Episode 81: DroneShield Goes From Slay to Nay, the US$170B Business You've Never Heard Of, Jamie Dimon Kills WFH, Overhead Luggage Stress and How Not to Treat Employees Badly
The guys chat about the DroneShield rollercoaster, the mysterious $170B adtech business, Jamie Dimon's WFH rant, the never-ending angst of overhead baggage, and the art of treating employees well.
The Contrarians catchup
Adir almost missed his flight to Sydney because the St Kilda Festival delayed his car service. To his driver: “You're making me pay for stress. And the reason I pay you is because I don't want the stress of this.”
Adam doesn’t understand why they close so many roads for the festival - “They shut a street two kilometres away. It has no bearing on the concert, which causes so much traffic. I reckon 100,000 people are getting impacted by a concert that maybe has 10,000 people there at best. And my rates are paying for this thing.”
Adir on council spending: “I’m secretly hoping DOGE comes to Australia and works its way through the councils.”
Adam’s son came fourth in an interschool swimming carnival out of a total of 600 kids, to which Adir shares sage life advice about focusing on input metrics, not output metrics.
If you’ve somehow listened to more than one episode of The Contrarians and missed the references to Hamilton W. Helmer’s ‘7 Powers’ of business strategy, here they are again: scale economies, network economies, counter positioning, switching costs, branding, cornered resource, and process power.
Adir goes into detail about why reading income statements is impossible these days. There’s simply too much good stuff to cover in this humble newsletter, so listen in from the midway point of the podcast.
The guys discuss one small company’s extreme work rules as shared with Adam, including not being able to touch your mobile phone. Adir says “the best businesses have very well-defined processes. But culture is about people doing the right thing where the processes end” and “these rules in a 12-person business will produce poorer outcomes than employing the right 12 people.” Listen to the end to hear the rules.
The Battle for Overhead Bins Is Raging
Adam references an article in The Wall Street Journal titled The Battle for Overhead Bins Is Raging. These Are the Rules to Play By, which explores etiquette for carry-on bags on full planes.
Believe it or not, Adir got in a scuffle with a rude Virgin worker who said the 7kg allowed in carry-on bags was the total amount across multiple bags, but crumbled from Adir’s retorts.
Adir: “It turns out nobody knows what you can take on a flight, possibly including the stuff.”
Adam: “Let's say you bring a small bag, like a handbag or a satchel or whatever. And you put it up the top and then somebody either crushes your bag with a massive hard case, or takes your spot in the overhead and you have to put your bag on your lap or underneath the seat.”
The mysterious $170B adtech business
Adam poses the question, what NASDAQ-listed advertising business is currently worth US $170B?
The answer? AppLovin, which “helps developers market, monetise, analyse and publish their apps through its mobile advertising, marketing, and analytics platforms.”
Over a billion people interact with the tool daily and the company is up 750% in the last year. It’s now on a 35x multiple.
Adam: “Name a single competitive advantage. This thing is Zynga all over again, but worth way more.”
Adir: “I feel like a lot of things are being convoluted here. One is, does this business have any long-term power or is it just going to be up and down? Two is, is somebody manipulating it? And three is, is there some dodgy stuff going on in the business?”
Jamie Dimon wants everyone wearing pants
In music to Adam’s ears, CEO of JPMorgan Chase, Jamie Dimon, went viral last week for criticising employees who work from home as “bullshit bureaucracy”.
Dimon said working from home led to slow decision-making, younger recruits who are being left behind, phone calls going unanswered (“I call a lot of people on Fridays, and there’s not a goddamn person you can get ahold of”) and it simply not working for those who want to hustle.
Adir: “My advice to him will be when you've got lots of billions of dollars and you're talking to people who are being flogged for 15 hours a day, you can just speak a little bit differently. But it is that industry, it's a brutal industry.”
Adam: “Younger people, they want to come into the office. They want that mentorship. They want to get ahead. They got two years stolen from COVID. It's the great misconception. It's the entitled laptop class of 40-year-olds who want to pick up their kids every day from school and get paid for it - they're the ones who are wanting to work from home.”
DroneShield goes from slay to nay
DroneShield, a “provider of counterdrone defense solutions”, is down 70% since mid-2024 off an unusual peak. The business listed in 2020 at $0.20 a share before hitting $2.34, and has settled back to $0.74 after being the ASX’s hottest stock last year.
Adir: “I think it's extremely difficult to deduce what the long-term competitive advantages are for these businesses, and which one globally is going to be the best at continuing to roll out the next win. Drone warfare is the predominant and fastest growing form of warfare in the world right now. The question I've always had about DroneShield is less about whether they are the company that can win this and more about whether I could realistically ever understand which company was likely to win this.”
Adam: “The margins have gotten worse, it's not profitable. There's a lot of competition. There's not much I like about this business, if I'm being honest.”
Five other stories worth following:
Dubai’s Bybit crypto exchange is out $1.5B after the largest digital theft in history. The platform has 60M+ global users and is the world’s second-largest crypto exchange by trading volume.
Warren Buffett-led Berkshire Hathaway reported a Q4 operating profit of $14.5B, a 71% increase. The surge was fueled by 302% growth in insurance underwriting from the year prior.
Ryan Cohen, GameStop CEO, has increased his personal stake in Alibaba to about $1B. The Chinese e-commerce and cloud giant has had everything go right in 2025 — in the S&P 500, only Super Micro Computer has enjoyed a larger gain so far this year.
Disney’s ESPN and Major League Baseball are parting ways, ending a 35-year media rights relationship after the 2025 season.
After a tough weekend for investors following the market’s worst day of 2025, it’s time to take a deep breath and see what Nvidia’s Q4 report holds on Wednesday. The world’s second-most-valuable company lost $600B in value after DeepSeek released its supposedly inexpensive AI model last month.