rukawa

That assumes you can get paid for what motivates you. I would say 90% of people can't. Watching TV and porn motivate me. Anyways there are tonnes of things people do everyday for various reasons that don't motivate them. Do you brush your teeth? Do you shovel your driveway? Do you mow your lawn? Why should investing be any different than any other chore. I also strongly suspect that many brilliant investors were never that motivated by the actual nitty, gritty of investing and that they just did it for money. Benjamin Graham, for instance, appears to have stopped personally investing as soon as he retired. And he only went into it in the first place because he needed money. You can do well with an index fund but you can do much better with a little effort. Net-nets aren't a very difficult strategy but the return is about double an index fund. The difference over the long term is massive. Don't disagree. I don't really advocate reading most of the stuff in the K's and Q's. Maybe what I wrote was misleading. I wasn't advocating reading tonnes..quite the opposite. That was exactly why I failed when I first started investing. Instead I am saying that you should have a relatively simple strategy but be consistent and develop a habit.

When I first started trying to invest, I tried to come up with a long complicated list of things I should be doing. It involved reading a lot of newspapers, blogs, doing extensive analysis, etc. Naturally this failed miserably. And of course I spent a lot of time feeling guilty, telling myself I should do more and beating myself up. I suspect there are a large number of lurkers having the same problem. I have finally succeeded in developing a habit. Here is the strategy I used: 1) I set a minimum goal of 15 minutes a day. This is a perfect time because its just long enough that you end up getting involved mentally but its short enough that you never have an excuse to break the habit. I almost always go beyond the 15 min. 2) I bet my friend $100 that if I ever broke the habit I would have to pay him. I had to pay out once for New Years. 3) I used the Seinfeld Calendar trick where you put an X for everyday you successfully do the habit. The objective being to not break the chain. I tracked my progress using this: http://chaincalendar.com/ 4) I started with a very simple, easy strategy: net-nets supplemented with some blog/forum investment cases written up by others. And I made very small bets, typically in the order of 1% or less, so that decision-making was quick I guess the thing I learned is that you have to make it easy to succeed. Don't be ambitious. Be consistent. The more difficult you make your habit, the more you are setting yourself up for failure. Incidentally with exercise I initially made the same mistake of doing too much and failing miserably. The thing that worked was having a very small exercise routine (4 exercises x 2 sets), done twice a week, with a friend that could be completed in <30 min.

I made the argument about profit margins a while ago. But I thought about it a while and read Philosophical economics and I came to realize that its not profit margins that are mean reverting. Its Return on Equity. Or more generally return on assets...since return on equity has a strong dependence on debt. I'll give an example to illustrate what I mean. Take Microsoft...its profit margins are humongous. And they aren't going down. They have not mean reverted for decades. However due to the high profit margin, Microsoft accumulates tremendous amounts of cash. But they have no real place in which to invest that cash. And so their return on equity tends to go down over time. Apple is in the same situation. In general returns on equity will tend to mean revert. Of course its possible companies just return the cash to shareholders and the cash get used to bid up asset prices. But I don't think that process can occur forever.

Andrew Gelmans blog provides some nice coverage of the problems in science from a statistical perspective http://andrewgelman.com/2012/03/31/dispute-about-ethics-of-data-sharing/ And this comment on the blog from a scientist illustrates the sort of forces which lead to an attitude I hate

