<?xml version="1.0" encoding="UTF-8"?><rss xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:atom="http://www.w3.org/2005/Atom" version="2.0" xmlns:media="http://search.yahoo.com/mrss/"><channel><title><![CDATA[Penn Wu]]></title><description><![CDATA[Thoughts, stories and ideas.]]></description><link>https://www.pennwu.com/</link><image><url>https://www.pennwu.com/favicon.png</url><title>Penn Wu</title><link>https://www.pennwu.com/</link></image><generator>Ghost 2.9</generator><lastBuildDate>Sat, 25 Dec 2021 15:18:40 GMT</lastBuildDate><atom:link href="https://www.pennwu.com/rss/" rel="self" type="application/rss+xml"/><ttl>60</ttl><item><title><![CDATA[What Motivates Me To Write]]></title><description><![CDATA[Gergely Orsoz, author of the blog Pragmatic Engineer, recently wrote a post How
I Motivate Myself to Write. He talks about how he was concerned about who would
be reading his blog.

> When I (re)started my blog, I was wondering who would be reading my articles. In
the end, I decided I don't care: I'll just write them for myself, as a
reflection of the ideas and observations I have come across.
> Approaching writing with this approach, it has been surprisingly therapeutic and
a tool that helps me]]></description><link>https://www.pennwu.com/my-perspective-on-writing/</link><guid isPermaLink="false">Ghost__Post__61b745770c01d3003b79d77e</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Mon, 13 Dec 2021 13:19:55 GMT</pubDate><content:encoded><![CDATA[<p>Gergely Orsoz, author of the blog <em>Pragmatic Engineer</em>, recently wrote a post <em>How I Motivate Myself to Write</em>. He talks about how he was concerned about who would be reading his blog.</p><blockquote>When I (re)started my blog, I was wondering who would be reading my articles. In the end, I decided I don't care: I'll just write them for myself, as a reflection of the ideas and observations I have come across.</blockquote><blockquote>Approaching writing with this approach, it has been surprisingly therapeutic and a tool that helps me reflect. Writing my ideas down, in a form that makes sense requires a surprisingly large amount of thinking.</blockquote><p>I've had a similar struggle in past blogging attempts. I thought blogging was about writing for other people. For months, I would write posts about topics I thought others would want to read, but weren't the topics I was most interested in.</p><p>Since then, I have decided to write about subjects I am interested in. I write about the stocks I've invested in, career milestones and progression, books I've read, and so forth. Writing has been a great way for me to process my thoughts. It's helped me make difficult decisions that I would otherwise procrastinate on.</p><p>So writing for myself is what motivates me to write. I'm thankful I learned that I can write for myself. That has made all the difference in my excitement to write.</p>]]></content:encoded></item><item><title><![CDATA[We Should Get Together (Book Summary)]]></title><description><![CDATA[I've lived in New York City for about three years. During that time, my main
priorities were my career and personal development. Everyone else I knew was
doing the same. They moved out to New York City in their 20's because of their
careers and a desire to learn more about themselves.

