Wednesday, July 1, 2020

Tesla Now the Biggest Market Capitalization Automaker

I never thought it would be possible, but today Tesla, Inc surpassed Toyota Motor Corporation to be the biggest automaker by market capitalization: $208 billion versus $202 billion.

Does that make any sense? Consider the following:

  • Toyota trades around 1x book value and Tesla trades for 20 times book. 
  • Toyota sells 9 million vehicles a year and in 2019 Tesla sold 367k, or 1/25 as many.
  • Toyota trades for 0.8x revenue and Tesla trades for 8 times 2019 revenue.
  • Toyota trades for about 10 times earnings and has been profitable for 10+ years straight. Tesla has never had a profitable year.

Take a look at this chart of Tesla. At the end of 2019 the price and valuation went absolutely insane. It happened at the same time that their growth stopped!

July 1st Links

  • The analyses that I have seen are pretty complacent about EBITDA. They take a >$3 billion level as a given and then assume that since CBB and CNSL's debt (which both trade close to par) create those enterprises at >5x EBITDA, FTR will do the same. The problem is that if the ice cube continues to melt, not only will EBITDA be lower, but it will probably be worth a lower multiple. In the 2x2 matrix of unsecured recoveries above, there's really only a line of realistic outcomes: low EBITDA, low multiple; or high EBITDA, high multiple. Unless you can have reason to believe that the decline in customer losses is about to stop, there does not seem to be a margin of safety in the unsecured debt. If 13% of customers (net - more after figuring churn) left over the past two years, they probably went somewhere, since they are not likely just canceling their internet entirely. There must be competitors in Frontier's markets that are better or cheaper and are eating their lunch. For all we know, the most alert or savvy customers are the ones who just left and it is the beginning of an S-curve of the slower to react customers leaving too. [CBS]
  • According to a study in 2015, the Provo-Orem metro area is about as dissimilar to the rest of America as possible. Weighing factors such as race, housing, income and education, the study ranked Provo-Orem 376th of 381 of the United States' largest cities in terms of resemblance to the country. [wiki]
  • So to sum up, here is a woman who was (but for luck and heroic medical intervention) a murderess. Someone who was clinically insane. Someone who advocated death for half the population and then when pressed on it, allowed as how sterilization would be adequate. Someone who died alone in a flophouse, half eaten by worms because no one cared if she was dead or alive until the stench alerted the other residents. And this woman is lauded in our supposedly greatest newspaper as an overlooked hero, someone who should be a role model for young women. Her feminist work is separate from her insanity and not a manifestation of it. Girls, don't you want to be a feminist like Valerie Solanas when you grow up, so that you too will die alone and friendless in the world instead of surrounded by your loving family? (Her only mistake was not getting a cat (or a bunch of cats) so that they could eat her decaying flesh before the maggots got to it, but maybe the flophouse didn't allow pets.) But, OTOH our statues of truly great men – Grant, Lincoln, Columbus, Jefferson, etc. should all be torn down and destroyed. The portraits of the medical giants who conquered infectious disease should all be taken down. A society with such ass-backward values deserves to die and it WILL die. [Sailer]
  • I've listened to a couple of interviews with Moldbug. Haven't picked up anything of interest, can't pinpoint a single idea or position he is advancing, seems intentionally obscurantist and adds unnecessary complexity to every answer, constant smugness. Why is he rated so highly? [twitter]
  • In Crane the New York Court of Appeals made it abundantly clear that the statutory right of inspection, originally adopted in 1848, was intended to expand the common law right of inspection "by omitting the 'proper purpose' requirement." The statutory right of inspection provides a minimum threshold which a shareholder must meet in order to be entitled to inspect the materials in issue. That is to say, if a shareholder meets these minimum requirements, and requests the information in good faith, the court has no choice but to grant the inspection request. The shareholder has an absolute right to the information. In any event, as originally adopted the statutory right of inspection was intended only to supplement rather than replace the common law. Section 624, the present inspection provision, was not intended to work a substantive change in the law. Thus, the statutory right of inspection emerges as a supplement to the common law right which survives today. Given that a common law right of inspection exists, there is no question that plaintiff has demonstrated a "proper purpose" for requesting the shareholder information. Indeed, in Crane the Court of Appeals observed that the basis for the right of inspection is to permit a shareholder to protect his investment. This is precisely what plaintiff hopes to do by proposing an independent slate of directors for the SCM shareholders to consider. But in order to do so, he must have access to the list of shareholders entitled to vote. Absent the ability to communicate with his fellow shareholders, plaintiff's attempts to elect an independent slate of directors would truly be futile. The question remains whether plaintiff is entitled to all the materials requested. I think not. Plaintiff is entitled to inspect only insofar as is necessary to ascertain the names of his fellow shareholders who are entitled to vote at the October shareholders' meeting (shareholders of record as of September 11, 1980). This includes the most recent list of SCM shareholders, and transfer sheets reflecting all transfer of SCM stock subsequent to the date of the list up to and including September 11, 1980. Access to the other materials must be denied. Accordingly, defendant is directed to grant plaintiff access to the above materials as soon as possible from which materials plaintiff may copy or extract information, at his own expense. [Rockwell v. SCM Corp., 496 F. Supp. 1123 - Dist. Court, SD New York 1980]
  • In attempting to sustain its burden of proof, appellant contends that inspection should not be compelled where the stockholder desires to obtain the identity of other stockholders to convince them to sell their stock, since this does not involve the business of the corporation. Anaconda argues that a "proper purpose" should be determined with respect to the corporation and not in light of the interest to all the shareholders in relation to their stock holding. It claims that this position is supported by the explicit language of the Business Corporation Law and applicable precedent. We read this authority to compel the opposite conclusion. Although everything affecting the shareholders will not affect the corporation, the converse is not true. Whenever the corporation faces a situation having potential substantial effect on its well-being or value, the shareholders qua shareholders are necessarily affected and the business of the corporation is involved within the purview of section 1315 of the Business Corporation Law. This statute should be liberally construed in favor of the stockholder whose welfare as a stockholder or the corporation's welfare may be affected. To say, as Anaconda would, that a pending tender offer involving over one fifth of the corporation's common stock is a purpose other than the business of the corporation is myopic. Since the pendency of such an exchange offer may well affect not only the future direction of the corporation but the continued vitality of the shareholders' investment, inspection of the stock book should be allowed so that qualified shareholders may have the means to independently evaluate the situation. Nor do we consider it significant that the petitioning shareholder precipitated that which may affect the corporation or shareholders; the right adheres as one of property in the shareholder and one for the protection of that interest. [Crane Co. v. Anaconda Co., 39 NY 2d 14 - NY: Court of Appeals 1976]
  • For present purposes, the scope of Buckeye's right of access under the Lease is ambiguous. "In light of the general principle which gives the tenant free use of demised premises, any restrictions are construed narrowly against the landlord and ambiguities are resolved in favor of the lessee." This interpretative canon favors Buckeye. The extrinsic evidence at this stage of the case also favors Buckeye. The parties' past practice, before any dispute arose, provides strong evidence of how the parties themselves understood the provision. For at least twelve years, Buckeye and its customers have used Sico Road to access the Tanks. A barrier gate separates Sico Road from the adjoining public roads, so GT (or Diamond State) had to take action to allow Buckeye (or Magellan) and its customers to travel through the barrier gate to reach Sico Road and the Tanks. The fact that Buckeye and its customers have accessed the Tanks via Sico Road for twelve years is strong evidence that the Lease includes a right to use Sico Road to access the Tanks. GT observes that "[i]n giving sensible life to a real-world contract, courts must read the specific provisions of the contract in light of the entire contract." Reading the Lease as a whole indicates that the parties contemplated that the Tenant would have the right to access the Tanks via Sico Road. Under the Lease, the Tenant leases the dock "for the transportation and storage" of liquid petroleum. The storage function takes place at the Tanks. In the Lease, the Landlord committed to grant the Tenant an easement for the pipes that run under the Port and connect the dock to the Tanks. Customers retrieve the liquid petroleum from the Tanks using tanker trucks. The tanker trucks can only get to the Tanks using Sico Road. The business arrangement relies on the seamless transportation of liquid petroleum from the dock to the Tanks and from the Tanks to customers. If customers cannot use Sico Road, then the commercial arrangement unravels, and it becomes impossible to give sensible life to the real-world contract reflected by the Lease. [Buckeye Partners, L.P., et al. v. GT USA Wilmington, LLC]
  • Wouldn't it be nice if you could automate the discovery of competitor claims that read on to your prior patent specifications, even if an Examiner hasn't appreciated this fact? This can be done using deep neural network sentence encoders. [JDBIP]
  • I picked up my curbside grocery order during the COVID-19 pandemic in AZ, where we are having one of the worst outbreaks in the world on a per-capita basis. In a state of 7.3 million, there are over 70k confirmed cases. Just based on those numbers, there is more than a 50% chance that a person with COVID-19 is at an event with 90 or more people. The grocery store forgot to take off the security caps from some of the beverage bottles that I ordered. Instead of going back to the store and potentially expose myself to COVID-19, I took magnets from an old hard drive, 4 m3 screws, and 2 m4 screws, and made this security cap opener. [Thingiverse]