There isn't a single case I can think of, of anyones research direction being specified as a condition of funding. It wouldn't have been possible because no bureaucracy even existed to monitor them. I believe that there is an important place for long term funding of research in our society. I just think our current model of doing in is inefficient, corrupt and stupid. There is also a historical element to this. The corruption of the system has taken a while to set in. For instance, when the internet was developed, what you had was a very small number of researchers with ample time and money and very little competition. That isn't the case today. Instead of funding professors and creating a hierarchy, I favor funding smart researchers and letting them do whatever they want for a period of time. I would also fund a very sophisticated infrastructure which would include extensive programming libraries, technicians, engineers. Think Bell Labs but more of them. Researchers would able to take advantage of this infrastructure which would itself be extensively documented, improved and the costs cut over time. And finally I would cut the number of researchers probably by 3/4ths. Instead of taking a lot of mediocre people who go to grad school because they don't know what they want to do with their lives, I would take a much smaller number of people who already have some interesting ideas they want to pursue. And I would abolish peer review and just let people post directly to something like a preprint server and have allow any researcher to directly comment on research articles. Think CoBF except for research articles. No I certainly don't believe in any multiplier effect. I think the opposite, that a lot of mediocre grad student crowd the research literature without a tremendous amount of garbage. I think it is possible, but extremely difficult to train people to do good research. And most of the best don't need to be trained...they just think long and hard about a problem over a very long period of time. But in the current system I would say the training is poor to non-existent. As I stated previously I think grad school researcher training is completely non-existent. And I think the best don't need to be trained. But what about the non-geniuses...do they need to be trained? Sure I agree they do. But as I said the current system doesn't do that. Could you create a system that could systematically train researchers? Yes but it wouldn't be easy. And in the current system with the current forces at play, I would argue that its close to impossible. The reason is that to train a researcher you need two qualities: a kind of unselfish nurturing quality that you get in a good teacher, very good teaching ability and simultaneously you want a person who is a brilliant researcher. Generally brilliant scientists are egotistical assholes and horrible teachers. But sometimes you get really brilliant guys who are simultaneously nice as well and excellent teachers. Its rare but possible. And in that case you have someone who can train a researcher. But that is very very very rare. Newton couldn't do it because he was an asshole. Maxwell couldn't because he was a poor teacher. But when it does happen you get a special kind of magic...what Munger would call a lollapolloza effect. Examples of this are Ernest Rutherford and Emmy Noether. Anyways the current system is about as far from that as it is possible for me to imagine. I didn't have a horrible experience. Mine was mediocre. I saw others which were much worse. But generally I have a poor opinion of some aspects of this society. There is this pervasive selfishness and individualism that is corrosive and it effects a lot of things. I don't just see it in academia...I think corporations are much worse. Maybe you could summarize everything I have said with one line: There are too many selfish assholes

Ok. So how do you fund the following types of situations? Internet The development of the internet occurred over about a 30-40 year long period during which a number of prototype networks were tested by academics in universities. The reason the internet works so well is that it is well-engineered and the reason its well-engineered is that academics played with various networks for 30-40 years when they were commercially non-viable and figured out through trial and error how to make good ones. How do you fund a 30-40 year research effort with zero payoff, zero users through business incubators. VC's will laugh at you. Electricity and Magnetism The understanding of electricity and magnetism occurred as a result of research by scientists, amateurs, and others over a >150 year period during which there were basically zero practical applications. Electrification only really start with Edison. Faraday's research was funded by government. Heaviside was funded by his parents. Ampere by a university. But all of what we take for granted today (think everything that runs off electricity) required that painstaking research. Standard Model Now the standard model is an interesting one because it still has no practical applications but I am sure it will in the future. It required enormous sums of money to figure out because of the need to built particle accelerators. To me the standard model is probably the pinnacle achievement of modern science and there is no way it would have been possible through a business incubator. The whole VC/business incubator model is reliant on high quality research by scientists with zero payoff conducted over long periods of time. All that happens is that VC's exhaust all the easy ideas and then all you are left with is the ideas that require long periods of research.

