Thursday Morning Links

• Many of us still recall the story of Belshazzar’s feast, in which the foolish king’s crime was to take sacred vessels plundered from the Temple in Jerusalem, and use them to carouse merrily with his toadies. As they did so “they praised the gods of gold, and of silver, of brass, of iron, of wood, and of stone . . . which see not, nor hear, nor know: and the God in whose hand thy breath is, and whose are all thy ways, hast thou not glorified.” Then it was that there “came forth fingers of a man’s hand, and wrote over against the candlestick upon the plaister of the wall of the king’s palace: and the king saw the part of the hand that wrote.” The prophet Daniel, brought to interpret the writing, tells him, “God hath numbered thy kingdom, and finished it. Thou art weighed in the balances, and art found wanting.” I wonder if this portion of scripture is read often in Canterbury Cathedral nowadays. I suspect that any nation which neglects it will sooner or later face its own writing on the wall, as we do. [Peter Hitchens]
• So, given that, how does the market look today? The market today looks like it is priced correctly. The 10-year Treasury rate is 4% today, and the S&P 500 index P/E is 25.5x, almost exactly where it should be according to the model. Next year’s estimate P/E is 22x. In past bubbles, the rubber band was stretched. The table below is from an earlier post. Just before Black Monday, the rubber band was stretched as 10-year rates spiked to close to 10% while the earnings yield declined to 4.7%, creating a near 5% gap. On a price basis, the market was overvalued by 100%! During the internet bubble, the gap increased to 1.5% and the market was overpriced 40%. Today, there is no stretch in the rubber band. [The Brookyln Investor]
  
• Jamie Dimon was sitting on the 13th floor of his new headquarters on a Monday morning, sipping a Guinness and looking out at the Manhattan skyline. It was the first day that JPMorgan Chase’s massive skyscraper at 270 Park Avenue was opening to employees; the CEO had arrived with his architect to toast the building, a $3 billion monument to work. [WSJ] 
• Both Rayonier and PotlatchDeltic have also benefited from surging demand from solar-power generators for swaths of land, especially in the South. They each have options and lease agreements with solar developers covering tens of thousands of acres at rates that are upward of 10 times more profitable than growing pine trees. [WSJ]
• The U.S. retreat from its electric-vehicle ambitions is spreading around the globe. In Canada, Prime Minister Mark Carney paused an electric-vehicle sales mandate that was set to take effect next year. In the U.K., Prime Minister Keir Starmer has allowed for a more flexible timetable to hit the country’s EV targets. And the European Union last month bowed to pressure from automakers to rethink—a year earlier than planned—its 2035 target for eliminating carbon-dioxide emissions from cars. [WSJ] 
• General Motors said it is reducing its electric-vehicle manufacturing capacity and booking a $1.6 billion charge on its EV business as demand sinks. In a regulatory filing, the company said that EV sales are expected to fall with the end of government-funded subsidies and regulatory mandates that fueled EV growth. The automaker has dramatically scaled back EV plans after spending billions on the technology. In 2021, GM had said it was committing $35 billion on EVs and autonomous vehicles. Money went toward new models, EV battery development and converting traditional auto factories into EV plants. [WSJ]
• One thing I notice in reading the various things put out by Stahl is that he never talks much about valuations or at least how much he thinks the various investments held by HK and FRMO are worth. Granted TPL and GBTC are the main investments held by Stahl, so the smaller stuff is not hugely important to talk about, but even for TPL I don’t see much in the way of what Stahl thinks these businesses are intrinsically worth. Why is this? Am I just missing it? Like what is the calculation – however approximately – that Stahl is making? IDK why TPL is better than, say, a basket of other oil royalty companies with similar low-capex, commodity-price optionality that Stahl always mentions with talking about TPL (of which there are a good number that are cheaper on a conventional P/E and price-to-flowing-barrel basis). [Lemon Cakes Investing]
• I think this year we're really happy that we were able to cancel just over 2.5% of the shares outstanding. We've also found a few acquisitions that are kind of in the high teens IRRs. That's great as well. I think, again, on top of the dividend, we have still a significant wedge of incremental cash flow. Even though oil over the last three years has gone from $94 to $58 and gas is virtually at zero, we still have roughly $100 million of excess free cash flow a year. We just thought with the growth we've seen in the business and the strong free cash flow yield, it was a great opportunity to cancel shares. We're happy with the amount we've canceled this year. The debt repayment should continue through the back half of the year. [Prairiesky Royalty Ltd.]
• Testosterone has affected my life in ways both large and small. The best way I can describe it is that it uniformly lowered the activation energy required for pretty much every activity. When I get a message, I respond to it. When I need something from another room, I stand up and go get it. In fact, I have energy to burn; sometimes I find myself pacing in my office. I get 1-2 hours more peak productivity per day. [Cate Hall]
• Should people start taking lithium orotate, such as the low dose of 5 mg now, widely available as an unregulated supplement? The answer is no, even though we’d anticipate it would be safe, without worrisome side effects as seen with considerably higher doses of lithium carbonate used for BD. Yes, it’s tempting, with the body of evidence presented here that exceeds supplements in common use, but we need a clinical trial to prove that the new study translates to a human benefit. If lithium orotate does work, we don’t know the right or optimal dose. Even 10 mg would be a huge dropdown from the usual dose for lithium carbonate, which for BD in adults is between 600 to 1,800 mg/day. The amount of elemental lithium in lithium orotate is approximately 1/5th of lithium carbonate. [Eric Topol]