Monday, October 28, 2019

October 28th Links

  • We are at a cyclical extreme in what people are willing to pay for income generating assets, which explains the dearth of attractive "opcos" for capital allocators to buy. That is ultimately why the book value of Enterprise Diversified dropped to $10.7 million from $19.4 million a year ago. We continue to see Oddballs – whether land-heavy companies, small banks, or other kinds – that trade for prices below liquidation value if managements sold and yet above the present value, at a reasonable interest rate, of the distributions that shareholders will likely receive over time. Another problem we see is that investors have abdicated from supervision of their hired managements. Frankly, they are too cheap to engage in "activism" (as shareholder supervision is now known) because they had good results in the past without having to exert control over their investments. [Oddball Stocks]
  • About 15 months ago, I first started looking into the idea of manufacturing new DB-19 connectors. So here's the thing – how do you go about having something like this made? I had no clue, and it took me over a year. How do you find factories that might possibly build something like this, and then how do you find a contact person to whom you can explain your needs? Almost all the manufacturers that I talked to blew me off, or wouldn't even talk to me at all. The US-based manufacturers weren't interested, or couldn't do it. In the end, I went through Alibaba listings for companies that make other types of D-SUB connectors, and emailed several dozen of them to ask if they could make a DB-19. Only a few even replied, and only two said they could, both located in China. The estimated cost was eye-watering – a minimum order size of 10000 pieces and a total cost well into five figures. [link]
  • Indulge your nostalgia for the click-clack sounds of an original Apple II floppy drive. Noisy Disk adds mechanical stepping sounds to your Floppy Emu emulated 5.25 inch floppy disk. [link]
  • Last week, I spent a few hours walking around dry lake beds with a very powerful magnet on a pole looking for meteorites. Shockingly, I didn't find any. Problems included: seasonal lakes are wet too often, cracks hide small rocks, volcanic rocks look a lot like chondrites, and Andrew is impatient. But, there's a better way: using cameras and weather radar to track meteors, modeling their "dark flight" wind-dependent free-fall trajectories for the last ~20 km before impact, and then searching the predicted strewn fields. [Orbital Index]
  • The anti-male and anti-White rhetoric of the new left is extreme. The racial attacks on whites in particular approaches exterminationist propaganda seen only in, e.g., the Hutu against the Tutsi in 1990's Rwanda. [American Mind]
  • Your boat guzzles the same amount of gas when customers are paying $5000 a day to charter your boat as when they're paying $25,000 a day. On top of this, boats only last so long, and you eventually have to replace them. You would have to be crazy to get into a business like this. So, why would anyone buy a boat? Well, you don't have to use your own money. You can raise a couple hundred million from investors, buy a few tankers, and pay yourself $10 million a year. When your company goes bankrupt, rinse, wash, and repeat. [White Chip Stocks]
  • Economics is mostly political doggerel with a veneer of intellectual sophistication. You get the feeling that its practitioners have a certain political point of view and then produce research that supports that point of view — rather than first doing experiments and then reaching a conclusion based on those experiments. It is not a science because its predictive ability is either limited or nonexistent. [Phil G]
  • Investor presentations usually tell you a lot. Figure out how management would mislead and/or scam investors. Figure out what the presentations should look like if management is serious about making money for shareholders. You can usually get a good idea about management simply by looking at the investor presentations. [Glenn Chan]
  • Many institutional shareholders don’t perform due diligence. When oil & gas companies sell their assets to private buyers, they will open a data room so that the buyers can perform their due diligence. Institutional investors on the other hand request almost no data on the companies they own. They don’t ask for the b-factor and dmin values, decline curves, cash flow projections, etc. etc. [Glenn Chan]
  • Researchers have noted, "Insulin-mediated glucose disposal varies severalfold in apparently healthy individuals." Meaning: people vary widely in the amount of insulin required to keep their blood glucose at similar levels. (Example: In order to maintain a glucose level of 85 mg/dL, Tom requires 3 μIU of insulin, but Stacey requires 18 μIU units. With a HOMA-IR of 3.7 compared to Tom's HOMA-IR of 0.63, Stacey's body is working much harder—and she's at much greater risk for multiple conditions associated with insulin resistance and hyperinsulinemia.) [link]
  • Simultaneous invention makes biographies of inventors philosophically uninteresting. Who cares about the idiosyncrasies of somebody who discovered something at the same time as two other people? Note that the oldest of the three official Black-Scholes discoverers was Fischer who was born in 1938 and the youngest was Robert Merton who was born in 1944. Right place, right time; like Aubrey McClendon and Tom Ward who were born three days apart in Oklahoma. Similarly, J.S. Bach and G.F. Handel were both born in 1685. Fischer Black was part of the move to get endowments invested in equities. See this paper from 1952 when, within recent memory, there were only certain securities that were legal for fiduciaries to purchase. One of causes of the great 20th bull market - which cannot be repeated - was loosening these standards and creating more valuation-insensitive purchasers of stocks. [CBS]
  • I bought a P100D a year ago for a sticker of 144k, now the trade in is 70k ?? I have had a ton of cars over the years and this is by far the worst loss then any car I have ever owned. The main reason, I think, is Tesla lowered its price for the P100D to 109k. I feel this shows clearly that they care nothing for any of the customers who bought the Top of line model. No other car dealer would do this to the value of their top model car. Wow, I am still in shock, I understand a trade in value is usually 10k lower than a retail price. But even 60k in loss in 1 year, makes no sense, on any car. Somebody please shed some light on this situation... [TMC]

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