February 17th Links

• Making up for volume declines with price increases has been the tobacco playbook but I wonder if it will hold true in the future. By using this strategy at this point cigarettes have become a VERY expensive product. So personally I'm not sure how much water there is left in that well. Add in the social pressure/stigma around smoking in America and it's not a great picture for Altria. I'd say that the same applies to PM. While the volume declines for PM have been lower than the ones at MO, PM has continued with the price hike strategy at a regular pace. Their customers are more in developing countries and while the price of cigarettes is lower there the cost is arguably higher. A one pack a day habit will consume 20%-30% of a person's take home pay. That's A LOT! So that is why I'm starting to question the assumption that cigarette companies will just hike prices to cover any problem. [CoBF]
• The Company prepaid Dissenting Stockholders the full deal price, or $315.00 per share. Petitioners have obtained more than fair value, which I have found to be $303.44. The Company seeks a refund in the amount of the deducted synergies, or the difference between fair value and prepayment, plus interest on that amount. Petitioners and Respondent did not agree to a clawback provision in the event Respondent overpaid. Respondent cites no support for its request. Like others who have thought about this issue, including counsel's firm, I find the request for a refund has no present basis in Delaware's appraisal statute. [Chancery]
• I surveyed several meta-analyses of the antioxidant vitamins A, C, and E — demonstrating a lack of benefit from supplementation, and in some cases positive harm. At first, this result surprised me. How can one explain it? After all, we know that vitamin-rich fruits, vegetables and herbs are good for us. Extracts from these anti-oxidant-rich foods have been shown to neutralize reactive oxygen species (ROS) in the lab. Hence, it must be the case that fruits, vegetables and herbs are good for us because of their antioxidant content – right? Wrong. As we all know, correlation does not always imply causation. And it turns out that fruits, vegetables and nuts may improve our resistance to oxidative damage for reasons other than their antioxidant content. A more likely reason is that these foods are rich in polyphenolic phytochemicals–such as bioflavanoids– that stimulate the cells in our bodies to turn on a transcription factor called Nrf2, which activates our "xenobiotic" defense system. This xenobiotic defense system or Antioxdiant Response Element turns on the production of a number of endogenous anti-oxidant enzymes–such as superoxide dismutase and glutathione peroxidase–that inactivate ROS species catalytically. That means that unlike the antioxidant chemicals in foods–which quickly get used up one-for-one when neutralizating oxidant molecules–the anti-oxidant enzymes turn over thousands of times, and are thus far more potent and sustainable defenses. In addition, these enzymes are produced in cells throughout the body, localized where they are needed most. In short, empowering our in-born antioxidant defense system is much more effective than supplementing with chemical antioxidants. But what is even more startling is that supplementing with endogenous antioxidants can actually suppress your body's endogenous ARE defense system. Startling, but not too surprising once you realize that the ARE system is homeostatically regulated. [Getting Stronger]
• Ryan Homes argues that this action should be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction because Kane has an adequate remedy at law in the form of monetary damages based upon breach of contract, and she has not shown the Property is unmarketable. Kane seeks rescission of her purchase of the Property from Ryan Homes and cancellation of the deed transferring the Property, alleging she was induced to complete the purchase based upon Ryan Homes' intentional misrepresentations. The Court of Chancery is a "court of limited jurisdiction" and acquires subject matter jurisdiction in cases where there is a "request for an equitable remedy when there is no adequate remedy at law." If a plaintiff has a full, adequate and complete remedy at law, the Court of Chancery does not have subject matter jurisdiction. In determining whether equitable jurisdiction exists, the Court focuses on "the allegations of the complaint in light of what the plaintiff really seeks to gain by bringing his or her claim." "[T]he appropriate analysis requires a 'realistic assessment of the nature of the wrong alleged and the remedy available in order to determine whether a legal remedy is available and fully adequate.'"[Chancery]
• "Hey Harry, I went to cash yesterday in non taxable accounts which represent about 40-50% of our assets.... John O." Well John, I'm happy for your psyche, though I think you're needlessly panicking. I hope you're wrong. I'm not selling anything. I like my stocks. They're listed — for all to see — in the right hand column of this blog. [Technology Investor]
• "Professional politicians as a rule almost never do rallies. Why? They can't even come close to filling the space. Voters just don't care about politicians that much. Pols are not rock stars and they don't have the draw. It's not just Hillary being uncharismatic. Nearly all politicians are about as exciting as a pair of wet socks. Trump could do it because he's spent 30 years building himself up as a celebrity, but a Jeb Bush or a Mitt Romney or other men of that ilk will not get the crowds. That's why politicians always visit state fairs, etc. They have to go where the crowds are. The crowds don't come to them." [Sailer]
• My guess is the reason we can't prescribe bromantane is the same reason we can't prescribe melatonin and we can't prescribe fish oil without the charade of calling it LOVAZA™®©. The FDA won't approve a treatment unless some drug company has invested a billion dollars in doing a lot of studies about it. It doesn't count if some foreign scientists already did a bunch of studies. It doesn't count if millions of Russians have been using the drug for decades and are by and large still alive. You've got to have the entire thing analyzed by the FDA and then rejected at the last second without explanation. Absent an extremely strong patent on the drug there's no reason a drug company would want to go forward with all of this. I don't know what the legalities of buying Russian drug rights from Russian companies are, but I expect they're complicated and that pharmaceutical companies have made a reasoned decision not to bother. [SSC]
• Bloomberg's career, no less than Trump's, suggest that as president this would be less a temptation than a default approach. And the former mayor, unlike the former "Apprentice" star, is ferociously competent, with a worldview very much aligned with the great and good, from D.C. to Silicon Valley — which means that he would have much more room to behave abnormally without facing a Resistance movement of activists and journalists and judges. To choose Bloomberg as the alternative to Trump, then, is to bet that a chaotic, corrupt populist is a graver danger to what remains of the Republic than a grimly-competent plutocrat with a history of executive overreach and strong natural support in all our major power centers. [NY Times]
• Think of a task you're currently putting off, even though you shouldn't. Open Google Maps and find a particular coffee shop/library/etc. you've never been to. Go to that place strongly committing to only doing the particular thing you decided to do there and not get distracted either physically or mentally on other things. This means as little chatting with people as possible; no checking email (unless it's absolutely needed); no checking social media; not doing anything at all that is not directly related to the task at hand. Basically, maintaining the rule structure similar to the one I described in the beginning of the post. Notice how easy or difficult the task was to work on and how easy or difficult it was to not let yourself be distracted, compared to your usual environment. [Guzey]