Tuesday, June 30, 2020

Books Read - Q2 2020

Read 15 books this quarter versus 16 in Q1 2020.

  • A Naturalist in Costa Rica (3.5/5) Before Bernd Heinrich, there was Alexander Skutch. A botanist and naturalist born in 1904, he moved to Central America in the 1930s to collect specimens before settling on a farm in Costa Rica in 1941, where he lived for the rest of his life. "The home-seeking wanderer hopes to find a spot which unites the advantages of all the most delightful places he knows, while excluding the disadvantages of each. Vain endeavor! The attractions of different localities are often mutually exclusive. We cannot have the salubrious atmosphere of the mountains along with the deeper and richer soil of the lowlands, a score of miles away. We cannot [have] a good road and proximity to shops and a post office along with unspoiled wilderness. We cannot have magnificent rain forests along with a dry climate. And everywhere there are plagues and annoyances, whether from the government, neighbors, rodents, snakes, insects, fungous parasites, or the weather." The valley where he settled was so isolated (then) by high mountains and forests that the inhabitants referred to all the rest of the world as "afuera" (outside). His farm was at 2,500' and over the decades he identified 277 species of birds on his property. He earned a living mailing specimens of plants to his "subscribers". More highlights: "Grazing animals possess marvelous powers of gustatory discrimination; when given the choice, they instinctively prefer those areas where the soil is richer and supports herbage better supplied with the nutritive elements essential to them." "One hummingbird to one tree is the rule, to enforce which sharp clashes sometimes occur between competing nectar seekers." We know this already from Colinvaux: "Predators commonly display an easy mastery over their habitual prey, rarely jeopardizing life or limb to secure it. A little reflection will convince us that this is how it must be. A hawk that subsists mainly upon snakes, including venomous kinds, seems to live dangerously... Yet to nourish itself and its young, such a raptor must kill hundreds of serpents in the course of a year; if as much as one per cent of the encounters proved fatal to the hawks, these birds, with their slow rate of reproduction, would soon become extinct. The hawk must learn to restrict its attacks to snakes that it is certain to overpower. Such is the case with all other predators. [...] With social animals that are rather evenly matched, the situation is different. A hive of bees may sacrifice many of its members to capture the stores of another hive, yet obtain this honey more cheaply than by independent foraging... In a world pervaded by strife, the fiercest conflicts, the only warfare properly so-called, occurs among social animals..." He felt great ecological concern and had no children, while his thoughtless neighbors have bred teeming hordes over the ensuing decades. He was also an atheist: "The very religions that insist that [God] revealed himself in definite places at certain historical moments tacitly admit that he has made no universal revelation of himself; he neglected whole epochs and races that doubtless needed him as much and were as worth of illumination by him as any people now alive."
  • Spillover: Animal Infections and the Next Human Pandemic (4.5/5) By David Quammen, author of The Tangled Tree which we read last year. Written in 2012, this essentially predicted the wuflu epidemic. "Infectious disease is all around us. Infectious disease is a kind of natural mortar binding one creature to another, one species to another, within the elaborate biophysical edifices we call ecosystems. It's one of the basic processes that ecologists study, including also predation, competition, decomposition, and photosynthesis. Predators are relatively big beasts that eat prey from outside. Pathogens (disease-causing agents, such as viruses) are relatively small beasts that eat their prey from within." Because the world's life forms are pretty closely related (tetrapods are less than 400MYO and mammals are less than 200MYO), pathogens, and viruses in particular, are often able to cross from one species to another. He goes to "wet markets," in Asia and Africa, and notes that Gunagdong is "a province of ravenous, unsqueamish carnivores, where the list of animals considered delectable could be mistaken for the inventory of a pet store or a zoo." Quammen notes that China in particular is "a culture where an infectious consignment of bats might arrive at a meat market as a matter of course." In the book he has conversations with the pandemic experts about the Next Big One. That will be a disease with "high infectivity preceding notable symptoms [which] will help it to move through cities and airports like an angel of death." The wuflu isn't the NBO, but what is surprising is how bad the secondary effects have been considering the low CFR. A respiratory virus with a CFR of 5%, which we were initially worried that wuflu might've had, would have been the end of the world. That's the most important realization from this pandemic: it's not going to take a 25% or 50% or 75% CFR to literally end the world as we know it if it has an R0 above 2. Something much, much smaller would do it. He mentions a paper called "Bats: Important Reservoir Hosts of Emerging Viruses". As the WSJ noted about wuflu, "Bats supplied most dangerous new diseases of the past two decades. The natural reservoir of rabies is in bats. Ebola, Marburg and other highly dangerous viruses come from bats. And most coronaviruses seem to originate in bats, including SARS and MERS." It's unclear why this would be. One theory would be that bats are a surprising one-quarter of all mammal species but actually, it seems like it might have bat immune systems might have more to do with it. High body temperature generated from flying leads to bat DNA damage leads to an immune system evolved to "fight but tolerate" viruses leads to bats are a ubiquitous viral reservoir. Here's some dimensional analysis of infectious disease: "The basic reproduction number, R0, is defined as the expected number of secondary cases produced by a single (typical) infection in a completely susceptible population. It is important to note that R0 is a dimensionless number and not a rate, which would have units of time−1. Some authors incorrectly call R0 the basic reproductive rate." Something in the book that was really shocking was about AIDS. There's reason to believe that HIV crossed over to humans between 1900 and 1910. Haitian medical workers were in the Congo after the Belgians left in June 1960 and brought it back to Haiti no later than 1966. A fellow named Joseph Gorinstein, based in Miami, created a plasmapheresis center called Hemo Caribbean to extract plasma from Haitians and bring it back to the U.S. The plasma extraction not only spread HIV among the Haitians but also brought it back to the U.S. By 1981, physicians in the U.S. notice homosexuals dying of normally harmless fungal infections (causing pneumonia). So HIV was in Africa for 70 years and in Haiti for around 20 years and no one noticed anything wrong! It is a good example of how cheap life is in r-selected, short life history places. Quammen's overall thought is that there is an outbreak of humans, combined with unprecedented expansion of human activity into biomes that are teeming with pathogens, which will lead to pandemics of zoonotic spillover diseases. At CBS, we have a rule that "anything parabolic is a short". Considering Quammen's twitter feed, I doubt he would be able to entertain the hypothesis that this particular pandemic was the result of a Chinese bioweapon. Also, even if the wuflu was an innocent spillover virus, Quammen would never go so far as to propose a cordon sanitaire around countries with bushmeat wet markets. Just like his fellow Bozeman writer, I am sure he thinks we should continue constant daily flights between all the world's viral sewers, and the intelligent readers of books like his should soberly decide not to have any children. (He's 72 and has "a family of large white dogs and a cat".)
