Sunday Night Links

• RUDYARD KIPLING arrived in Brattleboro, Vt., hassled, broke and looking for a little peace and quiet. The Japanese bank in which he had kept all his money had collapsed in the early stages of the Panic of 1893. His wife, Carrie, was pregnant with their first child. And while a famous writer at that point, he had no novel with the publisher that could lift their fortunes. The banking crisis forced the British novelist and his Yankee wife to abandon their round-the-world honeymoon to return to Vermont and their only asset—10 hilly acres above Brattleboro, where Carrie’s family had a home. They stayed in a small cottage. Snow up to the windows, wind blowing in through the cracks, wife banging on the boiler, 26-year-old Kipling sat down to write. In the next four years, he produced “The Jungle Book,” “The Just So” stories and the first draft of “Kim.” [WSJ]
• Ownership is, for the most part, always buy and hold-- forever. To be an "owner", you must buy and hold. You can't be "looking for something more attractive to own"-- what you own should be valuable and attractive enough. Why do the things you own keep fluctuating in value so much you want to let them go? Buffett has gotten shit (from us and others) for his "buy and hold" mantra, when he clearly would've been better off selling some things now and then. The reason it's cringe for Buffett to tout buy and hold... is because he also is adamant that he doesn't influence or effect the operations of what he owns. This is pure negligence of one of the key responsibilities of ownership-- to have influence. To put yourself into what you own. Buffett has a policy of not doing that. So it's super cringe for him to buy and hold forever. [CBS] 
• Many now realize, with either terror or glee, that something big is underway in the Anglo-Saxon world, something revolutionary, with America at its epicenter. A new belief system, characterizing all of existence as divisible into a Manichean struggle for power between the oppressed and their oppressors, has emerged and turned itself into a mass movement that is scrambling every aspect of traditional American political, cultural, religious, and even corporate life. But this ideology seemed to emerge so suddenly, and is in its stark irrationality so alien to the modern liberal mind, that surprised observers and hapless opponents so far struggle even to settle on a name for it. “Cancel Culture,” “Identity Politics,” “Social Justice,” “Wokeness,” “Postmodernism,” “Reified Postmodernism,” “Neo-Marxism,” “Cultural Marxism,” just plain old Marxism in a new guise, the “Successor Ideology,” the cult of “The Elect,” or simply the “New Faith” – whatever its name, what’s clear by this point is that this all-consuming new belief system is exceptionally zealous, insatiably revolutionary, self-righteously brutal, and going ideologically viral with breathtaking speed and essentially no opposition. The result is that the New Faith, which rejects nearly every fundamental principle of liberal modernity – the existence of an objective and immutable reality that can be discovered by reason; the scientific method; an enduring human nature; the primacy of the sovereign individual over the collective; impartial equality before the law; secular pluralism and the value of freedom of speech; the separation of the private and political spheres – is enthusiastically taking an axe to the decaying pillars holding up liberal democratic civilization just as it enters a potentially existential struggle with a rising authoritarian challenger. [The Upheaval]
  
• At the end of January Altria announced a $2bn share repurchase programme, to be completed by the end of June 2022, equivalent to around 2.5% of the company’s market cap at the time of the announcement. With its investor event in February PMI said that, if the year is progressing as expected, it will start a three-year repurchase programme of $5-7bn in the second half of 2021 –equivalent to 3-4% of current market cap, or 1-1.3% on an annualised basis. BAT’s full-year figures in mid-February introduced a new gearing target of 2-3x net debt / EBITDA, to our minds an improvement on the previous goal of getting leverage down to 1-5-2.5x. The CFO said “we believe this is the right level of gearing for the group given our strong cash generation, and this will give us more flexibility in terms of capital allocation by the end of 2021”, which suggests there is a decent chance that repurchases start in 2022. [...] Over the next five years, assuming that net debt / EBITDA targets are met and maintained, we estimate that the four stocks we own could buy back around $42bn of their equity (14% of their combined market cap). Though they might be starting a little later, BAT and Imperial have the potential to repurchase the most stock over that period, perhaps around 20%: they benefit from their lower dividend payout ratios (54% for Imperial and 65% for BAT, compared to 92% for PMI and 78% for Altria) and their lower valuations (2021 calendarised P/Es of just 6.1x for Imperial and 8.3x for BAT, versus 11.1x for Altria and 14.7x for PMI). [Ash Park]