We as posters on an investing forum can't probably do a lot. But we as a society can pretty easily fix this problem. The whole problem originates from professors competing for grant money. But I don't really understand why they need it or why they need to have power over armies of graduate students. Newton didn't have a graduate student army, Shannon didn't, Einstein didn't, Darwin didn't, Maxwell didn't. If we managed to have science before without the grant system, without peer review, grad students slaves why do we need it today? Instead of funding professors...directly fund young researchers and let them work on their own ideas. And instead of using graduate student armies to do things they have no business doing...why not get professionals to do it instead. Professional programmers, professional technicians, lab techs etc. The whole system is utterly without logic and reason. Its inefficient, corrupt and stupidly run. Graduate students are amateurs and so they are never really that good at whatever technical task they are assigned to. And every 4-5 years they leave, often without leaving any real documentation of their methods and you a new group has to somehow relearn everything. Graduate students aren't trained in lab methods, programming. I would guess that 50% of the poor quality of science is just do to graduate students not really knowing what the fuck they are doing. And finally we should get rid of the whole Phd and postdoc system which is really just a slave system to serve a bunch of corrupt lazy old professors who should do their own fucking work.

The reproducibility project isn't sample bias. They attempted to reproduce 100 studies and could only reproduce 36%. The example of Newton vs Leibniz was not fraud. It was a priority dispute. Newton didn't outright lie. Neither did Leibniz. In fact I can't think of a single case of scientific fraud before WW2, or scientific plagarism. Sure there are. I am not really disputing that. There will always be brilliant researchers who do remarkable work. But balanced with the that are a lot of very corrupt people in positions of power doing a lot of damage. Anyways lets take one good example of a brilliant man doing remarkable work and what happened to him which I think is pretty instructive: https://en.wikipedia.org/wiki/Grigori_Perelman

http://www.nonamestocks.com/

Its not just science!! The rot is everywhere. Basically it comes down to this. You create this metric. Then you reward people with money and whatever if they maximize the metric. So people game the metric. David Simon called it juking the stats. The money and the metric corrupt the system. With science, its grants based on citations and papers published. With criminal justice system, its promotions based on number of convictions for DAs or for cops its promotions based on arrests. In education, its rewarding teachers based on test scores. With doctors, its getting money based on number of operations performed or procedures done. With finance, its traders getting rewarded based on profits...and so they take huge risks and blow up banks. See the thing is...to get the rewards you don't have to produce something of value. That is what people figured out. You just need to learn how to game the system. Science is no different than any other field. Power and money corrupt. Introducing so much money to science has corrupted it. All of this takes time to happen. In the beginning most people are not corrupt and the system is good. It make even be better than before since the metric and rewards push people to work harder. But slowly a few people learn how to game the system and their power increases. As time goes on the worst rise up. And so you have a mix of people but as you go higher people get more and more corrupt. The ironic thing about this is that most people don't want to be bad. But they eventually become bad because they feel like fools for being honest.