  • How to Know the Birds: The Art and Adventure of Birding (3.5/5) Short essays about becoming a better birder over the course of a year, each essay paired with a common species: "200 birds, 200 lessons". Great drawings of birds, like the mother avocet and her babies. He mentions a term - one's "spark bird," "the species that triggers a lifelong passion, bordering on obsession, with birds." On microhabitats: "the slightly smaller and shorter-billed Least Sandpiper is less suited for foraging in standing water [than the Western], so it retreats to sandbars and mudflats where food is more readily procured." He really likes the ebird app for birding. Now, there are different schools of thought on birding. I don't personally want to do a bird census - counting and recording species - when I go birding. But the type of person who tries to "see" as many species as possible does, and they have all started using ebird to keep score. The result is that the neurotic birders are gathering intel and populating this database with bird sightings and locations. Where are green herons right now? You can search by species and time and find the hotspots. Or, you can check out a hotspot and see all the species that are being sighted by other birders right now. See bar charts for locations, print out checklists. It is the best thing I have ever seen for going birding in a new location and finding where exactly the species you want to see are right now. Author Ted Floyd also wrote a field guide and guides to Colorado and Nevada. There are different ways of measuring bird diversity, but the sky islands of southern Arizona are very exciting and the Gulf Coast and eastern seaboard are very good as well. Although (from Matt Boone): "The northern plains and Mississippi remain underbirded and contain the highest discrepancy between actual birds seen and likely birds in the area." Underbirded is a great concept. No counties in California, Oregon, Arizona, or New England have fewer than 1,000 ebird checklists submitted, but almost no counties in Mississippi have more.
  • Pale Rider: The Spanish Flu of 1918 and How It Changed the World (3/5) Three noteworthy things: (1) the reanimation of live 1918 virus, (2) "heterogeneity" in who suffered most from it, (3) the idea of a heritable influenza vulnerability. Fragments of the 1981 virus were recovered decades later: "Frozen and fixed lung tissue from five fall-wave 1918 influenza victims has been used to examine directly the genetic structure of the 1918 influenza virus. Two of the cases analyzed were U.S. Army soldiers who died in September 1918, one in Camp Upton, New York, and the other in Fort Jackson, South Carolina. The available material consists of formalin-fixed, paraffin-embedded (FFPE) autopsy tissue, hematoxylin- and eosin-stained microscopic sections, and the clinical histories of these patients. A third sample was obtained from an Alaskan Inuit woman who had been interred in permafrost in Brevig Mission, Alaska, since her death from influenza in November 1918." So, the heterogeneity of the coronavirus effects is nothing new. "In the Norwegian capital Kristiania (Oslo), for example, death rates rose as apartment sizes shrank." "The Italian race stock contributed nearly double its normal proportion to the state death toll during the epidemic period." Does the favorable Mediterranean climate mean resistance to colds and flu withers due to lower selection pressure? Regarding the heritable vulnerability - and this is a potential source of heterogeneity as well - there is an example of a young girl who suffered from ARDS from seasonal flu. She turned out to have "a genetic defect that meant she was unable to produce interferon, that all-important first-line defense against viruses." One researcher estimated that one in 10,000 people are unable to make interferon. The subject is "human genetic determinism".
  • Savage Spear of the Unicorn: Stories by Delicious Tacos (2/5) Collection of short stories from twitter Delicious Tacos. Writing is stream-of consciousness like the BAP book, and so it is pretty forgettable. (Here is an example of a coherent short story though.) Tacos has 13K followers versus 34K for BAP. What these guys should do instead of writing mediocre books is publish collections of their tweets. People with five-digit follower counts are artists, but their medium is the tweet. The Tacos book was very nicely printed with good cover stock. It would be very satisfying to read tweets that way. Tacos is an LA guy; he seems to live in Highland Park.
  • Virology (2/5) Not as useful as I had hoped, this is really more of an encyclopedia of some common plant, animal, and bacterial viruses. Three theories for the origin of viruses: regressive evolution (degenerate life forms), cellular origin (escaped from inside cells), and independent entities that evolved on a parallel course to cellular organisms. When the 1918 influenza virus hit, people did not really know what a virus was.
  • Among the Thugs (3/5) By Bill Buford, author of Heat and the upcoming Dirt - both culinary books yet this first book was about football hooligans while he was living in Britain. In order to write Heat, he worked for free in the kitchen of Babbo. In order to write about football hooligans, he became a football hooligan. (He doesn't mention committing any violence or vandalism, but he was present at enough matches and riots that the hooligans thought he was a hooligan, and the Italian police gave him a thorough beating at one riot.) One of the things that makes a good writing career is cultivating interesting life experiences to write about. After studying writing with John McPhee, Peter Hessler lived in China teaching English and then lived in Egypt during their revolution (and riots). He moved back to China - just in time to be writing about the epidemic and living in quarantine. So these three (McPhee included) have a similar ability to cultivate life experiences that are worth writing about. A few things that I think Buford missed regarding the hooligans, or failed to explore. First, there is something really wrong with underclass whites in Britain - read Theodore Dalyrmple for this. Perhaps it is no coincidence that they could not maintain a manufacturing sector? Second, why were the young men so angry and violent? Was it genetic or environmental? My theory about the violence being localized at football matches is: organized sporting events are used to channel young male group spirit and desire for violence and dissipate it relatively harmlessly. If different groups of hooligans, or hooligans and cops, are cracking each others' skulls then no one is doing anything about the elite looting the country and offshoring of jobs. Sportsball works amazingly well for this, and the low-IQ fans think that they are rebelling by maiming each other over feuds regarding which entertainment business franchise they "support". Watching British football matches in person exposes one not just to riots but to a "fatal human crush," as happened at Hillsborough Stadium in Sheffield, South Yorkshire, England, on 15 April 1989.