COVID showed me a different perspective. This summer, I returned back to the
city. Almost everyone I knew had moved away. It has helped me understand that
meeting people and building friendships is as essential as]]></description><link>https://www.pennwu.com/a-book-summary-we-should-get-together/</link><guid isPermaLink="false">Ghost__Post__61b509d10c01d3003b79d634</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Sat, 11 Dec 2021 21:00:41 GMT</pubDate><content:encoded><![CDATA[<p>I've lived in New York City for about three years. During that time, my main priorities were my career and personal development. Everyone else I knew was doing the same. They moved out to New York City in their 20's because of their careers and a desire to learn more about themselves.</p><p>COVID showed me a different perspective. This summer, I returned back to the city. Almost everyone I knew had moved away. It has helped me understand that meeting people and building friendships is as essential as career and personal development.</p><p>I started reading We Should Get Together, because I find it challenging to build great friendships. The book has been a delight to read so far. In particular, I read about the frequency section after I had a difficult conversation with someone who's really important to me, and it gave me a different perspective on the topic.</p><p><strong>Introduction</strong></p><p>I was surprised to learn that the average American hasn't made a new friend in the last 5 years. And that as we age, we get more isolated from the people around us. We feel lonely and have a harder time making closer friends.</p><p>The author also stated how we spend more time building our lists of followers and contacts than we do on building real, true friendships. Social media apps use "friendships", although we might consider most to be acquaintances.</p><p>But meaningful friendships serve a more important role than instant gratification. They've been shown to improve our health, increase our capacity to endure pain and help us live longer. Friends provide support, guidance and companionship against our loneliness.</p><p><strong>Friendship Landscape</strong></p><ul><li>How many durable friendships do you have?</li><li>Where are your closest friends located?</li><li>Who can you have real conversations with or turn to in a crisis?</li><li>If your life is filled with interesting acquaintances, do you know how to convert them into close friends?</li><li>What do you do when you discover you're surrounded by people who don't really know who you are?</li></ul><p><strong>Mental Blocks</strong></p><p>It also addressed mental blocks that people have to building friendships, which I think is highly relatable to anyone who's living in New York City.</p><p>The following blocks resonated a lot with my past thinking:</p><ul><li>I would rather use my free time to develop myself professionally and build my career.</li><li>I am more focused on reaching for success in my career.</li><li>I have been through some challenges in life so I have more walls to break through before I can open up and be vulnerable with new people that I meet</li></ul><p><strong>What's important in friendships?</strong></p><p>Compatibility, proximity, frequency and commitment.</p><p>Proximity assessment</p><ul><li>Friends who live less than 15 minutes away</li><li>Friends who live 20 - 60 minutes away</li><li>Friends who live 3+ hours away</li><li>Where do most of your close friends live in proximity relative to you?</li><li>Which list are you most and least satisfied by?</li><li>Does seeing the distance between you and your friends want to deepen any relationships with the people who are nearby?</li><li>Describe an ideal weekend in your life if you could walk to ten friends in under ten minutes?</li></ul><p>Frequency</p><p>If you could have more frequency with existing friends, what would that look like?</p><ul><li>Commuting to or from work together</li><li>Swinging by each others' houses after work to talk about your day</li><li>Eating an early breakfast or lunch together weekly</li><li>Exercising together a few times a week</li><li>Talking on the phone once or twice a week</li><li>Booking time together around play dates for your kids</li></ul><p>If your frequency hopes are out-of-sync with a friend, you have some decisions to make. The person who wants to have more frequency either has to find a way to be happy with less, or find another friend who can be as available or dedicated as they are.</p><p>The person with less frequency has to step up and offer more time to demonstrate that they value the friendship or need to understand if the other person wants to prioritize other people who can meet their connection needs.</p><p>Get your journal and create the following lists:</p><ul><li>Friends you spend time with each week</li><li>Friends you spend time with every month</li><li>Friends you spend time with every few months or seasonally</li><li>Friends you spend time with once or twice a year</li></ul><p>And answer the following questions</p><ul><li>How do you feel about the frequency with which you see your favorite friends?</li><li>Which people do you wish you saw more frequently?</li><li>What would be your favorite ways to increase your frequency with some of the people you listed?</li><li>How would your life be different if you could spend time with your favorite friends as frequently as you wanted?</li></ul><p><strong>Compatibility</strong></p><p>You share a strong respect for and curiosity about each other. You support each other feeling seen, heard and understood. There's five main types of compatibility - chemistry, communication style, lifestyle, socializing style and values.</p><p>Chemistry</p><p>Chemistry is when you and the other person have mutual enthusiasm for each other. It's the excitement you feel when you're around the other person. It makes you want to keep being around them and you don't know why.</p><p>Communication</p><p>What matters is that when you and your friends are keeping in touch, your communication styles pull you closer. How we communicate is deeply influenced by our emotional intelligence and our ability to express it.</p><p>Lifestyle</p><p>There's a crossover in activities you like to do and are capable of doing.</p><p>Socializing Style</p><p>If you only want to have two or three close friends, but your friend wants to be a social buttery with several dozen "close" friends, they won't have enough free time in their calendar to match the amount of time you want to spend with them.</p><p>In order for a friendship to avoid being a constant source of disappointment and feelings of neglect, you need to be realistic and honest about how many friendships you can actually maintain.</p><p>Vary your hangout formats so you're not getting bored and you get both of your needs met.</p><p>Values</p><p>Common ground and opinions are valuable, but I won't learn anything new or gain novel perspectives if I'm only surrounded by those exactly like mine.</p><p>Friendships provide a safe place to be totally vulnerable, uncomfortable, ask "stupid questions" and genuinely contribute to each other's development, empathy and understanding.</p><p>Compatibility assessment - <a href="https://weshouldgettogether.com/compatibility">https://weshouldgettogether.com/compatibility</a></p>]]></content:encoded></item><item><title><![CDATA[Apple Push Notification Service (APNS)]]></title><description><![CDATA[Today, I learned that Apple has a service that allows third party developers to
send notifications to applications installed on Apple devices.