I read it. Part of the problem here is I don't have a time machine. Now I am a loser in life in many ways and so I have this tendency to believe the world is a worse place now than it was before. I am almost certainly wrong though because I don't have any experience of the past. That said my feeling is that in science things are worse today than they used to be. Actually I would make it even broader...throughout all institutions things are worse. People are more dishonest, more selfish, bigger assholes. And the money corrupts everything. The personal morality is gone. I mean there is this different group morality that is better like on race and gender. But on the very basic things like how you treat others, whether you are honest...something has gone wrong. Science started out different. It was an amateur endevour. There was little incentive to be dishonest. There just weren't big rewards in science. Benjamin Franklin didn't play around with kites to win a research grant...he did it because he thought it was fun and really cool. Americans were very lucky. You had WW2 and the influx of European scientists from societies that were at the height of their cultural and intellectual sophistication. These guys didn't just know science...they knew history, philosophy, literature. The had a fully grounding in the Western classical tradition. And though Christianity was dying...there was a Christian morality at the personal level that was still there. You lucked out in getting all the best Europe had to offer. And then on top of that you heavily funded science. And even better you had this influx of poor, striving immigrants from Eastern Europe (I am thinking of Russian Jews) from which you get your Feynman's, Glashow's, in the second generation. So immediately post WW2 you have the perfect mix and you get some amazing science. But its almost like the very thing that enable you to produce so much (massive research grants) is also the thing that corrupted the foundations the success was built on (scientific morality, intrinsic interest, wide intellectual education, strong philosophical background). And so we go from guys like Schrodinger, Godel, Einstein, Heisenberg, Fermi who could discuss Emmanuel Kant in one sentence and Green's functions in the next. To Feynman, who though he had no philosophical understanding, did at least understand physics and mathematics thoroughly...not just the math but also the history of physics. And finally you get to the present day where a researcher is very narrowly educated, highly technical and not only doesn't know anything outside his narrow sub-specialty but often doesn't even know the history of his own discipline. But worse he is a careerist. He doesn't learn how to do good science. He learns how to play the game. How to suck up the right people. Develop the right network. Play dirty. And follow the prevailing fads. The culmination of all this is the corrupt asshole university professor. He has an army of graduate students. He has thousands of publications. He has an extensive social network of people he has collaborated with and they all help each other: they only cite each others papers...never anyone outside their network, they try to prevent any paper from competing groups from getting through peer review (because of course they have friends on the editorial boards of major journals), in peer review they often push authors to cite people from their network even though the citations aren't relevant, they follow the latest fad, they overhype their research and so it goes. Its all a big game. And often the worst rise to the top. This isn't just true in science though. In the criminal justice system the game is the same. Prosecutors don't care about justice, they care about how many convictions they get. Here is an example of the type of thing I am talking about. My friend submitted a paper to a conference proceeding. When they got to the conference, the same paper with different wording but exactly the same values, same idea was presented before them. Someone had given their paper to a competing group which had plagiarized the results. Complete plagarism. My friend wasn't able to present. The supervisor of my friend then spent about two years workings slowly through back-channels to get this asshole bigshot professor to stop plagiarizing my friend's work. Now you may ask: Why the hell didn't he just accuse the big shot professor of plagarism. The reason is that he professor was very powerful. He had friends on grant committees, conference heads, editorial boards etc. So the professor was afraid of blow back and he had to proceed very slowly and carefully. For a long time they couldn't get published in major journals because the big shot had friends at the journals. We had to publish in other journals.

The main article that has driven all of this is this one: http://journals.plos.org/plosmedicine/article/file?id=10.1371/journal.pmed.0020124&type=printable And of course there is the Reproducibility Project where they were unable to reproduce something like 64% of research findings in psychology https://en.wikipedia.org/wiki/Reproducibility_Project My cousin is a neurologist. He was a researcher at one point. The professor he was under was publishing a lot of bogus results because a biological test was being done incorrectly. This was because the professor was not an expert in the test and had basically told a bunch of grad students to develop the test on their own by reading research papers. My cousin showed the test results to experts on this test. They immediately knew that the results were garbage. The professor was extremely angry. My cousin had to leave the group and the professor continues to publish garbage. These stories are not unusual...everytime I talk to anyone in academia I hear variations on this theme. Its also not unusual outside academia...I worked at OTPP and they had tonnes of bullshit financial models. My view is that whenever money is involved and someones empire is at stake, people will take shit sandwiches and sell them as filet mignon. Anyways I like this site: https://forbetterscience.com/ And for climate science this one is excellent: https://scienceofdoom.com/ The truly sad thing about all of this is the most probable outcome when a lot of the scientific rot is exposed is not better science but instead empowerment of people who are even worse like the anti-vaxxers, chinese medicine people etc. As much as I am skeptical about a lot of science, I am a billion times more skeptical about astrology, Chinese medicine, naturopathy, and the links between autism and vaccines etc. This thread is a good example of the screwed up dynamic.

I was reading this article in Wired today: https://www.wired.com/2017/02/travis-kalanick-is-totally-sorry/ You can read the comments and you will see that people hate the direction wired has moved in and they blame it on 'SWJs'. But interestingly you see similar complaints at Salon which is a very left-wing magazine that has always indulged in social and political commentary. What is really happening is that both magazine are increasingly publishing superficial click bait. Purely to bring in traffic. The articles are absolute trash but they work in bringing in views. Again we see here the drive to get advertising dollars driving down the quality of the product. The internet maybe even worse in this respect than television. Advertising on television tended to make television series increasingly conservative and boring. The internet advertising is making things increasingly superficial and meaningless. Its using sex, gossip, tribalism to grab our attention.