  • Hoover: An Extraordinary Life in Extraordinary Times (3.5/5) Bought this after reading the review by Slate Star Codex. Hoover lived from 1874 to 1964. He was the first student at the new Stanford University. He studied geology and went into mining, working first in the harsh Australian outback and then in China, where he survived the Boxer Rebellion. He worked for presidents Wilson, Harding, and Coolidge before serving his one term. HL Mencken said that Hoover was "the sort of man who, if he had to recite the Twenty-Third Psalm, would make it sound like a search warrant issued under the Volstead Act." Trump might join Hoover as a one-term president felled by the collapse of a gigantic bubble that began before his term. Hoover was far more intelligent than Trump, though. I wonder whether his mining textbook is worth reading? (Imagine Trump writing an engineering textbook!) Actually, Hoover might have managed a second term but he clung to prohibition, already almost 13 years old and a complete failure by the time of the 1932 election. Hoover had a much more interesting life than any millennial I can think of. He spent the decade starting age 47 as secretary of commerce. The current occupant of that office is 82 years old! I like Steve Sailer's theory that "#MeToo  appears to be younger women trying to push out of the really good jobs old guys who were aging better than" earlier generations. Federal judges who are in their 90s. Ever increasing presidential age to the point of dementia. Woodrow Wilson died three years after leaving office, at age 67. Harding died in office at age 57. Coolidge died four years after at age 60. Taft lived (as Chief Justice) for 17 years after leaving office, but died at age 72.
  • The Two-Income Trap: Why Middle-Class Parents Are (Still) Going Broke (2/5) Based on the title, I thought that Pocahontas understood the two income trap. Unfortunately, her book does not discuss positional goods or the way that oligarchs profit by flooding the country with cheap labor, driving up rents and land values and driving down wages. She recognizes that there is a bidding war - now recruiting two parents' incomes - for houses in "good" neighborhoods with "good" schools, but she is either lying or ignorant about what makes them "good." Everything she talks about is better understood by Steve Sailer or LoTB.
  • The Pilot's Manual: Access to Flight (4/5) This is an "Integrated Private and Instrument Curriculum. The most efficient way to train for your personal transportation solution!" Written by the Klapmeier brothers who founded Cirrus Aircraft, and the illustrations and examples are all of the Cirrus SR20. (Which is what PhilG flies.) A couple funny controversies in aviation: how do wings work, and what do the throttle and elevator controls do? Wolfgang Langewiesche (father of William Langewiesche) who wrote Stick and Rudder in 1944 was adamant that you use the throttle to change altitude (counter-intuitive) and the stick/elevators to control airspeed (by changing angle of attack).
  • Dirt: Adventures in Lyon as a Chef in Training, Father, and Sleuth Looking for the Secret of French Cooking (3/5) Brand new, by Bill Buford, author of Among the Thugs (a few books ago). In the April 12th Links, I had a New Yorker excerpt from Dirt that is the best part of the book, where he is baking bread at a small shop in Lyon. In Buford's cooking books, he has a tendency to go too far into the weeds on obscure European culinary history. With Heat, it was when and why cooks starting adding eggs to their pasta dough, and in Dirt it is whether French cooking derived from Italian (beginning in the 16th century). A friend says, "French cooking is the art of maximizing the highest tolerance in a dish for consumption of butter," and it certainly seems accurate from Buford's account. Rod Dreher wrote a good essay about the food and ingredients in southeastern France. Something else that made Heat inevitably better than Dirt is that Italian food is better than French. The best cooking tip I've gotten from these two books of his was from Heat, about how to reduce sauces. Although I have been cooking more with shallots recently (primarily in a skirt steak marinade for the grill), which is very French. One other noteworthy thing here - impressive how young his French cooking contacts died, of various kinds of cardiovascular disease: heart attacks, strokes, aneurysms. From smoking? Obesity? Restaurant drugs and drinking lifestyles? Wasn't clear. But many of the chefs that Buford met in the two books have been "morbidly obese". Sadly, they probably think it's the butter when it's almost certainly something else.
  • Strong Enough? Thoughts from Thirty Years of Barbell Training (3/5) Last quarter I read Congruent Exercise and I mentioned two concerns about Rippetoe's program: joint/ligament health and also "powerlifter belly" / insulin resistance from the high calorie diets. He gets pretty heated when the subject of "six packs" (people with low bf%) comes up and this attitude (and complete ignorance of diet and insulin resistance) makes me wonder how careful he is about joints. I thought it would be interesting to see what Coach Rip has to say about his thirty years of lifting. He mentions that he has "numerous back injuries" and can't squat more than 185 without a belt. He has "no ACL in [his] right knee" and "some work done on [his] left patellar tendon." He says, "accumulating injuries are the price we pay for the thrill of not having sat around on our asses." Coach Rip has had "motorcycle wrecks, horse wrecks, barbell wrecks, and overuse injuries." Regarding the deadlift: "If the muscles that keep the spine rigid are not contracted properly or are overcome by the load and pulled into a position where the spine is rounded, three problems result. First, the intervertebral discs are not designed to bear weight effectively anyway. This bipedal stance we occupy is rather poorly thought out, and discs are better at just separating bones than forming a weight-bearing surface between them. They only bear weight well when they are in the correct position, where the surfaces of the vertebrae they separate are oriented in the way the disc is shaped for them." I do agree with his position that "long slow distance training is not only a poor way to lose bodyfat and gain cardiovascular fitness; it may be the single best way (especially when combined with the FDA's dietary recommendations) to lose muscle mass ever devised." He mentions that a fellow at his weight club died at age 45 from complications resulting from surgery on an ascending aortic aneurysm. (And a few years before that the same fellow had "completely ruptured" his patellar tendon!) Two books in a row with people who have far-out lifestyles that cause aneurysms. I do appreciate Coach Rip's high agency approach. He believes in personal responsibility and self improvement. But it seems like he is a "short life history" guy. Intellectual stimulation is more congruent with long life history than physical stimulation.
  • Two Cheers for Anarchism: Six Easy Pieces on Autonomy, Dignity, and Meaningful Work and Play (2/5) James C Scott is best known for Seeing Like a State and Against the Grain (and, also) and his work on the history of states has made him somewhat anti-statist or anarchist. By "somewhat," I refer to his statement, "unlike many anarchist thinkers, I do not believe that the state is everywhere and always the enemy of freedom." The only example he gives is the U.S. Army integrating the Little Rock schools at bayonet-point. (You have to remember that Scott was "mezmerized" by Ho Chi Minh and Mao Zedong in the 60s.) He observes "virtually every major successful revolution ended by creating a state more powerful than the one it overthrew." Another observation: elites find resistance movements with leaders easy to deal with (bribe), it's the ones with no leaders that they find threatening. In the 1930s and 1960s, the resistance that the U.S. state was facing had "no one to bargain with, no one to credibly offer peace in return for policy changes. The menace was directly proportional to its lack of institutionalization." And, "so far as system-threatening protests are concerned, formal organizations are more an impediment than a facilitator." Which means that "organized interests [like unions or parties] are parasitic on the spontaneous defiance of those whose interests they presume to represent." He talks about how FDR and MLK used speeches (whistle stops) to develop political platforms. The listeners wrote the speeches and platforms for them with their feedback: "the themes that resonated grew; those that elicited little response were dropped." Trump did this too - he never wanted to build a southern border wall but it was a huge applause line at rallies, so he was eventually promising a fantastical 40 or 50 foot tall wall. Speaking of elite overproduction: "thwarted petty bourgeois dreams are the standard tinder of revolutionary ferment"!
