Pelagic

Miami, Fl

Rather than the question of women in investing, I know several very shrewd female investors who don't participate in online discussions but will read them occasionally, I'd be interested in the prevalence of women on online discussion forums in general. This data seems to confirm something I've noticed across the web, that men are overrepresented in online discussions. Perhaps a sample set of CoBF offers little in the way of data on female investors but rather confirms that males are disproportionately represented in online forums - particularly when it comes to users willing to participate in silly polls ;D Maybe we just get bored easier? ::) http://www.pewinternet.org/2015/08/19/mobile-messaging-and-social-media-2015/2015-08-19_social-media-update_04/ Anyone interested in further data collection could read Quora's various investing topics where users are (or at least supposed to be) using their real names and tally male vs. female questions/answers/comments.

I've heard of people having a lot of success with this strategy for buying as well. Know what you want going in and solicit bids until you get a price you're happy with, since you have their price in writing if they want to play games you can easily walk away and go to the next most competitive dealership. Of course this is based on living in an area with lots of dealerships within a reasonable distance.

There's a strict limit of 1 automated lawnmower per block, if they get too close to one another they'll start plotting an uprising against their human masters ;D I think of these automated techs are just capable enough to replace the boring part of the job allowing humans to specialize. If the lawnmower can mow the easy parts of my yard or the roomba can do most of the house, I can handle the rest - hopefully a lot quicker than doing it all myself now. Think how much human labor washing machines and dishwashers replaced when they first came into existence, sure you still have to put in some effort loading and unloading them but the majority of the work that used to take hours is done for you.

One of my friends founded a robotics company. His business model is not to sell the robot, but rather rent it out for the equivalent of the cost of a human (i.e. if the human would be paid $30k/year, the rental for the robot is $30K/year). But the robot doesn't take sick days or vacation, doesn't get benefits, and doesn't quit and need to be rehired and retrained. With this model, if the capabilities of the robot are the same as the human, the risk of using a robot is low since costs are automatically lower. When I look to see at the places his company is gaining traction, I have little doubt that cost will be a problem--he's already replacing fairly low playing jobs, and efficiency will only improve. Thus, I think almost anything that can be roboticized will. Cool business model, what fields are his robots "working" in? One less obvious effect of robot labor, and your friend's business model seems to correct it, is that in an industry heavily dependent on robots it's a lot more difficult for new entrants to the market to compete. Some simple math, let's say the initial purchase of a robot is 5x average human salary so a robot replacing a $50,000 a year human is $250k. Hiring 5 humans, paying them every week or two weeks, and seeing if the business model works and can make a profit in the first year is probably easier than finding financing for $1.25 million in robots just to get started. Being able to rent them or share them with another similar company since you might not need them 24/7/365 opens up a lot of possibilities, of course soon there will be a used market for them too ;D

For grass cutting I can envision a couple neighbors sharing one of these. There are already some automated baristas, could see these becoming more common for coffee shops and maybe even bars where a bar with 2 or three bartenders now has one human and an automated bartender to handle simple orders efficiently. The real question though is cost, just because technology can replace a human doesn't mean it necessarily will - it's hard to justify a several thousand dollar investment for something that costs you a couple hundred dollars a year. Technology doesn't necessarily eliminate the need for human action either, I'd guarantee that someone who buys that automated mower still has to fiddle with its route or bring out a string trimmer for areas it misses sometimes. We can't think of technology as a 100% replacement of human activity in a space, more like 85-95% replacement of the total man-hours with those remaining in the field becoming more specialized at doing what only a human can do.

If you liked the second link with graphical data on a state by state basis, this site offers similar graphs but by country. It's interesting to see how many developing country's still use fuel oil, total energy production by country is also interesting. http://www.tsp-data-portal.org/Breakdown-of-Electricity-Generation-by-Energy-Source#tspQvChart

One of the issues I see with deep value strategies like this is that it's hard to account for what percent of the companies invested in contributed to the outsized returns making them appear excellent while conducting a backtest but hard to execute in practice. A similar analogy is found in Angel Investing where an investor creates a portfolio of say 30 startups. Most, 80% or more, are likely zeros, 10% breakeven, 5-10% are doubles or triples, and you might get lucky and have one or two that are 10x or more that make up for the rest of the portfolio's losses. Similarly, an investor conducting a deep value strategy like this might miss, for a variety of reasons, the handful of stocks that contribute to outsized returns or at the other end avoid some of the zeros skewing actual results. I still think in general you're likely to do better than larger index's if you're able to find and invest in a number of extremely cheap small cap stocks, I just think that the strategy is harder to actually execute than backtesting implies because of illiquidity and qualitative biases of investors. For instance: A "smart" investor might have avoided those losing money for example.

