Dumb & Dumber — Cereal for Dinner, Caitlin’s Blocked Shot, and the Cult of Dalio

Goodbye, Leap Year! Hello, baseball! Yesterday I served up a couple of singles and doubles. Today, marketing moves and business decisions that qualify as Dumb & Dumber home runs. (OMG Shohei is married. Discuss.)

DUMB — Cereal for Dinner is GREAAAATTTTT!

In these inflationary times (even though food inflation is slowing, shhhh, don’t tell anyone), Kellogg is highlighting a year-old marketing campaign to pitch sugary, unhealthy cereals not just for breakfast, but for dinner, too.

Kellogg CEO Gary Pilnick doubled down on the idea when questioned about it on CNBC. He says cereal “tends to be a great destination when consumers are under pressure.” I thought a “great destination” was Paris, not Frosted Flakes. Why do CEOs talk like this?

Pilnick claims the campaign “is landing really well right now.” The interview, however, did not land well. The interweb’s universe of perpetually angry people lashed out at the CEO and highlighted his multi-million dollar salary.

Runner up: In response to more interweb rage, Wendy’s wants to make it clear that it has no plans to raise prices at peak hours, aka “surge pricing.” The company says CEO Kirk Tanner didn’t mean prices would ever go up when he told investors the chain would test “dynamic pricing” next year. Instead, he meant prices might sometimes go down at slow times of the day. Interesting, because he didn’t actually say that.

DUMBER — Unintended Consequences

America has enough laws. We are a nation of laws. If the government spent half as much time and energy enforcing the laws we have rather than coming up with new ones to fix the old ones they ignore, legislators could spend more time at home in their districts, assuming they actually live there.

The problem with many new laws is that they backfire. Here are two examples.

— Ten years ago, California banned the use of plastic bags in places like grocery stores. If you didn’t bring your own, you could purchase a bag of thicker plastic built for reuse. Except people didn’t reuse them. Plastic bag trash has gone up a lot. That bit of news was included in a report called “Plastic Bag Bans Work,” which highlighted when they don’t.

— While the Governor of California disputes a Bloomberg report claiming one of his friends and donors got a carve out from a new minimum wage hike, up in Seattle, the benevolent overlords who run the Emerald City are discovering how consumers react to such changes.

Seattle’s city council wanted to help food delivery drivers make a livable wage. So they passed a law mandating that drivers make a guaranteed amount per mile and per hour, or a $5 flat fee per order. The delivery companies — many of which are still unprofitable — passed along the $5 to customers.

In a strange and completely unexpected twist, orders have dropped off a cliff. “It’s definitely backfired,” one driver said.

DUMBERER — Nachogate

After years of delays, the Fontainebleau Las Vegas has finally opened its doors. It looks beautiful, with luxury suites starting at $5,000 a night, and tickets to a Super Bowl after party last month topped out at $55,000.

The hotel has also lost several executives in two months, including the Chief Operating Officer and Chief Marketing officer. Hmmmm.

But what qualified the Fontainebleau for D&D is “Nachogate.”

A customer named Mike Herman, who happens to run the slot operations over at the Rio, bought a $21 plate of nachos at the Fontainebleau’s Tavern restaurant. After waiting an hour, he received a concoction described by Eater Las Vegas as “a very sad-looking plate of six tortilla chips, a few one-ounce jars of condiments, and a handful of cilantro leaves — on the stem.” (I hate picking those stupid leaves off the stems.)

Other Vegas nacho merchants and their fans weighed in with extra spicy comments.

The Fontainebleau revamped the nachos after the brouhaha went viral. FWIW, the cilantro is still on the stem.

DUMBERERER — Covering Caitlin Clark

One of the best things about 2024 is Caitlin Clark. The University of Iowa basketball phenom can’t help herself when it comes to sinking three-pointers.

That’s exactly what happened Feb. 15th when she broke the all-time scoring record in women’s basketball.

Millions watched on the Peacock streaming network as Caitlin got closer to the historic basket. When the highly-anticipated moment arrived, she threw from the logo — as she often does — but as the ball went flying through the air, the TV production crew chose to nearly cover the basket with an ad for the Big 10 and State Farm. (You have to watch it.)

It wasn’t exactly Heidi and the NFL, but it was stupidly close.

Btw, if you don’t know the Heidi story:

DUMBERERERER — More Maui Mismanagement

Maui cannot catch a break when it comes to recovering from last summer’s fatal fire in Lahaina.

The latest tale of incompetence involves hundreds of so-called “tiny homes” meant to shelter survivors who are still living in hotels subsidized by the Red Cross and FEMA. Some of the small structures have already been built and delivered, but they sit vacant, mired in red tape. “The project has run into delays at nearly every step, from historic preservation rules to septic system regulations and water pressure requirements for the units’ fire suppression sprinkler system,” reports The Washington Post.

DUMBERERERERER — Moms Gone Mad

The modern version of crazy stage moms are mothers who create subscription services for their underage daughters even as pedophiles become subscribers. Some of these girls draw enough of a fan base to make quite a bit of money, according to an investigation by the New York Times, and parents sometimes engage in sexual “banter” with followers, reports the Wall Street Journal.

Creepy, right?

Well, then there’s Memphis mom Jasmine Moss. She wasn’t posting suggestive photos of her 5-year-old daughter in a bikini and charging for it, because that’s gross. Instead, she wanted to celebrate how hard-working her little girl is. The child helps Moss run a hair removal business out of their home.