The quality of scripted TV has probably never been better than at the present moment. On the other hand movies are worse than they have ever been. At least that is my feeling. I was watching this video by Kevin Spacey. He speaks about a time where he asked Jack Lemon about the golden age of television in the 1950's. He explains that it was a time when you could do anything you wanted on television because it was a new medium and people didn't even know whether it would last. So there was a lot of creative freedom. https://www.theguardian.com/media/2013/aug/22/kevin-spacey-tv-golden-age Later this freedom went a way as television became more commercial because of advertising. Network executives began to control things more and more. And as they did the quality of television declined. In my view the rise of big brands like Coke is primarily due to the massive reach of television and the limited broadcast slots available to advertisers. This dynamic favored a few big brands as they could afford to spend money to advertise on television and the television huge advertising effectiveness further cemented their dominance. Finally in the present era we see the rise of streaming services and cable channels like HBO. Here there are no advertisers and television caters directly to viewers and so the quality has massively improved. Hence the new golden age of television. And finally during this age we have the rise of a new medium...Youtube. My nephews don't even watch television. They just watch youtube. This medium is completely different than anything that existed before. Its effect on advertising, branding and all the rest is difficult to predict. I am not sure what to make of all these changes or how to think about it. Any ideas?

How do you know this...based on personal experience?

Me and my friend talked one day for a long time about Guru's and games and why people believe in Gurus. A lot of these ideas came from EST. Basically everything in life is a series of games with associated rewards. A guru is someone who gets other people to play his games. The question is why would anyone ever believe in the game and play by its rules? The answer is that once a game is setup it establishes a hierarchy with a set of rewards. And if you play the game you can ascend to the top of the hierarchy and get rewards. So it makes sense to believe in the game and the associated rewards and play by the rules because you can directly benefit from this as long as enough people are playing. But interestingly, the games themselves are powerful. Because they organize humans together as a group. And organized, directed groups will tend to beat disorganized groups without direction. Humans may therefore by predisposed to believe in irrational games like religion because those humans that didn't were exterminated by those that did. The organized conquered and slaughtered the disorganized. This implies that humans will tend to believe in a lot of stupid things as long as it allows them to be part of an organized system they can fit into and a set of rewards that will benefit them. Of course games that have provide greater benefits because they add greater value will tend to beat other games in the long run. This explains why capitalism and science are slowly crushing religion. Capitalism and science of course being the new games we play.

The main reason I made the argument about Obama is the incredible difference between the financial results of RGR in 2000-2007 period vs 2008-2016. Sales declined 20% from 2000 to 2007. Net earnings actually declined in half. RGR actually suspended their dividend in 2006. In 2005/6 RGR earnings were close to zero. Then from 2008-2016 sales nearly quadrupled and net earnings grew by a factor of 10. Profit margins improved from 5% to over 10%. You are really dealing with two totally different companies depending on the political party in power. The political factor is not small at all...its massive. That is assuming I can ascribe all of RGR performance to political factors..its possible there was a turnaround during that time period. BTW, I am curious about your perspective on Smith&Wesson.

But that shouldn't really effect profit margins. The only way profit margin do get effected is if guns are seen as commodity goods like usb cables or if there are new entrants into the industry. Lower labour costs would probably actually help gun makers since it would increase the number of gun users. My fear is the market for used guns. I feel like the number of guns that got bought during the Obama administration was way too many because gun owners were afraid. Now with Trump I can see these guys selling their guns regretting the purchases of guns they never use. They will sell them onto the used market which should really hurt the market for new guns. I would want to be these guys: http://www.armslist.com/

After looking at the history I'm inclined to agree with your original assessment but I am not sure about competition. I feel like a gun is something most people would trust to a brand name because of the safety issues. For the technology are you talking about 3-d printed guns or making guns with milling machines? Anybody have insight on Smith&Wesson. I always thought of that as a strong brand but looking at the historical financial results it appears to be really poorly managed. Plus the name change indicates that the brand is dead. Looking on the internet it appears that Smith & Wesson got killed because they went along with the Clinton administration on gun control and the NRA at one point initiated a boycott. I'm guessing this destroyed their brand: http://www.businessinsider.com/smith-and-wesson-almost-went-out-of-business-trying-to-do-the-right-thing-2013-1 This business is hugely driven by politics.