Nuclear. The fact that India and China get around 70% of their electricity from coal probably has more to do with this than ICE vehicles. Modern internal combustion engines have comparably very low particulate emissions. It's one thing to plan to replace coal with solar/wind, it's another thing entirely to actually do it. Both countries currently receive about 4% of their electricity from wind while solar and other non-hydro, non-wind renewables account for around 1%. The process of actually replacing the 3,700 TWh of electricity generation in China derived from coal with renewables is daunting and a lot harder than some bureaucrat saying ok, no new coal plants we're only building solar and wind facilities from now on. It's not that China and India don't want clean air and low emissions, it's just that the scale involved in mind boggling. China is already the world's leading installer of wind and solar with the most installed capacity of each and together they barely makes up 5% of their total energy production. I think China and India will need to utilize clean coal technology extensively, as well as as much natural gas as they can get their hands on, I just don't see renewables scaling fast enough to address particulate emissions in the timeframe Chinese and Indian citizens want them addressed. I'm not sure what the lead time is on a new nuclear plant in China or India but if you wanted to build a new nuclear plant today in the US, you likely wouldn't be producing power from it for at least a decade. This site is showing that new nuclear plants coming online today, as opposed to additional reactors at an existing site, started roughly 7-8 years ago which likely doesn't factor in the design/permitting phase prior to construction. On the bright side, new construction is projected to complete in roughly 5 years. http://www.world-nuclear.org/information-library/country-profiles/countries-a-f/china-nuclear-power.aspx Certainly nuclear is an option and will take some of the burden off renewables and displace coal, but nuclear projects tend to take a long time to complete and be expensive relative to other options.

The fact that India and China get around 70% of their electricity from coal probably has more to do with this than ICE vehicles. Modern internal combustion engines have comparably very low particulate emissions. It's one thing to plan to replace coal with solar/wind, it's another thing entirely to actually do it. Both countries currently receive about 4% of their electricity from wind while solar and other non-hydro, non-wind renewables account for around 1%. The process of actually replacing the 3,700 TWh of electricity generation in China derived from coal with renewables is daunting and a lot harder than some bureaucrat saying ok, no new coal plants we're only building solar and wind facilities from now on. It's not that China and India don't want clean air and low emissions, it's just that the scale involved in mind boggling. China is already the world's leading installer of wind and solar with the most installed capacity of each and together they barely makes up 5% of their total energy production. I think China and India will need to utilize clean coal technology extensively, as well as as much natural gas as they can get their hands on, I just don't see renewables scaling fast enough to address particulate emissions in the timeframe Chinese and Indian citizens want them addressed.

Ironically this is the same reasoning behind peaking natgas power plants that he foresees no longer being necessary by 2030. Perhaps ride sharing of private vehicles like we know it today will still be relevant despite Uber and Lyft's efforts to move to a fleet of autonomous vehicles. Peak demand needs to be met somehow and private cars that are unused at the time or where use as part of the ride sharing pool is preferable to the owner's use will fill the difference between average usage and peak usage. Speaking of which, if you were an investor in Uber or Lyft, would you be happy initially investing in an asset light technology platform and having it pivot into an asset heavy fleet of company owned autonomous vehicles? (I realize returns so far have been awesome ;))It's always struck me as two very different business models. Once autonomous vehicles for ridesharing are common place in urban areas, I can see it becoming like the airline business where you have apps that let you comparison shop for the lowest fare, forcing most participants in the space to compete on price.

