Wednesday, September 13, 2023

Wednesday Afternoon Links

  • At a societal level, we can be rich, or we can be communitarian. I don’t think we can be both – at least, not for long. The Baby Boomers came closest to enjoying both simultaneously, but only because they were born during an ideological changing of the guard. They enjoyed the high trust, family-centric culture cultivated by their parents and grandparents, and then got to enjoy the youthful rejection of all of that culture’s downsides. But that’s a trick that can only be pulled once. [Maiden Mother Matriarch]
  • I want to pause here and talk about this notion of consensus, and the rise of what has been called consensus science. I regard consensus science as an extremely pernicious development that ought to be stopped cold in its tracks. Historically, the claim of consensus has been the first refuge of scoundrels; it is a way to avoid debate by claiming that the matter is already settled. Whenever you hear the consensus of scientists agrees on something or other, reach for your wallet, because you’re being had. Let’s be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world. In science consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus. There is no such thing as consensus science. If it’s consensus, it isn’t science. If it’s science, it isn’t consensus. Period. [Michael Crichton]
  • The Coca-Cola Company sought ways to increase the five cent price, even approaching the U.S. Treasury Department in 1953 to ask that they mint a 7.5 cent coin. The Treasury was unsympathetic. In another attempt, The Coca-Cola Company briefly implemented a strategy where one in every nine vending machine bottles was empty. The empty bottle was called an "official blank". This meant that, while most nickels inserted in a vending machine would yield cold drinks, one in nine patrons would have to insert two nickels in order to get a bottle. This effectively raised the price to 5.625 cents. Coca-Cola never implemented this strategy on a national scale. [Fixed Price of Coca-Cola from 1886 to 1959]
  • This year Robertson folded about 1 billion tons of his reserves into a partnership with Arch Coal, the nation’s number two producer behind  Peabody Energy. Natural Resource Partners  raised about $90 million in October selling a 19% stake to the public in the form of units with a 10.5% dividend yield. Robertson kept 58% of the partnership for himself and is the majority general partner. Natural Resource Partners plans to take advantage of the same financial alchemy as energy partnerships such as Kinder Morgan Energy Partners. Coal miners like Arch and Peabody Energy tend to trade at four to five times cash flow. Natural Resource Partners, even with a hefty 10.5% yield, is trading at the equivalent of nine times cash flow. So it can buy royalty streams from coal mining companies (most collect royalties from reserves as well as mining their own coal) at five to seven times cash flow and still boost returns to its own unit holders. [Forbes]
  • Corbin J. Robertson, Jr. has served as chief executive officer and chairman of the board of directors of GP Natural Resource Partners LLC since 2002. Mr. Robertson has vast business experience having founded and served as a director and as an officer of multiple companies, both private and public, and has served on the boards of numerous non-profit organizations. He has served as the chief executive officer and chairman of the board of the general partner of Great Northern Properties Limited Partnership since 1992 and Quintana Minerals Corporation since 1978, as chairman of the board of directors of New Gauley Coal Corporation since 1986, and the general partner of Western Pocahontas Properties Limited Partnership since 1986. In addition, Mr. Robertson served as chief executive officer of the general partner of Western Pocahontas Properties Limited Partnership from 1986 until 2008. [Natural Resource Partners, L.P.]
  • Natural Resource Partners was formed in April 2002 with selected properties from the following companies: Western Pocahontas Properties - formed in 1986 to acquire all the coal, timber and surface rights of CSX Corporation. These assets constituted approximately 45% of Natural Resource Partner's (NRP) reserves at December 31, 2001. Arch Coal - the second largest coal producer in the United States. The properties contributed to NRP by Arch accounted for approximately 40% of NRP's reserves at December 31, 2001. Great Northern Properties L.P. - formed in 1992 to acquire the coal-related assets of Burlington Railroad. New Gauley Coal - as part of Western Pocahontas Properties' acquisition of the CSX properties, WPPLP acquired New Gauley Coal Corporation, which held additional properties in West Virginia. Cline Group - in February 2012, Natural Resource Partners completed the fifth acquisition of coal reserves at the Deer Run Mine near Hillsboro, Illinois from Colt LLC, an affiliate of the Cline Group. [NRP]
  • An ecclesiastical mystery: The Lutheran Church Missouri Synod (LCMS) has 1,807,408 members, while the Presbyterian Church in America (PCA) has 390,319. Yet the LCMS seems almost invisible from public life and the PCA is relatively prominent. Can anyone suggest why this might be? [Jeffrey H Walton]

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