victorville, California. Photo: David McNew/Stringer/Getty Images

More than six months after the World Health Organization first declared Covid-19 a pandemic, airlines are barely limping along. The TSA’s daily passenger count tracker currently shows that air travel is down about a staggering 70% from last year. Demand for air travel is better than it was during the depths of the crisis in mid-April, when travel was down 95%, but it’s still far from a level that would keep airlines operating sustainably. Thanks to the federal government, airlines received a $25 billion bailout in April, which allowed them to keep employees on staff at current pay rates through…


How Venmo has become PayPal’s pandemic secret weapon

Venmo logo displayed on a smartphone.
Venmo logo displayed on a smartphone.
Photo: Rafael Henrique/SOPA Images/LightRocket/Getty Images

The Covid-19 crisis shifted a large portion of American retail online virtually overnight, but the gradual post-pandemic reopening has led to an interesting second shift: Online payment companies have started moving offline. Last month, CVS Pharmacy announced plans to add PayPal and Venmo QR code payments in its 8,200 stores during the fourth quarter, taking a mobile-first brand right into the checkout line. The national retailer, which will be the first to accept PayPal and Venmo, said its goal with the multiyear deal was to keep consumers safe and encourage them to adopt touch-free payment. …


Economics nerds always complain that you should never compare stocks to flows. It’s meaningless to say that one company’s cash on hand is bigger than a country’s GDP, for example, because GDP is quoted in dollars per year and cash on hand is a cumulative quantity. It’s like saying a plane is faster than the distance from New York to Boston. Does not compute.

There’s a giant exception, though: stocks, bonds, loans, and other financial products explicitly exist to convert flows to ‘stocks’ in the economic sense. …


Here’s why investors are bullish on a fantasy sports betting company that went public when sports and casinos were shut down

General view of the DraftKings logo at the ribbon cutting opening celebration for its Las Vegas location.
General view of the DraftKings logo at the ribbon cutting opening celebration for its Las Vegas location.
Photo: Denise Truscello/Getty Images

It was a little over a month after the NBA season and NCAA tournament had been canceled due to the coronavirus pandemic. Spring training had been delayed, and the entire 2020 Major League Baseball season was in jeopardy. Despite all this, fantasy sports giant DraftKings went public in late April in a deal valued at $2.7 billion. The Boston-based company, founded in 2012, is part of a growing list of companies that have eschewed the traditional IPO and gone public via a reverse merger with a special purpose acquisition company (or SPAC), which is essentially a blank check shell company.


It’s always tempting to invent an elaborate story for why a particular investment is brilliant, why a trend is about to start (or reverse!), or why some incredible, sweeping change will alter the world and make savvy investors a profit.

But there’s an easier place to start, which is to assume that trends are going to be pretty much the same as they always were.

Investors diving into the music royalties business for instance may wonder: how can you predict which catalogs will perform? …


Food delivery is a losing game — so why is the most aggressive unicorn on the planet betting everything on it?

A Uber Eats courier rides a bike through the city center.
A Uber Eats courier rides a bike through the city center.
Photo: Matthew Horwood/Getty Images News

When Uber’s board of directors searched for a new CEO to replace Travis Kalanick during the summer of 2017, they landed on Dara Khosrowshahi, an investment banker-turned internet dealmaker. Khosrowshahi had spent nearly two decades of his career working at online travel giant Expedia and before that at IAC, a holding company with a portfolio of over 150 media and internet brands, where he learned the art of the business deal — buying, selling, and spinning off companies (IAC purchased Expedia in 2001). …


The traditional route to going public is too slow for companies that want to cash in on hype

Image for post
Image for post
Image: John Lund/Photodisc/Getty Images

Special purpose acquisition companies (or SPACs) have raised record amounts in the last few years. Some 28 SPACs have had IPOs this year, raising $8.9 billion, according to SPACData.com. At the current rate, that’s on pace to reach $16.5 billion by the end of the year, beating last year’s $13.6 billion and massively ahead of the 2011–2015 average of $1.7 billion.


This is the once-a-week free edition of The Diff, the newsletter about inflections in finance and technology. The free edition goes out to 8,221 subscribers, up 211 week-over-week. This week’s subscribers-only posts:

  • The UK as a Science Hub is an update on Boris Johnson’s plan (or, if you prefer, Dominic Cumming’s scheme) to make Britain a scientific powerhouse. The outlines of the plan aren’t new, but the opportunity is.
  • The Equity Risk Premium at 0% Interest looks at the implications of low real rates for tech companies. In equilibrium, low rates are good for equities because they raise the present…

Byrne Hobart

I write about technology (more logos than techne) and economics. Newsletter: https://diff.substack.com/

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