The question as i see it is, can we extrapolate cost trends from technology, into other physical products where technology only accounts for a portion of the unit cost? Improving technology has certainly had a major impact on lower costs for electric cars and solar but will the trend lines continue or will they plateau as the portion of the cost that technology represents becomes smaller. Solar for instance is still going to have manufacturing and installation costs for instance and cars will still need steel and aluminum and somebody(thing) to stick it all together, whether they're self driving EVs or human controlled ICEs. I think it's naive bordering on disingenuous by the presenter to put up graphs of trend lines and then imply that costs will fall at the same rate or that utilization will increase at the same rate, especially when there are competing technologies benefitting from some of the same advancements available to self driving or electric cars or solar. That said, assuming the autonomous vehicle future comes to fruition, there are some interesting implications. I know a lot of people who are "car people" for lack of a better term, they like their cars, know everything about them, go to meets with other owners, etc. Is this whole subset of American culture going to disappear? It's hard to get excited about a vehicle you have no control over, it will eventually become a commodity item with one car interchangeable for another. The incentive to take care of or fine tune your vehicle is a lot less if you aren't driving it, not a particularly bright future for aftermarket auto manufacturers.

CLF and VALE. Iron miners in general but these two seem to get more than their fair share of abuse.

Is that really true? I would think that there are ways to prevent a failure in one place from compromising all the system. Clearly shutoffs or turnoffs should work pretty fine. But then I am not a mechanical engineer, so ::) In general though, this is a troll thread, so I might not reply to any further comments. What if the tubes were completely sealed every so many yards (or some other distance) and each gate only opened in enough time for the train to go through then closed again? It would need sealed sections that the car could enter then exit, like a kilometer long airlock of sorts that had a pump mechanism to create the vacuum and then slowly bring it back to atmospheric pressure if need be. I assume the final design will likely have some kind of partitions for emergency use that would seal to prevent further damage to the system. Still, you have the issue of stopping trains in the tunnel and evacuating the passengers from within the tunnel, passengers who would still be in vacuum which would need to be repressurized. Partitioning the tube into shorter distances does have the added benefit of allowing stops prior to the destination and maintaining a 100km section of vacuum tube would likely be easier, although still incredibly difficult, than a 600km vacuum tube. From the videos and pictures I'd estimate each each tube section is 30 meters long, meaning for the entire 600km long tube you're looking at a minimum of 20,000 welds to connect tube section, double that for the tube going in the opposite direction. Every single one of those 40,000 welds needs to be perfect to maintain vacuum along the length of the tubes, even a small issue with any one connection could compromise the entire system. From an engineering standpoint, it's only a bit ironic that people who are so quick to point out how susceptible oil pipelines are to leaking are faithful that the hyper loop's "pipeline", a pipeline orders of magnitude more difficult to design and maintain with little existing knowledge base to build upon, will never leak. Should the hyperloop succeed, hopefully the expertise used will trickle down into other industries because humans have been trying to build pipes that have zero chance of leaking for a long time and still haven't managed to do it. I also question the utility of striving for close to vacuum conditions, I believe they want 1/1000th of an ATM as the pressure within the tube. Creating a tube that can hold 1/10 an ATM seems like an easier proposition and you get 90% of the benefit and avoid a lot of the risks. Musk says it will be net energy positive thanks to the solar panels on top of the length of the tube so a little more energy needed to power the cars because of the increased air resistance shouldn't be an issue.

True, but the same argument could be made for planes. Ultimately all forms of transport have material weaknesses that make them vulnerable to accident or attack (planes = altitude and pressure, cars = bridges and tunnels, trains = any removal of track, boats = mild issue of sinking when holed). Yet, all work extremely well. I have no idea whether the hyperloop will join them, but I won't be surprised if it does. +1. Trains have thousands of miles of unguarded tracks that could be damaged in minutes using a chain and a pickup truck. Cruise ships can now carry as many as 5-6 thousand people, can you imagine if a terrorist sank one? The hyperloop will be vulnerable too, just like every thing else is. The problem with the hyper loop is that vulnerabilities extend across the entire route. If a plane flying between LA and San Francisco experiences a problem, all other planes flying that route can continue on, unaffected. With the hyperloop a problem at any point between LA and SFO is likely a death sentence to everyone transiting that route aboard the hyper loop due to the loss of vacuum and resulting shockwave of air rushing down the tube, resulting in overpressure in cars further down the line. When detractors start to use terrorism as an argument against something it's often for lack of more well founded arguments. However, in this case whether you call it terrorism or an expansion problem due to thermal differences or metal fatigue anywhere along the several 100kms of tube, a failure is absolutely catastrophic for the entire system, something not found in other modes of transportation.