In order to use this service, developers have to generate production and staging
certificates that are uploaded to a marketing service (ie: Iterable).

Iterable uploads the certificates to their cloud provider (ie: AWS), so that
they can send push notifications through AmazonSNS.

These certificates have a 1-year expiration, so they have to be renewed fo]]></description><link>https://www.pennwu.com/push-notification/</link><guid isPermaLink="false">Ghost__Post__61b0971eb498e7004819ef08</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Wed, 08 Dec 2021 11:37:47 GMT</pubDate><content:encoded><![CDATA[<p>Today, I learned that Apple has a service that allows third party developers to send notifications to applications installed on Apple devices.</p><p>In order to use this service, developers have to generate production and staging certificates that are uploaded to a marketing service (ie: Iterable).</p><p>Iterable uploads the certificates to their cloud provider (ie: AWS), so that they can send push notifications through AmazonSNS.</p><p>These certificates have a 1-year expiration, so they have to be renewed for continuity of service.</p>]]></content:encoded></item><item><title><![CDATA[My Next Chapter at Brigit - Tech Lead]]></title><description><![CDATA[In mid-September of this year, I was asked to take on the tech lead role on
Brigit's Membership engineering team. This was an incredible milestone for me,
as I'd had been working my way towards a leadership role.

Now that this opportunity is in front of me, I've slowed down to think about
what the expectations are for a tech lead, and how this opportunity is aligned
with my goals.

What are my aspirations?
I graduated college with a bachelors in Biology, with the intent to join the
University o]]></description><link>https://www.pennwu.com/becoming-a-tech-lead/</link><guid isPermaLink="false">Ghost__Post__614b43ed840454003b7b3321</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Mon, 22 Nov 2021 00:45:23 GMT</pubDate><content:encoded><![CDATA[<p>In mid-September of this year, I was asked to take on the tech lead role on Brigit's Membership engineering team. This was an incredible milestone for me, as I'd had been working my way towards a leadership role.</p><p>Now that this opportunity is in front of me, I've slowed down to think about what the expectations are for a tech lead, and how this opportunity is aligned with my goals.</p><h3 id="what-are-my-aspirations">What are my aspirations?</h3><p>I graduated college with a bachelors in Biology, with the intent to join the University of Pacific's 3 year dental program after spending a year learning the business side of dentistry. I joined a dental startup that summer and soon realized that I enjoyed the intersection of startups and software.</p><p>I pursued software engineering on the side, and eventually enrolled in a coding bootcamp. My dream was to build software at high growth startups, and eventually found my own tech venture. The transition was difficult since I hadn't taken any computer science classes in college.</p><p>For the last 4 years, I worked as a software engineer at startups - building new products and maintaining existing. ones.</p><p>Leading an engineering team, is the next chapter in this journey. I want to gain some practical experience with leadership and management before starting my own venture. Here are some of the things I'm looking forward to.</p><ul><li>Scale Brigit's products to millions more users</li><li>Develop a sharp intuition for business and technical decisions</li><li>Prioritize, scope and manage technical project delivery</li><li>Help my team grow into the next group of senior engineers and engineering leads at Brigit</li></ul><h3 id="what-makes-a-good-tech-lead">What makes a good tech lead?</h3><p>Recently, I've watched a video where <a href="https://www.youtube.com/watch?v=2dmh4e-px2s">Patrick Shu explains how he became a Google Tech Lead</a>. I found it enlightening, as I've been thinking about how one becomes a good tech lead.