  • Concepts and Case Analysis in the Law of Contracts, 7th Edition (3.5/5) We have quoted or mentioned contracts professor Marvin Chirelstein on the blog several times. Thanks to heavy smoking, he was intellectually productive into his late 80s. "The Contracts course should be the occasion for a loss of innocence. The cases are full of self-serving stories, some funny, some sad. Many of these stories, however, perhaps most, are either partly false or (more often) true as far as they go but not the whole story by any means. Students should learn skepticism from this, call it healthy skepticism if you like, and while that is rather a sour habit of mind to go about the world with, I think it is a necessary component of the professional outlook." "Students are sometimes troubled by the rather stark fact that the law does not actually require a promisor to keep his promise, but instead treats the payment of money damages as a wholly adequate remedy for breach." "The injured party may recover from the party in breach a dollar sum sufficient to put him in as good a position as he would have occupied had the contract been performed in full. This principle - easily the most important single idea in the whole contracts field - is referred to by convention as the 'expectation damage' rule..." That rule "operates to deprive the [breaching party] of any benefit from indulging in non-cooperative conduct." "A promise to hold an offer open... is not binding... and can always be withdrawn on notice to the offeree." (Otherwise it would be an option contract - requires consideration.) "The doctrine of promissory estoppel has long engaged, sometimes inflamed, the imagination of contract theorists... at least one influential commentator predicted that the traditional idea of contract based on bargained-for consideration and mutual assent was on its way to extinction, and would be replaced by the less restrictive and more dynamic concept of reliance." "It followed, or seemed to follow, that if contract enforcement was seen to be the righting of a wrong and essentially compensatory, then what had once been regarded as a distinct field of law called 'Contracts' would blur and fade and then reappear in a new guise as a branch of the law of Torts." "Lay people sometimes imagine that the law favors literal construction and strict formalism in the interpretation of contract terms. Lawyers know (or soon learn) better, and the requirement of good faith, which can be gravely cited to one's client as a well-established legal principle, makes it easier to counsel decent conduct on occasion and insist on caution and restraint." Something interesting regarding unilateral mistake, where a seller "simply doesn't know as much about his property as the well-informed buyer to whom he sells it:" "We cannot allow contract rules - and certainly not the modest doctrine of mistake - to reduce or eliminate the rewards claimed by those who invest in information gathering."
  • A Naturalist on a Tropical Farm (4/5) Another Skutch in Costa Rica book, written after the one we started the quarter with. This one has excellent illustrations by Dana Gardner. (He met Skutch in Panama and they worked together for the next 28 years. See his prints.) Skutch's farm was in the valley of El General, at the head of the Rio Terraba on the Pacific slope of southern Costa Rica. Skutch was a vegetarian (he had a profound, almost Ahiṃsā respect for living beings) and he grew all the food he ate on his own farm, in addition to being a professional naturalist. His staples were things like corn, rice, sugarcane, bananas, milk, chicken eggs. He said that "varieties [of rice] used in Central America thrive on well-drained ground. Indeed, rice, a thrifty plant, yields fairly well on poor soil where maize, which much feed gluttonously in rich earth to form is heavy ears, is hardly worth planting." He lived to be a week short of 100 years old despite not eating any meat! On the other hand, he never ate any pesticides and breathed clean air, never had a boss and was enthralled with his work. Skutch discovered “helpers at the nest” or what is now called “cooperative brooding”. He wrote his final book at age 96. Skutch and his wife never had children; I wonder whether it was because they were anti-human. He wouldn't have agreed with Bill Gates: "to undertake general measures to reduce infant mortality in a greatly overpopulated country with a stubbornly high birthrate is misapplied charity, which will ultimately produce much more misery than it alleviates; the resulting increase in population will intensify poverty and crime and perhaps bring on ever more disastrous famines." He mentioned, "the scientist is sometimes overcome by paralyzing doubts about the value of the facts he toils to discover; the artist knows intervals of surfeit or disgust with his art; the philosopher may become entangled in bewildering mazes of speculation. I had known something of this devastating state of mind." He mentions that "again and again, when I tried to substitute scientifically approved procedures for seemingly wasteful and inefficient local practices, I ran into trouble and reverted to the local methods." See James C Scott! He says, "to give a child or an animal a name suggestive of a quality that one hopes the newborn creature will eventually possess is to invite disillusion." Talking about how to balance human needs versus other organisms, among five approaches he writes, "we might adopt a more Stoic interpretation and favor the animals whose behavior appears noblest or most admirable. We see many birds and mammals cooperating together, toiling to nourish and protect their young, at times risking or even sacrificing their lives to protect their progeny; and these activities suggest moral or quasi-moral attributes that set the warm-blooded animals above the majority of reptiles, amphibians, and fishes, for in these classes of vertebrates true cooperation and the nurture of offspring are exceptional." Similarly: "Many mammals and birds are likewise inveterate predators; but, by attachment to their mates, devotion to their young, a more or less developed social life, and often, too, certain indications of playfulness and joy in living, they may stir our sympathy. The serpent is stark predation, the predatory existence in its baldest, least mitigated form. It might be characterized as an elongated, distensible stomach, with the minimum of accessories needed to fill and propagate this maw - not even teeth that can tear its food. It crams itself with animal life that is often warm and vibrant, to prolong an existence in which we can detect no joy and no emotion. It reveals the depths to which evolution can sink when it takes the downward path and strips animals to the irreducible minimum able to perpetuate a predatory life in its naked horror. The contemplation of such an existence has a horrid fascination for the human mind and distresses a sensitive spirit." Skutch wanted to live on a planet with only primary photosynthetic producers and herbivores, no predators, e.g. "Birds eat the juicy berries and spread far and wide the small, indigestible seeds, from which more trees and shrubs grow to provide more pollen for industrious bees. This benign cycle, in which every participant is benefited and none is harmed, is one of evolution's finest accomplishments, proof that a blind, undirected process, which depends on random variations and produces much that we abhor, and much that we regard with mixed feelings, can also create much that we unreservedly applaud."