I agree. You have to put yourself in the shoes of an energy company or utility CEO, at the end of the day it's a lot easier to just build wind/solar as needed than to build complex long lead time nuclear projects. That your customers and the government are falling over themselves to get you to build more renewables and people are actively hostile to nuclear, despite what the data says, makes the decision even easier. Nuclear's window of opportunity to become humanity's prime source of electrical generation was short lived, had it developed at a similar pace throughout the 80s, 90s and 00s we'd probably have a much higher % of nuclear at a lower cost than today's nuclear power with less renewables and coal usage worldwide. It still has a role today but I don't think we'll ever see it represent most of our power generation needs like early nuclear proponents envisioned.

It's amazing to me how caught in the '70s and '80s the debate around nuclear still is. Safety is not the issue with nuclear plants today, nuclear is many times safer than even the safest renewables in terms of deaths per unit of energy produced. It's appealing to the public to claim a "safer" nuclear design but when you look at the data, modern nuclear plants are an extremely safe and effective form of energy generation. Additionally, storage isn't the issue it was when nuclear first came online either. We know how and where to store spent fuel safely in salt caverns for millions of years, it's just a matter of political will to make the system feasible. Debates focused on safety and what do to with waste have hamstrung nuclear power since its inception when in reality its track record is far better than that of any other form of energy generation, wind and solar included. These two articles give a breakdown of deaths/energy produced by source. http://www.nextbigfuture.com/2011/03/deaths-per-twh-by-energy-source.html https://www.forbes.com/sites/jamesconca/2012/06/10/energys-deathprint-a-price-always-paid/#7331d062709b In my opinion, nuclear has an optics problem. Most people have little to no understanding of how nuclear fission works and what the real risks involved are, nuclear and radiation are buzzwords that no one wants anything to do with. You can push statistics about how objectively safe nuclear is in comparison to other forms of generation and they'll still oppose nuclear because it's nuclear and nuclear is scary. In a command economy perhaps this issue would be irrelevant but for those of us in the west it magnifies itself in the form of regulations and public activism against nuclear that delays construction and adds to costs. Add to that the inherently complex nature of actually building a nuclear plant and the fact that each plant is a bespoke project, we're not quite at the reactor in a box plug and play point yet, and you have the reason nuclear has failed to live up to expectations. Part of me almost thinks nuclear has missed its shot, with renewables often offering a cheaper alternative with far less lead time and hassle to build, nuclear has to compete not only on optics but also on price against other clean energy sources. I wonder if global warming and CO2 emissions had been as big of an issue in the 70s, when public opposition to nuclear began in earnest, if the opposition would have been as strong. 40 odd years of new nuclear construction in the US and elsewhere in the world would have changed nuclear power as we know it and likely significantly reduced CO2 emissions over that time period, to say nothing of particulate emissions from coal power which have killed literally millions of people during that same time period.

I'm trying to get a handle on the incentive structure for the tax assessment board, perhaps you can shed a little more light on how they work. I assume they're either elected or appointed by elected officials so ostensibly they work for the residents? What prevents them from just lowering everyone who petitions taxes, save perhaps those outwardly hostile to them in their hearings? Do they work under a quota where they can only reduce property taxes in a year by $X and you have to argue for a portion of that quota to be applied to your property? Other than people who piss them off, why wouldn't they reduce most petitioners taxes if they have a somewhat valid claim to it? I can't imagine they're being rewarded for keeping taxes high.

Great posts BG. For some of the Chinese takeout restaurants I frequent, it seems like they have a 100 or more menu items. Do you think having such a large menu slows down the business during peak times if someone orders one of the less common options? Could a Chinese restaurant that took the best selling third of their menu and made that their new menu do better i.e. stocking higher quality ingredients, more time spent on prep, etc. One show I enjoy is The Profit with Marcus Lemonis and he occasionally invests in restaurants, usually those with something that passes as a brand in their local area and multiple locations. One of the things he almost always does when investing in restaurants is simplify the menu using data on what people are ordering and what dishes have the best margins and fit best with the brand the restaurant is trying to create. Just wondering if this logic applies in the Chinese takeout business too. I've noticed he also encourages restaurants to branch out with food trucks as a higher margin side business.