</p><p>In short, he describes a teach lead as a senior engineer who's the point of contact for the engineering manager, engineers, product manager, design, and other teams. As an engineer grows into a tech lead position, their focus shifts from individual work to managing and coordinating projects. This includes work such as</p><ol><li>Scoping</li><li>Project management</li><li>Approving design documents</li><li>Taking on new technical initiatives</li><li>Guiding coding direction</li><li>Mentorship</li><li>Helping new members of the team ramp up</li><li>Communicating the team's efforts with team members and stakeholders</li></ol><p>I've also talked with Shuo, my engineering manager, who has worked as a tech lead at Palantir and Brigit. He has explained that a good tech lead excels in four categories: technical ownership, mentorship, technical skills and communication.</p><p><strong>Technical Ownership: the person’s holistic scope and responsibility</strong></p><ul><li>Are they proactively identifying risks?</li><li>Do they think about the direction of the product and the tradeoffs that might be made to achieve various goals?</li><li>Do they keep business objectives in mind?</li><li>Do they keep the end to end customer experience in mind, outside of just the scope of their individual feature, but rather how it works with everything else.</li><li>Are they active about measuring things, whether those things are business metrics or software metrics?</li></ul><p><strong>Mentorship: the person’s ability to grow others</strong></p><ul><li>Are they effective at onboarding new team members and getting them up to speed?</li><li>Do they delegate work effectively?</li><li>Do they spend adequate time on code reviews, pairing, etc. as needed for their teammates?</li><li>Are they effective at collecting and delivering feedback, both praise and constructive criticism?</li></ul><p><strong>Technical skills: the person’s aptitude in their given area</strong></p><ul><li>Do they understand how the stack for their product fits together?</li><li>Are they an effective fallback for debugging gnarly issues?</li></ul><p><strong>Communication: the person’s ability to interface with other teams</strong></p><ul><li>Do they effectively communicate progress to stakeholders?</li><li>Do they preemptively relay delays?</li><li>Are they adamant about gathering continued requirements and feedback from stakeholders?</li></ul><h3 id="what-are-my-priorities-for-the-next-6-months">What are my priorities for the next 6 months?</h3><p>So far, I've been transitioning off the Credit Builder team. After Thanksgiving, I'll be formally transitioning onto the Membership team. I see this transition happening in three phases.</p><p>First, it's to onboard into the tech lead role. I want to go through some sprints with the team, and observe how they're running things. It'll help me understand what people expect and are having struggle with. It'll also help me understand the projects we are working on, and upcoming projects for the quarter.</p><p>Second, is to start tackling the "how we're building things" part of the challenge by taking on work and collaborating with other engineers on technical challenges. My expectation is that I'll have to coach, guide and teach other team members how to work through technical challenges and parts of the code they're unfamiliar with.</p><p>Finally, is to help answer the "what we're building" by collaborating with product and design on the problems we're solving, figuring out what to prioritize, and how those translate into engineering deliverables.</p>]]></content:encoded></item><item><title><![CDATA[Drive Shack: A Mini Golf Play]]></title><description><![CDATA[Drive Shack first caught my attention when I learned that Wes Edens, a
co-founder of Fortress Investment Group and co-owner of the Milwaukee Bucks
served as the Chairman of the Board.