Saturday, June 27, 2020

Neil Campling: "Who’s going to be the next Wirecard?"

He has 20 warning signs in trying to determine the next "Big Disaster" like Wirecard. Note, he has someone specific in mind who checks all of the following boxes:

  1. Massively promotional CEO who actively looks for publicity and spends a lot of time courting Wall Street/investors etc and is very media savvy.
  2. Huge CEO/Senior Management compensation package NOT tied to cash flow or Earnings but just to Sales and/or the stock price, creating the possibility of egregious wealth creation if the stock goes up a lot. Huge pledging of collateral by the CEO in return for margin loans to fund a billionaire lifestyle.
  3. Management compensation generally way out of line with peers despite notably less profitability.
  4. Glossy future projections that have a habit over a long period of being proven to be too optimistic.
  5. Questionable product quality, ie defects (boon??) or debatable technological leads over similar products.
  6. Some evidence of self certifying, whether it be through strange international subsidiaries or not having an Auditor or experiencing unusual and slightly sudden end of quarter surges in revenues, up to and including the last day.
  7. Unusual or unverified and large Receivables in a business where the product is exchanged for cash up front.
  8. Evidence that the company is existing on a shoestring, not paying Suppliers, Employees, Landlords etc.
  9. Unusual margin progression, with SG +A going down over time despite a rising global footprint, or GM's staying flat despite much lower ASP's over time, for instance.
  10. High levels of Gross Debt. Cash balances not matched by notable Interest Income thereby suggesting they are fraudulent.
  11. High employee turnover, especially in the LEGAL and FINANCE areas. Co-founders or Board members leaving.
  12. Aggressive pursuit via paid third parties and/or “heavies” of any critics or people who have too many questions, which in any case are “boring”.
  13. Dislike of Hedge Funds.
  14. Possible Narcissistic Personality Disorder on the part of the CEO. Additional points if he/she uses Twitter a lot.
  15. Large cabal of outcasts/weirdos/bloggers/Twitter groups who have been saying for years that everything is amiss but just get a lot of criticism because the stock keeps going up ergo they must be idiots.
  16. Slowing top line growth rate despite all the hoopla and supposed “growth stock” status. Evidence of competitors rapidly eroding unsustainably high market share.
  17. Loss making. Ideally never made a profit but likes to pretend it did or failing that, that it will for sure in 2-3 years due to highly questionable new products. But the 2-3 years gets pushed out constantly.
  18. Extensive use/exclusive use of NON-GAAP Accounting and occasional bridging to get from a Net Loss to a (small) Net Profit via poorly explained one-offs/Other Items/unusually large Credits of some kind in a desperate attempt to get into an Index by illicit means.
  19. Weak Board, preferably also small and ideally in hock in some way to the CEO, who therefore do his/her bidding. Helps if some of them are related physically to the CEO.
  20. Gullible media, gullible analysts and dozens of paid bloggers who produce Price Targets out of nowhere based on “Option Value” or put another way products that are at least 5 years away from having any material impact.

Friday, June 26, 2020

Friday Night Links

  • This "little model that could" is proving to be the no-pay, no-fame, no-acceptance academic-mathematical equivalent of, say, some college undergraduate inventing an optimal radio receiver frequency arrangement, now in use by the circuitry of your smartphone, as part of an independent senior project he decided to work on weekend after weekend a quarter century ago. [Ed Suominen]
  • Over the past two weeks, what began as a simple new usage example to include with my free, open-source evolutionary parameter-finding software wound up turning into something of a ghoulish personal challenge: to identify a statistically plausible mathematical model that would fit decently with the exploding numbers of reported Covid-19 cases in my beloved but increasingly broken country, the United States of America. I've made lots of refinements to the code and its underlying modeling over that time, and discussed that along with some projections (accompanied by important disclaimers, which also apply here) along the way in my blog posts of March 19, March 22, and March 25. Along the way, I tried several different approaches to modeling this thing: the logistic growth model, the power law with exponential decay, and even a linear combination of the two, always accompanied by a small linear term. What increasingly intrigued and frustrated me, though, was the inability of any of those models to deal with a slight "flattening of the curve" that has become apparent in the U.S. national numbers of recent days. [Ed Suominen]
  • More often than not, the best art to apply against a patent has not been cited in the portfolio. Deep neural network sentence encoders can be a very powerful tool to help you automate the process of reviewing and applying an inhuman number of potential invalidating references against patent claims in a short period of time. [JDBIP]
  • In my prior article “Validity and the Duty of Candor”, I discuss the importance of filing Information Disclosure Statements during prosecution of patent applications for satisfying the duty of candor under 37 CFR 1.56.    The benefits of comprehensive art citations also can help include strengthening the patent against the prior art:      establishing the state of the art at the time of the invention, and      strengthening the resulting issued patent if issued issue in view of and with consideration of the art.  In other words, with more comprehensive art citations during prosecution, a patent will be more likely to withstand attacks under 35 USC 102 and 35 USC 103.  That is, so long as these citations are helpful to the Examiner, and the public (and not merely overwhelming). [JDBIP]
  • China has a highly unusual business environment- the government is currently holding 2 Canadians hostage to benefit a private company (Huawei). Those with the right connections regularly use government resources for their own benefit. As far as investing in Chinese stocks go, it is a trap for foreign capital: Massive fraud. The CCP encourages mainlanders to be racist, nationalist, and xenophobic. Because of state-sponsored racism and xenophobia, there are far fewer (or no) consequences when somebody cheats a foreigner versus an ethnic Han Chinese citizen. The CCP often exploits foreign capital and sponsors the theft of intellectual property. Relations between the CCP and most developed countries will deteriorate because the CCP has been increasingly antagonistic towards other countries. The resulting trade wars will hurt China's economy and make the environment sketchier for foreign capital. [Glenn Chan]
  • This newsletter has historically been Bon Appétit's Letter from the Editor. Until we have a new editor in chief, the BA and Epicurious staff will use this platform to update you on the work we're doing to address racism and biases at the brands, both internally and in our editorial coverage. This week, BA's research director Joey Hernandez talks about how we're auditing our existing recipes to add cultural context and address appropriation and tokenization. [Bon Appétit]
  • So, I kind of deleted the blog. Sorry. Here's my explanation. Last week I talked to a New York Times technology reporter who was planning to write a story on Slate Star Codex. He told me it would be a mostly positive piece about how we were an interesting gathering place for people in tech, and how we were ahead of the curve on some aspects of the coronavirus situation. It probably would have been a very nice article. Unfortunately, he told me he had discovered my real name and would reveal it in the article, ie doxx me. "Scott Alexander" is my real first and middle name, but I've tried to keep my last name secret. I haven't always done great at this, but I've done better than "have it get printed in the New York Times". [SSC]
  • Non-fiction writers can have careers where they churn out 4/5 and 5/5 books, like John McPhee. (He has a stellar batting average.) Fiction writers do not seem to have this ability. (This may have to do with the fact that fiction is autobiographical and people only have one biography, hence only one good story in them at most.) Stephenson lives in Seattle on Lake Washington. It turns out he is (or has become) a tiresome shitlib. He thinks if left to their own devices, rural Americans (in Iowa!) would spray gunfire like opium addled Afghans, and also literally crucify people for minor violations of the Old Testament. He calls it "Ameristan." He thinks the biggest problem with the internet is that it is not sufficiently censored; that people in "Ameristan" are allowed to use social media for "shared hallucinations". [CBS]
  • All health, beauty, intelligence, and social grace has been teased from a vast butcher's yard of unbounded carnage, requiring incalculable eons of massacre to draw forth even the subtlest of advantages. This is not only a matter of the bloody grinding mills of selection, either, but also of the innumerable mutational abominations thrown up by the madness of chance, as it pursues its directionless path to some negligible preservable trait, and then — still further — of the unavowable horrors that 'fitness' (or sheer survival) itself predominantly entails. We are a minuscule sample of agonized matter, comprising genetic survival monsters, fished from a cosmic ocean of vile mutants, by a pitiless killing machine of infinite appetite. (This is still, perhaps, to put an irresponsibly positive spin on the story, but it should suffice for our purposes here.) [Nick Land]