I.e. owner works 24 hours, their family works 24 hours, and/or hires (potentially illegal) immigrant workers who work 24 hours for below official wage salary. Which makes the operation the low cost operator. There might be more to it, but the huge-work-for-cheap is likely major component, no? +1 Don't underestimate the value of a couple teenagers working in the family business for next to nothing. As an outside owner it's not something you can replicate but it is something you have to compete with if you're entering their market.

A very well written piece, thanks for sharing.

You should show this to your friend. The initial argument that cows/pigs/sheep and maybe chickens take a lot of feed input relative to what we get back in usable food is fundamentally sound. Whether we're limited by feed inputs or not is a separate question, but there's probably some benefit in raising food sources that are efficient in their conversion of feed to food on our tables. Now to crickets and other insects - they have a feed conversion ratio of around 1.7:1 meaning you need about 1.7kgs of feed for 1kg of insect. By comparison chickens are 1.9:1. The real surprise when I was looking into this though comes in aquaculture. Farm raised salmon can be as low as 1.2:1 and shrimp in the range of 1.6:1 While we can discuss the taste quality of farm raised salmon and shrimp, as protein sources they're quite fine and probably quite a bit more palatable to the average consumer than insects. http://www.nmfs.noaa.gov/aquaculture/faqs/faq_aq_101.html http://www.aqua-techna.com/en/productivity/experts/feed-conversion-ratio-farmed-fish

Certainly interesting in terms of the design and story, thanks for sharing. I wonder what the market is like for CO2 used in oil field stimulation, are oil companies going to be paying power plants for their excess CO2? I know transmission over long distance will add to electricity costs and oil producing regions don't necessarily overlap with high amounts of power demand but there should be some areas where this technology is applicable. I also have to wonder how long the CO2 will stay trapped underground? I've always thought of carbon sequestration as an outside the box solution, wholly different than most of the approaches to carbon emissions. If you can figure out a way to do it on the cheap, or in this case perhaps even get paid for captured CO2, it's great. Perhaps one day we'll figure out a cost effective way to use captured CO2 as a feedstock for usable fuel, like when renewables are producing excess energy.

I adopted a 1 year old yellow lab two years ago and then about 8 months ago I adopted a cream/white doberman puppy who was about 6 months old. I've had dogs all my life and the lab had the most energy of any dog I'd ever met, until I got the doberman. She's almost old enough to where I can start taking her on runs with me but for now I try to let them tire each other out, they're wrestling under my desk as I type this ;D

Yes there is a healthy used market but I think its supportive of new gun sales rather than detracting from them. When people go to the range they bring an assortment of guns, some of their guns get shot, some don't but they're still there to shoot. A lot of gun owners like having a collection of guns to shoot and having options available to them. This allows others at the range to see and potentially fire a wide variety of firearms and say well, I liked shooting that one let me buy one too. There may have been a rush to buy because of legislation fears but I don't foresee gun owners flooding the used market with guns anytime soon. I think what's more likely is guns were purchased and locked in safes in a rush to purchase and now owners have saved up enough to equip them as they want them. I think there's also a misconception that a used firearm is a complete package. Rarely does someone purchase a rifle, whether brand new or used, and use as is. Gun owners want to accessorize their guns with scopes, stocks, grips, tacticool gear, you name it. A lot of these parts are purchased new, I don't know the breakdown of new vs. used accessory purchases but I suspect a lot of gun owners are more willing to buy new accessories and a used gun than the other way around. A good scope for instance can be close to or more than the purchase price of the gun. As for the peer to peer sales sites, frankly I wasn't impressed. It's like the stone age of internet payments on them since PayPal doesn't allow for gun related transactions. You have to trust the person you're dealing with and either do a direct bank transfer to them or send a money order by mail. The purchaser also to go through a local FFL which receives the weapon and somewhat complicates the process and will likely charge a fee as well. What I'm getting at is for most transactions conducted online for firearms the marketplace site, whether it's Armslist or one of the others, is not party to the transaction and thus can only charge a listing fee. I think they do charge a % take on sales through a dealer with an FFL but there's nothing to prevent a buyer contacting that dealer directly.