Looking at Value Line it appears that RGR did pretty badly from about 2002-2008. AOBC has an even longer bad period from about 2001-2010. RGR seems to be the better company. Its a real question as to how much of the growth from 2008-2016 is due to Obama scaring gun-owners and how much is due to gun companies reaching out to new demographics. Ruger's results seems to coincide pretty much with the Bush and Obama administrations. I would say to understand the valuation you have to estimate how much gun sales are driven by political fears. http://www.forbes.com/sites/frankminiter/2016/04/12/the-gun-industry-says-it-has-grown-158-since-obama-took-office/#6b76d12a56ae

Why is it reasonable? It looks like a high quality business. I would have expected the multiple to be around at least 18. The current value only makes sense if there is negative growth. It definitely looks cheap. As does AOBC. There is a strong expectation that sales where high due to uncertainty about the election and should trend lower going forward.

So is that it for the litigation? Because my vague impression looking at their financial statements was that legal costs had substantially increased non-interest expenses. So if this is it for litigation I would expect those costs to decline.

I find it strange that people are still debating US gun control when a simpler, fully constitutional, more enforceable and vastly superior policy is to just tax bullets. Lets say $100 a bullet. Apply it to everyone except the military but including the police. There are 300 million guns in the US. I believe I read somewhere the US bullet supply would last 3-4 years and I suspect the majority of that is held by gun enthusiasts who generally are responsible gun owners. They would almost certainly stock up in huge quantities at the hint of a tax. On there other hand the people who are using guns to commit crimes are too poor to afford the tax. They also probably will not be the ones who will get most of the bullets in the hoarding prior to the tax both because bullets will be less affordable and because gun enthusiasts are better connected and more interested.

Maybe I need to relabel the thread...something like Trump is going to make America Great Again. Then I would get a few hundred replies.

1) I don't really get this. We already have a site. Namely this one. This site is already sustainable. I am not talking about creating anything new. Nobody would pay anything. Now if this becomes really popular maybe we would need a separate site but right now we are very far from that. 2) I have thought it through a little. THe biggest problem is getting interest from people. But basically the way it would work is that we would have a thread or multiple threads with some name convention like Activist Situation 1 - Company Name. Then we would have a proposal from someone which would provide the company, the situation, the desired changes, and contact information. At that point people could buy shares, call the company up and ask for the change desired. You could then post anything you learned or even the fact that you called on the forum in order to encourage others to do the same. The objective might be to have a certain number of separate contacts from different people over the course of a month. If you really wanted to get annoying you could also post customer support numbers etc, and people might accidentally call these and ask to speak to management. We could then coordinate with blogs like otc adventures, no namestocks, oddballstocks etc. The more people find out and try calling the company the better. We could also call regulators and other concerned entities (e.g. to pressure dark companies to release annual reports). 3) Good question! I don't know. I created the thread to get traction. It starts with one campaign. If enough people participate we can start something. I already have a candidate in mind. But to be honest I expected more than one response on this thread. After than we need to get other sites in on this, like Greenbacked, R/security analysis/, blogs, Seeking Alpha articles etc. Then you get traction. Look 4chan and 8chan organize these massive campaigns where they harass people or they cripple websites. Terence Tao and Tim Gowers have organized polymath where he has gotten hundreds of people together to solve math problems. I actually consider the polymath project a model for how this could work. This is what the internet is useful for. Good or bad it is capable of organizing hundreds of people together to accomplish something. If all these other groups can do this, why, oh why, are investors so apathetic?!