While Drive Shack's historical performance has been tumultuous, the company has
recently made a huge pivot from American Golf, its legacy business, where it
owns, leases, and manages 56 courses. It is transforming into an entertainment
operating company, with Drive Shack - a Top Golf inspired theme and Puttery - a]]></description><link>https://www.pennwu.com/drive-shack-a-play-on-mini-golf/</link><guid isPermaLink="false">Ghost__Post__619a4e72d9dab300488c270b</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Sun, 21 Nov 2021 14:42:32 GMT</pubDate><content:encoded><![CDATA[<p>Drive Shack first caught my attention when I learned that Wes Edens, a co-founder of Fortress Investment Group and co-owner of the Milwaukee Bucks served as the Chairman of the Board.</p><p>While Drive Shack's historical performance has been tumultuous, the company has recently made a huge pivot from American Golf, its legacy business, where it owns, leases, and manages 56 courses. It is transforming into an entertainment operating company, with Drive Shack - a Top Golf inspired theme and Puttery - an adult in-door putting experience with drinks.</p><figure class="kg-card kg-image-card"><img src="https://penn-wu.ghost.io/content/images/2021/11/Screen-Shot-2021-11-21-at-9.14.07-AM.png" class="kg-image" alt="" loading="lazy" width="2000" height="821" srcset="https://penn-wu.ghost.io/content/images/size/w600/2021/11/Screen-Shot-2021-11-21-at-9.14.07-AM.png 600w, https://penn-wu.ghost.io/content/images/size/w1000/2021/11/Screen-Shot-2021-11-21-at-9.14.07-AM.png 1000w, https://penn-wu.ghost.io/content/images/size/w1600/2021/11/Screen-Shot-2021-11-21-at-9.14.07-AM.png 1600w, https://penn-wu.ghost.io/content/images/size/w2400/2021/11/Screen-Shot-2021-11-21-at-9.14.07-AM.png 2400w" sizes="(min-width: 720px) 720px"/></figure><p>As seen above, Drive Shack's future depends on the Puttery business. By the end of 2024, they expect to open 50 locations. With an estimated development cost of $7M - $11M for each location, that means $350M - $550M in debt financing, which is greater than the current valuation of the business.</p><p>The economics of the Puttery business is similar to restaurant chains like Shack Shake or McDonald's. There's an upfront cost in time and money, which is required to develop the Puttery location. Then, after opening, profits are used to pay back debt and/or are re-invested into new locations.</p><figure class="kg-card kg-image-card"><img src="https://penn-wu.ghost.io/content/images/2021/11/Screen-Shot-2021-11-21-at-9.20.42-AM.png" class="kg-image" alt="" loading="lazy" width="1232" height="798" srcset="https://penn-wu.ghost.io/content/images/size/w600/2021/11/Screen-Shot-2021-11-21-at-9.20.42-AM.png 600w, https://penn-wu.ghost.io/content/images/size/w1000/2021/11/Screen-Shot-2021-11-21-at-9.20.42-AM.png 1000w, https://penn-wu.ghost.io/content/images/2021/11/Screen-Shot-2021-11-21-at-9.20.42-AM.png 1232w" sizes="(min-width: 720px) 720px"/></figure><p>The closest comparison to Drive Shack is Topgolf, which was recently acquired at a $3.1B valuation, with around 60 venues across NA. Callaway's management cites that a Topgolf location does $17M in sales, with $5M in profit, and costs upwards of $40M to build a location. Those unit economics are close to what Drive Shack cites for its DS venues.</p><p>From a business standpoint, Puttery is more attractive. It takes less than 1/2 the time in time, about a 1/4 the time in cost, and ultimately provides a 25 - 40% yield on investment.</p><p>So if Drive Shack can open 50 venues by the end of 2024, their end of 2024 run-rate will be $100 - $150M in EBITA, with each location being able to break even in costs within 3 - 4 years.</p><p>I think the right way to value the Drive Shack business is by looking at Topgolf's acquisition. Topgolf was acquired at $3.1B with 60 venues doing roughly $4 - $6M in EBITDA, which means the business was valued at ~10x EBITDA. Drive Shack's business would be worth a comparable $1.5B by the end of 2024.</p><p>That's a 650% return in 3 years with a $200M market cap today. The play I'm more interested in are the $2.50 Jan 19 24 call options. I can buy them at $0.60/share today, which means that I'm paying for the option to buy shares at $3.10 at the start of 2024.</p><p>The target price at the end of 2024 is $15.75. So if the shares land anywhere north of $6 by the start of 2014, I'll make a similar return.</p>]]></content:encoded></item><item><title><![CDATA[Alibaba: Investing in the Chinese Amazon]]></title><description><![CDATA[In March, I invested in Alibaba, the Chinese cCommerce company that is often
known as the Chinese Amazon. Its business model reflects Amazon to quite a
degree, with four business segments: eCommerce, Cloud Computing, Entertainment
and Innovation Initiatives.

