August 6th Links

• It has happened only one other time in my investing career – in 1999. I remember when, in a period of about six months, the ceiling on seed financings vanished. It wasn’t the uncapped note phenomenon (which seems to have come and gone for the most part), but instead, it was seed rounds of $5m – $10m at $40m pre-money. [Feld]
• They were fed up with Seattle's home bidding wars. They were only in their late 20s but had already lost two battles and were ready to renew with their landlord. Then, in May, their agent called. Suddenly, Redfin's Shoshana Godwin told the couple, sellers were getting jumpy, even here in the hottest of markets. Homes that should have vanished in days were sitting on the market for weeks. There was a three-bedroom fixer-upper just north of the city going for $550,000, down from more than $600,000. [Bloomberg]
• I'm going to take a stab at his question and offer a Nifty Fifty 2.0 below. The original Nifty Fifty was an informal, unscientific list, and so is mine. For instance, Apple doesn't trade at exorbitant valuation multiples, but it's undeniably a market leader and glamour stock, so I'm including it. Notwithstanding that, each company on my list has a market cap is $10 billion or more, along with some or all of the following characteristics: it's popular among hedge funds, it's been described as a quality business, compounder, or disruptor, its leader has been described as an outsider CEO or a great capital allocator, it has a price-earnings ratio above 25, it has an up-and-to-the-right stock chart, much of the stock's performance since 2009 has come from multiple expansion. [Young Money]
• eToys had an initial public offering in 1999. The stock was listed at $20 but by the end of the day, the stock price had climbed to $77. Valuation peaked in late October 1999, giving it a market cap close to $9 billion - over two and a half times Toys "R" Us - making it the 64th largest company on the NASDAQ exchange. Think about how astonishing that is: eToys had revenues of $30 million versus sales at Toys "R" Us of $11 billion, yet eToys had the higher overall valuation and would have qualified for the NASDAQ 100. [link]
• When I start a book, I almost always go straight to Wikipedia (or Amazon or a friend) and ruin the ending. Who cares? Your aim as a reader is to understand WHY something happened, the what is secondary. You ought to ruin the ending–or find out the basic assertions of the book–because it frees you up to focus on your two most important tasks: 1) What does it mean? 2) Do you agree with it? The first 50 pages of the book shouldn't be a discovery process for you; you shouldn't be wasting your time figuring out what the author is trying to say with the book. Instead, your energy needs to be spent on figuring out if he's right and how you can benefit from it. [link]
• There was a time when rocket engineers and launch vehicle/spacecraft designers felts reasonably comfortable proposing the use of propellants that today would be considered *insane.* One of these was fluorine, an oxidizer so powerful that it will oxidize *oxygen.* Liquified it is denser than LOX and provides a higher specific impulse than LOX when burned with the same fuels. On paper, liquid fluorine is spectacular. In reality, fluorine is toxic and just about all of the combustion compounds are toxic (burn it with hydrogen and you get hydrofluoric acid, which will eat your bones). Fluorine has the added bonus that it will merrily combust with a whole lot of structural materials, so you have to be careful in your design and preparation for tanks, pumps, lines, etc. [link]
• Moscow was not important to Stalin. He was quite prepared, and had indeed planned, to retreat with as much industry as possible behind the Urals, and continue the fight from there – so long as he was able to receive petroleum supplies from the Caucasus across the Caspian. The Germans knew about Moscow's unimportance to the Soviets (Leningrad was far more symbolic, having been the birthplace of the Revolution). The German military attaché in Moscow had told the German high command as much, but they ignored him. [link]
• Creative Destruction of old companies means you don't have to pay for the health care insurance of older workers. Maybe Facebook isn't quite the never-ending goldmine everybody thought it was 48 hours ago, but at least Facebook employees don't cost Zuck much in insurance premiums. [Sailer]
• Amazon only exists by constantly mainlining NIRP money, parasitizing the US Postal Service, undercutting US manufacturing and retail with cheap Chinese imports, and working its $12.00/hr employees so hard that they have to carry around empty water bottles to piss in because they can't stop to take a bathroom break. In a world of sound money, prudent fiscal policy, and sane labor markets, Amazon couldn’t exist. It is a monster of the Everything Bubble, a mutant chimera of all the social pathologies regularly discussed here. [Sailer]