To prove her point, Moss posted photos on Instagram of her daughter apparently waxing a grown woman’s vajayjay.

People saw the photos and complained to police, and Moss was arrested on charges of child neglect. The local newspaper reports the arrest affidavit states that Moss boasted on social media that her daughter “had participated in the waxing of twenty-four clients over a span of time exceeding eight hours.” Okay, now you’re just lying. No kindergartner has those mad skillz.

I’m gonna be generous and suggest that Moss was joking around. I’m no Mother of the Year, and I may have dressed up my kids in funny clothes once or twice, or posed them in silly situations, but I don’t recall there being naked adults involved.

Which leads to the real question: Who are these women letting their private parts be photographed as a little girl comes near them with hot wax?

DUMBEST — The Billionaire and His Principles

Ray Dalio is worth an estimated $15 billion. He made his fortune creating a hedge fund called Bridgewater Associates. I never paid much attention to him, but now I monitor his every prognostication, because I just finished a book called The Fund: Ray Dalio, Bridgewater Associates and the Unraveling of a Wall Street Legend.

It’s a stunning, page-turning, rapid-fire unmasking of a Wall Street titan that will leave you asking, “How was this allowed?”

Written by New York Times investigative reporter Rob Copeland, “The Fund” is a cross between John Grisham’s “The Firm” and George Orwell’s “1984.” Except it’s true, or at least true enough that Dalio hasn’t sued yet (though he reportedly did everything he could to stop the book from being published).

Copeland writes that over the years, as Bridgewater grew, Dalio spent less time focusing on financial strategy and more time on creating a cult-like set of “Principles” aimed at improving employee performance. He favored “radical transparency,” though it often involved in-house trials where executives were berated and humiliated, trials that were recorded and passed around as training videos.

Bridgewater spent millions to hire big names, like the guy who helped invent the Watson computer for IBM. These people were not brought in to improve the firm’s investment algorithm, but to turn Dalio’s growing and contradictory list of “Principles” into some kind of program to rate the staff.

Copeland claims that cameras and microphones inside the firm recorded interactions, and employees were encouraged to critique each other all day, every day. Many were so stressed they became ill. Why stay? They were making a fortune.

It sounds cruel. But here’s what’s just plain dumb. As Dalio worked tirelessly to turn his principles into a bible/app/program/whatever for optimizing performance, Bridgewater’s investments — its raison d’étre — consistently disappointed.

Last year, its flagship fund lost 7.6% in an up market. What’s radically transparent is that other hedge funds are doing much much better.

The book has been optioned by Amazon for a TV series. I recommend Robert Downey, Jr., in the starring role.

💰💰💰💰💰

SMART & SMARTER

Finally, in order to feel better about myself and not be so judgmental all the time, I’ve started highlighting business moves or financial decisions that warrant praise.

It’s not easy.

— Lyfting Lemons into Lemonade

Lyft proved you can snatch victory from the jaws of defeat. This month the company sent out an incorrect press release projecting a 5% increase in one of its margins. It was actually only a tenth of that, 0.5%. Oops. (Btw, the margin involved is the “adjusted EBITDA margin as a calculation of Gross Bookings,” a contorted metric public companies create to find something positive to say.)

Lyft shares skyrocketed nearly 70% on the mistake, and then fell when the company corrected the error. But the stock still stayed higher than before, because the earnings report was still pretty good.

CEO David Risher took responsibility for the mistake, blaming no one else. “It’s on me,” he said.

Refreshing. Wall Street forgave him for his honesty and accountability, two unnatural traits in finance.

Now, I understand that some investors lost money buying shares based on the error, though no lawsuits have been filed (yet). But, seriously, you have to wonder who poured cash into the stock of an unprofitable company based on a press release announcing an outlandish margin expansion. Think, people, think!

— NASA Rides Coattails at a Fraction of the Cost

Intuitive Machines successfully landed a craft called Odysseus on the Moon, and then it fell over. But the lunar lander is still working and sending back images and data.

Image by Intuitive Machines/NASA

There is much to celebrate in this one small step toward privatizing the space business. What I want to highlight is how NASA is acting in the taxpayer’s best interest.

NASA’s budget is always threatened with extinction, and so it’s had to behave more like a private company than, say, the Pentagon. The space agency has outsourced flying cargo and crew to the International Space Station to companies like SpaceX, savings billions of dollars, and it’s also contracting out efforts to return to the Moon.

I support this. We got GPS out of the space program. Also memory foam mattresses, scratch-resistant lenses, and velcro. Plus Tang.

Odysseus reportedly cost Intuitive Machines about $100 million, and NASA paid the company $118 million to fly six payloads to the Moon. In contrast, NASA’s own pre-astronaut lunar landers in the 1960s cost $469 million, or $4.4 billion in today’s dollars (and that’s back when spacecraft were much less complex).

Maybe if NASA had built and operated Odysseus itself, it would’ve nailed the landing on the first try. We’ll never know. But at $118 million a pop, give or take, NASA can fund (punches calculator) 37 private landers for the price taxpayers paid for the originals more than a half century ago (in today’s dollars).

I wish more government operated this way.

SOMETHING WONDERFUL!

There’s still plenty of beauty in the world. Take heart!

My new obsession has been watching Jackie and Shadow on YouTube. They’re two American Bald Eagles nesting above Big Bear Lake, outside Los Angeles. They take turns caring for their three eggs through rain, sleet or snow, and I’m inspired by their persistence and patience. The first eaglet is expected to start pecking through its egg momentarily.

And check this out! Next time you think you’re overwhelmed…