Tuesday Night Links

• Other information missing from the story that seems essential to charting Vanderbilt's rise: what he paid for various business assets and how he financed them, what he earned from them and what he paid in taxes, when he controlled an asset and when he was a minority partner, etc. Especially, we should like to know his leverage over time and how he was able to benefit from the various money panics that occurred repeatedly throughout his business career. One thing is for certain, he seemed to always be a buyer in such scenarios, never a seller, and he seemed comfortable being in control of his investments and making and enforcing operating policy, rather than being a mere financial speculator such as a partner like Daniel Drew might. [The TX Taipan]
• NRP generated $72 million of free cash flow in the first quarter of 2024 and $312 million of free cash flow over the last twelve months," said Craig Nunez, NRP's president and chief operating officer. "NRP has generated more free cash flow over the last two years than during any comparable period in the history of the Partnership. This performance has allowed us to make considerable progress toward our goal of eliminating all our financial obligations. The sum of debt and preferred equity outstanding is down to approximately $260 million, the Partnership is warrant free, and our financial position is solid and improving. [Natural Resource Partners L.P.]
• As readers of my older posts know, I always find the small European washing machines a bit hard to decipher, especially when written in Czech. A little Google translation led me to discover that the Gorenje machine doubles as a dryer. The wash cycle was two hours and the dry cycle was three in this very energy-conscious continent. [Curated Carlos]
  
• Berkshire itself is so large and diversified now that the businesses that dominate its operations hardly get a devotee of Buffett’s investment approach excited. The insurance operations, the energy assets, and the railroad - which get the lion’s share of the attention - do not the resemble the Gross Profit Royalties of old. [Larry Jamieson]
• With most manufacturing processes, even those using precision methods to produce interchangeable parts, there is a fair degree of tolerance in the process. If a part is a fraction of a millimeter too long or too short, it will still fit. If the impurity content of a metal is a tiny bit too high, the metal can still be used. If a process runs slightly too fast or too slow, the output is still usable. In semiconductor manufacturing, allowable tolerances are whittled away to almost nothing. Making transistors a few nanometers across requires processes that are hundreds of thousands of times more accurate than conventional manufacturing. The tiniest rogue particle can short out a connection and destroy an entire chip. A few atoms in the wrong place can cause a process step to fail. Imperceptibly small amounts of impurities can irreparably damage materials. [Construction Physics]
  
• While helium is the second most abundant element in the universe, it is relatively spare on earth: produced as a by-product of nuclear decay of heavy elements in the Earth’s crust, it accumulates in the same geological deposits as natural gas. However, only a few such natural gas deposits have sufficient amounts of helium to make it economically viable for separation, purification, and supply. [Silicon Semiconductor]
• With the introduction of Ivanhoe Electric’s Typhoon survey, hard-rock geologists can, for the first time, image mineral deposits several thousand meters below the surface. Unsurprisingly, 80% of all copper mine supply comes from deposits discovered within 200 meters of the surface – that is how deep the geologists could “see.” With Typhoon, that has changed. We know that copper porphyries exist at depths greater than 200 m, as several have been discovered by accident. However, the industry has never been able to explore for  these large ore bodies efficiently from the surface. [Goehring & Rozencwajg]
• To illustrate: our electronic medical records which doctors are forced to spend a significant amount of each day entering data into collect an absolutely massive amount of medical data. Yet—despite countless pleas to, we almost never mine that data to determine what constitutes the best medical practice (e.g., which drug produces a better outcome for a condition or which pharmaceuticals are more likely to harm than help a patient). This would be very easy to do, numerous people (including an acquaintance of mine) have tried to do this but got shut down (e.g., the government scrapped a system that in 2010, showed 2.6% of recipients of vaccines had an injury within 30 days of vaccination). I in turn, would argue that suggests the data in those records greatly threatens the pharmaceutical industry (which is why I was so supportive of RFK Jr’s VP nominee’s call to make that data available to everyone). [Midwestern Doctor]
• One of the things I do around the edge of the portfolio is mess with the energy weight. Some of this is old habits — most of my option trading career was being active in oil and gas. But I also see energy as fundamental to the concept of inflation and inflation is the largest tax on investment returns. I actually see the core of our portfolio not as means of getting rich — it’s just preserve purchasing power as best we can without incurring major drawdowns so we can sleep well at night. Because sleeping well = health. And so long as we are healthy, I’m confident our human abilities will provide prosperity. I’m trying to sterilize the impact of the random number generator and rely on idio — in life terms. These days I have a small overweight to oil. This is something I’m in and out on with horizons of about 1 year. It’s purely on vibes. I bought XLE in late 2020 after the oil crash and when Tina told me that you couldn’t even touch the Brent call skew in the early part of the Ukraine invasion I sold the position (and in a “old degen habits die hard” moment told her to buy wheat calls if the skew was still stale — iirc that was timestamped on a whatsapp screenshot on twitter). [Moontower]