• Time and again in the Illinois study, across multiple risks and carriers, certain companies that have more sophisticated pricing models generated more specific price points than did their competitors with less sophisticated approaches. My premise is simple: greater underwriting sophistication is a significant advantage. Progressive, the epitome of pricing sophistication, is growing much faster than other insurers, and is doing so with a much lower combined ratio than most companies. (From 1994 to 2003, Progressive’s revenues grew at a 17% annual rate and its combined ratio averaged 93.7%.) It would be rash to say that there will never be another variable as powerful as credit scoring, but there’s nothing on the horizon that has a chance of having that kind of impact. [Insurance Observer]
• This offer is for the NFT associated with the Saturday Night Live sketch "What the hell's an NFT?"; it is not an offer to sell or license intellectual property rights in "What the hell's an NFT?" itself or in the associated Saturday Night Live sketch. We will, however, grant to the NFT’s owner a royalty-free license to use, copy, and display "What the hell's an NFT?" solely for the owner’s personal non-commercial use, and as needed to resell the NFT. [Opensea]
• It may be so, that some drug habitués become enthralled by a certain drug in an attempt to medicate painful emotional states; surely others hunger after a particular drug, pharmacologically to assuage some inborn metabolic deficiency, like hard use of nicotine by some schizophrenics. We have seen that absence of an enzyme involved in biosynthesis of morphine and metabolism of many drugs, a congenital defect which afflicts 5-10% of Caucasian North Americans, makes sufferers more sensitive to pain [vide supra, Note 85]. Like those heirs to many other conjectured congenital deficiencies in the endopioid system of endogenous analgesia, such individuals will likely prove to be more interested in ingesting opioids than less pain-sensitive peers. If there be individuals bearing constitutional overproduction of the anxiety-causing ligands of the benzodiazepine receptor [vide supra, Note 27], they could probably acquire a taste for the anxiolytic drugs like Valium,® and so on, for the various classes of inebriants we have examined. A 'reward deficiency syndrome' has even been hypothesized as correlate to drug habituations, some deficiency in the very dopaminic reward pathway! Perhaps the more drug-specific genetic polymorphisms ordain tastes for various types of inebriants, and only when combined with some defect in the reward pathway itself, might predispose to compulsive use of such compounds. [Jonathan Ott]
• Automakers like Ford are rightly frustrated by the public and market’s readiness to believe Tesla’s narrative about disrupting automotive manufacturing, but there’s reason to believe that the wildly different standards to which Tesla and other automakers are held actually hurts the would-be upstart. After all, one of the main reasons that KTP operates so efficiently and with such high quality is that it has no choice. Whereas Tesla has been able to count on investors and analysts to forgive its “production hell” fiascoes, KTP is the beating heart of Ford’s business, building some of the most high-margin and in-demand vehicles Ford has ever made. With the new Expedition and Navigator flying off lots, the vehicles made at KTP are absolutely critical to the financial performance that markets demand. Since every minute of downtime means that at least one margin-padding truck or SUV won’t be delivered on time, the people of KTP know that the company’s financial performance depends on their perfect execution and attention to detail. Were Ford able to raise capital from the markets whenever its financial performance fell short, it’s easy to imagine a plant like KTP cutting corners or making excuses about “production hell.” But because Ford isn’t coddled like the self-described “disruptors,” workers here at KTP know that downtime and poor quality simply aren’t an option. [Daily Kanban]
• Over the next five years, assuming that net debt / EBITDA targets are met and maintained, we estimate that the four stocks we own could buy back around $42bn of their equity (14% of their combined market cap). Though they might be starting a little later, BAT and Imperial have the potential to repurchase the most stock over that period, perhaps around 20%: they benefit from their lower dividend payout ratios (54% for Imperial and 65% for BAT, compared to 92% for PMI and 78% for Altria) and their lower valuations (2021 calendarised P/Es of just 6.1x for Imperial and 8.3x for BAT, versus 11.1x for Altria and 14.7x for PMI). [CBS]
• One of the left's key weapons is what the philosopher Jean-Marie Benoist called "logomachia", or language warfare. They invent all these words and use it to shape the ideaspace in their favor. It should be obvious to anyone who doesn't have brainworms--at this point it is even obvious to many normies--that in contemporary American discourse a word like "racism" has as much connection to phenomena in the real world as "Trotskyite" had in Russia under Stalin. So if someone says "You're a racist!" and you respond "I'm not a racist because X and Y and Z" you have already lost because you have implicitly conceded that there is this thing out there called "racism" which is really big and bad and scary, and one that your enemies get to define for you. And it doesn't matter that your X or Y or Z may be absolutely correct. You still lose by dignifying the accusation e.g. ("I am not part of the Trotskyite conspiracy!"). The entire thing is transparently preposterous and should be responded to appropriately, with laughter and derision. [Niccolo]