Monday, June 22, 2020

June 22nd Links

  • The deeper hit to America is: how many asylum seekers will it take to destroy American morale? What number leave and break American spirits? Is it a small number like 50,000? Right now, a little over 3,000 renounce their citizenship each year, which is tiny, but remember that there's no foreign welcome mat geared towards the purpose. England might be a harbinger of things to come, as the UK loses over 100,000 native Britons each year and has so for a decade. Great Britain is circling the drain. Is it a mass exodus of 10 million? Think of the rush of talking to someone without the fear of the PC police. Magnify that by a town, a city, a state. How fast does the wave turn into a tsunami? The cry of the elderly to grandchildren would become: "Go East, young man." What does America say, if in the first year of the Russian Amerikanskiy Zone program 100,000 Americans leave the shores to escape the USG yoke, followed by 250,000 the next year and maybe 500,000 the third year? This would be in contrast to USG immigration policy focused on semi-literate Third Worlders and diseased gays. There would be silence. There would be no way to frame it positively. [links]
  • You joke (I think), but how aware are people that we narrowly skirted a third world-style coup here in the US just two weeks ago? You may recall that in the first week of June, the Antifa-Soros Media Industrial Complex was calling for a million "protesters" (aka rioters) to converge on Washington DC where the President was bunkered at the White House. In the run up to that June 6th weekend, the (Dem) DC mayor stood down law enforcement and National Guard, and the Joint Chiefs of Staff(!) started issuing strange public memoranda implying that they were on the side of rioters rather than the President (no reference to chain of command, "cannot abide divisiveness and hate", etc.) This is the classic Deep State color revolution checkmate: the imported mob storms the presidential palace while converged insiders preemptively scupper any official reaction. Whether the President flees or is sacked, he is discredited, and a new figure takes the helm "because of the unprecedented conditions of these turbulent times". AG Barr, head of the Depatment of Justice and one of the smarter and more perceptive guys in the White House, was sufficiently alarmed by the situation that he replaced the Federal troops around the White House (loyal to the JCS) with Department of Justice troops whose loyalty he could be more assured of. You know that moment in foreign wire service dispatches or Tom Clancy novels where different military cadres loyal to different government factions maneuver around the Capital to determine who will be in power next week? That happened here two weeks ago and almost no one noticed. That it didn't work this time (too few Antifa) doesn't mean the strategy is off the table. Notably, the deficiency on June 6th wasn't too few converged insiders (DC is awash with them, Barr notwithstanding) but too few outside mobbers. They'll be sure to rectify that next time. Just have to whip up a little more public frenzy and fund Antifa cells a little more... [Sailer]
  • We made the ferry to Seattle. The next morning, a hotel valet freed the muddy BMW from its hold. I found the footwells packed with detritus so specific to Northwest road trips: a crumpled coastal map, paper cups stained with double espresso, floor mats caked in Douglas fir needles. The car idled, defiant, next to a spotless Rolls Royce. I thought back to Cape Flattery's trailhead, when I wedged the BMW between lifted Toyota Tacomas. This is a deeply aspirational but supremely versatile vehicle, as all 3-Series have been. [Road and Track]
  • I really didn't want to post this. I love the Model Y, it's a great car and I really love Tesla. However... Caveat Emptor: My Model Y is leaking water through the headliner. Bring a bottle of water to delivery and test the seals on the roof of your model Y (around the edges of the glass roof). Shared this video (see attached GIF) with Tesla >48 hours ago and am shocked they haven't jumped all over this...crickets so far. Thinking I will want to return the vehicle. This is an incredible miss by the delivery team. I have to imagine the glass roof has to be removed, seals replaced and that the headliner and some electronics will have to be replaced, too...but again, no response from Tesla yet. Help me out here, Tesla, this thing cost me >$65k and can't be driven in the rain??? Stay tuned to see if Tesla does the right thing. Interested to hear what you all would do if your Model Y wasn't remotely waterproof... [TMC]
  • Here, the three highest ranked known references are owned by Google, Stanford, or have Lawrence E. Page listed as an inventor. It makes sense that these would be the most similar. The specifications are likely nearly verbatim or cover the same system. The highest ranked third-party patent is Patent No. 5,848,407, Ishakawa et al., assigned to Matsushita Electric Industrial Co. A heat map (a red color scheme is used here to signify the heat map is for a reference that pre-dates the claims) and claim chart can be automatically generated to help analyze the strength of the patent relative to this art reference. [JDBIP]
  • Folks in Diesel land will toss around the phrase "bulletproof" alot because the engine can loaf at 1200rpms on its way to 500,000 miles on the original pistons/rings/head gasket/whatever. Ok, fair, enough. But if you scrutinize most owners experiences they'll routinely drop $2k/year or more on mechanical repairs in addition to maintenance activities. I've known a few high-miler diesel ford owners who ran ~$4k a year in ownership expenses for repairs and maintenance for several years in a row. 3 years/50-60k miles and they've got $12k of receipts on their "bulletproof" vehicle. [Jalopnik]
  • The picture of King Charles II. was often set up in houses, without the least molestation, whereas a while ago, it was almost a hanging matter so to do; but now the Rump Parliament was so hated and jeered at, that the butchers' boys would say, 'Will you buy any Parliament rumps and kidneys?' And it was a very ordinary thing to see little children make a fire in the streets, and burn rumps. [Pepys]
  • Today's well-intentioned activists have become the useful idiots of big business. With their adoption of "open borders" advocacy—and a fierce moral absolutism that regards any limit to migration as an unspeakable evil—any criticism of the exploitative system of mass migration is effectively dismissed as blasphemy. Even solidly leftist politicians, like Bernie Sanders in the United States and Jeremy Corbyn in the United Kingdom, are accused of "nativism" by critics if they recognize the legitimacy of borders or migration restriction at any point. This open borders radicalism ultimately benefits the elites within the most powerful countries in the world, further disempowers organized labor, robs the developing world of desperately needed professionals, and turns workers against workers. But the Left need not take my word for it. Just ask Karl Marx, whose position on immigration would get him banished from the modern Left. Although migration at today's speed and scale would have been unthinkable in Marx's time, he expressed a highly critical view of the effects of the migration that occurred in the nineteenth century. In a letter to two of his American fellow-travelers, Marx argued that the importation of low-paid Irish immigrants to England forced them into hostile competition with English workers. He saw it as part of a system of exploitation, which divided the working class and which represented an extension of the colonial system. [American Affairs]
  • McCrum is a great reporter, but even if you didn't know that, when a company is going around accusing reporters of conspiring with short sellers to bring it down, that is an almost infallible sign that it is going down. (Well, Tesla keeps going up.) Companies that are not doing fraud, when reporters ask if they have faked their revenue, respond by explaining where their revenue comes from. Companies that are doing fraud, when reporters ask if they have faked their revenue, call the police to try to get reporters arrested. The weird thing is that it worked so well for Wirecard for so long. The German financial regulator, BaFin, did file a criminal complaint against FT journalists and short sellers; it also banned short selling of Wirecard stock for two months, "to protect the company from speculators." The news about Wirecard, now, is sort of trivial; anyone who read McCrum's reporting and knew the almost-infallible rules of short-selling conspiracy theories already knew that Wirecard was faking its revenue. [Matt Levine]