The thesis is quite simple. Alibaba will continue to grow its eCommerce
business, generating stable and significant profits for investors, while its
cloud computing business will scale and eventually replace eCommerce as the
dominant busine]]></description><link>https://www.pennwu.com/alibaba-investing-in-the-chinese-amazon/</link><guid isPermaLink="false">Ghost__Post__60d8f385231433003b0cfafa</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Mon, 05 Jul 2021 23:42:28 GMT</pubDate><content:encoded><![CDATA[<p>In March, I invested in Alibaba, the Chinese cCommerce company that is often known as the Chinese Amazon. Its business model reflects Amazon to quite a degree, with four business segments: eCommerce, Cloud Computing, Entertainment and Innovation Initiatives.</p><p>The thesis is quite simple. Alibaba will continue to grow its eCommerce business, generating stable and significant profits for investors, while its cloud computing business will scale and eventually replace eCommerce as the dominant business.</p><p>Today, China's cloud computing business is in its adolescence, with a market size that's ~10% of the United States and growing at ~60% annually.</p><figure class="kg-card kg-image-card"><img src="https://penn-wu.ghost.io/content/images/2021/06/Screen-Shot-2021-06-27-at-6.22.59-PM.png" class="kg-image" alt="" loading="lazy" width="1454" height="938" srcset="https://penn-wu.ghost.io/content/images/size/w600/2021/06/Screen-Shot-2021-06-27-at-6.22.59-PM.png 600w, https://penn-wu.ghost.io/content/images/size/w1000/2021/06/Screen-Shot-2021-06-27-at-6.22.59-PM.png 1000w, https://penn-wu.ghost.io/content/images/2021/06/Screen-Shot-2021-06-27-at-6.22.59-PM.png 1454w" sizes="(min-width: 720px) 720px"/></figure><p>Alibaba is the leading cloud provider in China, with a market share of over 40%.</p><figure class="kg-card kg-image-card"><img src="https://penn-wu.ghost.io/content/images/2021/06/Screen-Shot-2021-06-27-at-6.25.14-PM.png" class="kg-image" alt="" loading="lazy" width="2000" height="1135" srcset="https://penn-wu.ghost.io/content/images/size/w600/2021/06/Screen-Shot-2021-06-27-at-6.25.14-PM.png 600w, https://penn-wu.ghost.io/content/images/size/w1000/2021/06/Screen-Shot-2021-06-27-at-6.25.14-PM.png 1000w, https://penn-wu.ghost.io/content/images/size/w1600/2021/06/Screen-Shot-2021-06-27-at-6.25.14-PM.png 1600w, https://penn-wu.ghost.io/content/images/2021/06/Screen-Shot-2021-06-27-at-6.25.14-PM.png 2072w" sizes="(min-width: 720px) 720px"/></figure><p>This draws parallels to Amazon's AWS division, which has accounted for the majority of Amazon's operating profits for the last few years. Most recently, it made up 63% of the company's operating profits and earned $13.5B on $45.3B in revenue.</p><p>My conviction in Alibaba is that its cloud computing segment will scale over the next few years, while its ecommerce business will continue to return great profits.</p><p/><p>TODO: Figure out how much Alibaba is worth in 2-5 years.</p>]]></content:encoded></item><item><title><![CDATA[Macerich: My Play on Shopping Malls]]></title><description><![CDATA[Around February, I started looking into Macerich, which is a real estate
investment trust (REIT). Its business model is fairly simple. It owns shopping
malls across the United States, rents out the space to tenants whom pay rent,
and pays 90% of its taxable profits through dividends.

At first, I was a bit apprehensive about the stock. The news talks about the
retail apocalypse with Amazon putting shopping malls out of business - 1 in 4
malls is set to close in the next 5 years. I also prefer to]]></description><link>https://www.pennwu.com/macerich/</link><guid isPermaLink="false">Ghost__Post__60d8c3dfa83cc7003b60674d</guid><dc:creator><![CDATA[Penn Wu]]></dc:creator><pubDate>Mon, 05 Jul 2021 23:42:17 GMT</pubDate><content:encoded><![CDATA[<p>Around February, I started looking into Macerich, which is a real estate investment trust (REIT). Its business model is fairly simple. It owns shopping malls across the United States, rents out the space to tenants whom pay rent, and pays 90% of its taxable profits through dividends.</p><p>At first, I was a bit apprehensive about the stock. The news talks about the retail apocalypse with Amazon putting shopping malls out of business - 1 in 4 malls is set to close in the next 5 years. I also prefer to do most of my shopping online because it is more convenient. In addition, COVID has significantly impacted brick-and-mortar in 2020. Macerich is no exception, having to close its malls for an extended period of time.</p><p>These two events have weighed into Macerich's 2020 results, cutting its dividend from $3 in 2020 to $1.15 in 2021. Overall, these facts present a fairly pessimistic outlook on Macerich's future.</p><p>My perspective on Macerich's future started to change as I dug deeper. First, not all malls are created equal. Malls are typically graded from A to C. Class C malls, the bottom of the barrel, are often on the brink of bankruptcy as they have higher vacancy and lower-quality tenants.</p><figure class="kg-card kg-image-card"><img src="https://penn-wu.ghost.io/content/images/2021/06/Screen-Shot-2021-06-27-at-3.31.08-PM.png" class="kg-image" alt="" loading="lazy" width="1650" height="516" srcset="https://penn-wu.ghost.io/content/images/size/w600/2021/06/Screen-Shot-2021-06-27-at-3.31.08-PM.png 600w, https://penn-wu.ghost.io/content/images/size/w1000/2021/06/Screen-Shot-2021-06-27-at-3.31.08-PM.png 1000w, https://penn-wu.ghost.io/content/images/size/w1600/2021/06/Screen-Shot-2021-06-27-at-3.31.08-PM.png 1600w, https://penn-wu.ghost.io/content/images/2021/06/Screen-Shot-2021-06-27-at-3.31.08-PM.png 1650w" sizes="(min-width: 720px) 720px"/></figure><p>Macerich's malls fall into the Class A+, A and B+ categories. These malls are also in great demographic areas. Macerich's malls have the highest population density of its competitors, and the median/average household income is &gt;$80K.</p><figure class="kg-card kg-image-card"><img src="https://lh5.googleusercontent.com/RMs-2OYdp7k4nPbMle0SOGPoAaqyr30q7C4IKwybQS_Ziplrh10KjY8AtR_yOVCwplBt6OFL5FPJ6s82BBDhQRB2BF5x-U8xG-eRS1Rg2gvckcnvqH1t7UHVlWFrRTG34PZ29H1T" class="kg-image" alt="" loading="lazy"/></figure><p>In addition, by the time I started looking at Macerich, its malls had started to stabilize due to the COVID impact, with net occupancy around 88%.</p><p>Armed with these facts, my thesis was that as people get vaccinated, they will return back to malls for entertainment and shopping. The best shopping malls will see a rebound in traffic and earnings as they're located in areas of high population density and income.</p><p>If this thesis plays out, I believe Macerich will be worth about $30 - $40 by the end of 2023. As cash flow returns closer to 2019 levels, Macerich will adjust their dividend closer to $1.5 - $2. I'm also assuming investors want a ~5% dividend yield.</p><!--kg-card-begin: html--><table style="border:none;border-collapse:collapse;table-layout:fixed;width:468pt"><colgroup><col><col><col><col><col/></col></col></col></col></colgroup><tbody><tr style="height:0pt"><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Year</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">2021</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">2022</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">2023</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">2024</span></p></td></tr><tr style="height:0pt"><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">Dividend</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">$1.15</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">$1.15</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">$2.00</span></p></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"><p dir="ltr" style="line-height:1.2;margin-top:0pt;margin-bottom:0pt;"><span style="font-size:13.999999999999998pt;font-family:'Roboto Slab',serif;color:#000000;background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre;white-space:pre-wrap;">$2.24</span></p></td></tr></tbody></table><!--kg-card-end: html--><p>So far, Macerich has done well - my average cost was $13, and the stock is currently around ~$22, which is a 70% return-to-date.</p>]]></content:encoded></item></channel></rss>