Friday, June 19, 2020

Friday Night Links

  • DHS created DACA during the Obama administration without any statutory authorization and without going through the requisite rulemaking process. As a result, the program was unlawful from its inception. The majority does not even attempt to explain why a court has the authority to scrutinize an agency's policy reasons for rescinding an unlawful program under the arbitrary and capricious microscope. The decision to countermand an unlawful agency action is clearly reasonable. So long as the agency's determination of illegality is sound, our review should be at an end. [SCOTUS]
  • At the outset of the pandemic, public officials declared that the only way to prevent the spread of the virus was for everyone to stay home and away from each other. They ordered citizens to cease all public activities to the maximum possible extent—even the right to assemble to worship or to protest. But circumstances have changed. In recent weeks, officials have not only tolerated protests—they have encouraged them as necessary and important expressions of outrage over abuses of government power. For people of faith demoralized by coercive shutdown policies, that raises a question: If officials are now exempting protesters, how can they justify continuing to restrict worshippers? The answer is that they can't. Government does not have carte blanche, even in a pandemic, to pick and choose which First Amendment rights are "open" and which remain "closed." [5th Cir]
  • One of the very few persons who had the guts to openly criticize Wirecard was Dan McCrumm, who via FTAlphaville published some critical articles who were very well researched. If I am not mistaken, the earliest articles were published in 2015 before more substantial coverage came in in 2018 and 2019. In typical fashion, Wirecard reacted in suing McCrumm and managed taht even the German regulator BAFIN to go after McCrumm as a market "manipulator". Nothing came out of this other that an official short selling ban for a period of time. Interestingly again, no one from BAFIn or the Police actually bothered to look at Wirecard itself. Personally, the FT for me gained "hero status" to not back down despite the massive effort to discredit them. [Value and Opportunity]
  • There's a capital allocation problem in every company run by agents, but there's some reason to believe that the oil and gas industry is especially bad.  There are a total of 1,042 public companies in the Oil & Gas Exploration & Production industry (GICS:10102020). There are 429 with market capitalization between $5 million and $250 million. Of those, only 72 have positive retained earnings. Just under 17 percent.  Glenn Chan has figured out how oil and gas managements work. Read his posts: How would a sociopath fleece investors in oil and gas? and Why would anybody want to invest in independent oil and gas? [CBS]
  • I've written in the past about low carb, which I think is the way to go. But some people claim to have good weight loss results (though not necessarily good health results overall) with diets that aren't low carb, or are even high carb - such as eating only potatoes. If this works, even just for some people, a good explanation of the mechanism is that monotonous diets are also effective for weight loss. [CBS]
  • All societies have the ability to embrace mass delusions that simply aren't true - we have efficient market hypothesis and warmism among others that are too dangerous to mention - but China seems worst because of the absence of unfettered channels of communication. He does meet one man who admits to being a bit more perceptive, an English speaking teacher at his college. [CBS]
  • The "planned birth" (abortion/infanticide) policy is not the eugenic master plan that we have been led to believe. Rural Chinese, Mongolians, and other minorities are allowed to have 2+ children and the urban Han Chinese are limited to one. If you're not too proud to do business with people who execute babies, shouldn't you at least worry about how they'll steward your investments? The government continues to sabotage economic progress by failing to create a system of private land ownership. Anyone who predicts that China is going to become an economic rival to the west is showing their Marxist colors by believing that economic progress can be imposed from the top down without a system of price signals between private owners. The country is incredibly corrupt. From the horse's mouth: "You know how China is: toushui loushui - stolen taxes and leaked taxes." Something naive western investors don't realize about these corrupt countries is that you have two choices: you either comply with the laws and pay the taxes that your competitors don't, making you the highest cost producer, or you pay the bribes and cheat, in which case you are corrupt and can be blackmailed. [CBS]
  • Don't just take our word for it - do your own research. Call the LICOA executives listed below and ask whether they put minority shareholders' interests first when making decisions. The company told State of Alabama insurance examination staff that they hired Rosalie F. Renfrow Causey because her "presence insures continuity in further company management by the Daugette family." How does this serve the interests of shareholders who are not Daugette family members? Can we trust that when management decides who to hire or whether or not to sell the company they put shareholders' interests first, as they are legally required to do? [LICOA Shareholders]
  • This week shareholders in Scheid Vineyards received the annual report in their email inbox. They've had a few rough years, but this year was a wallop to the gut for shareholders. Initially I was going to break down their results in a Twitter thread, but decided a blog update was more appropriate. [Oddball Stocks]
  • By 120,000 miles (approx 8 years), pretty much everything on my 1998 discovery 1 that could break, broke. Switches, the metal in the wires corroded into green jelly, both head gaskets, backfiring, transfer case frozen, cruise control, cd changer, death wobble up the yin yang. Doors not opening / latching, AC broken.. By comparison my dad's 2007 FJ cruiser has 150k, and he just had to take it in for a slight vibration on the highway.... Other than that just brakes, oil and other consumables... [Kinja]
  • Stop giving money or time to any Woke-supporting group. Stop supporting Woke universities or businesses. Stop watching Netflix and the NFL. Just stop. Starve them to the greatest extent possible. And push to defund any such groups that receive public funds. Just as importantly, support any ally that has started his own platform or business to compete with such organizations. Donate to them. Spread the word about them. Write good reviews about them. Such support is easy to do and pays dividends. [American Thinker]