KJP

What kind of "practioner" are you referring to, professional economists, government officials, someone else? Any sophisticated economic theory has to get distilled down -- perhaps dumbed down -- into some type of folk version that politicians and the pubic can understand. The folk version of Hayek probably is something like "free markets are good, regulation is bad." That is probably one of the most influential economic theories of the last 75 years. Many governments have pursued it extensively via, for example, denationalization and deregulation of various industries, such as the many denationalizations in the UK and the rolling back of the Permit Raj in India. So, I think there's a good argument that Hayek's ideas, spread though Friedman and others, were some of the most influential of anyone post-1975.

I think the following passage is also worth including from pages 66-67: "But there are two kinds of security: the certainty of a given minimum of sustenance for all and the security of a given standard of life, of the relative position which on person or group enjoys compared with others. There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: so minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision. It is planning for security of the second kind which has such an insidious effect on liberty." I think the parts you quote have to be read in the context of, and ultimately reconciled with, what I quoted above.

Altice USA [tax loss -- now long through LEAPs] Quorum Information Technologies [tax gain]

You can google something like "reinvestment rate, ROIC and multiple" and get examples of the math underlying forward returns at various current mulitples. See, e.g., https://sabercapitalmgt.com/importance-of-roic-part-4-the-math-of-compounding/

Nickel 28 Capital Corp.

Comcast Swedish Match

IDT Corporation

Published in 1988, The Predators’ Ball by Connie Bruck chronicles the rise and fall of Michael Milken and Drexel Burnham Lambert. Bruck is a financial journalist, and the book reads like long-form journalism. Bruck had limited access to Milken himself, so the bulk of the material appears to come from 250-300 interviews of other financial and legal players from that era. The strength of the book is its description of how Milken built and maintained his junk bond empire and its downstream effects. In particular, how Milken’s ability to raise hundreds of millions (and eventually billions) of dollars on very short notice from non-commercial bank sources broke up what, Bruck suggests at least, was an overly conservative and mediocre business and banking elite. The central thesis of the book is that it was Milken’s network of buyers who would commit to huge purchases largely on his say-so that gave him an insurmountable advantage when competing for LBO and other junk financings. Bruck also details the various ways in which Milken built and maintained his buyer network. In the background are the underlying social tensions arising from the largely Jewish newcomers (e.g., Milken, Icahn, Perelman) taking on and, for a period, getting the better of the old WASP elite that had historically excluded them. To describe the creation and maintenance of the Milken machine, the book has to cover about a decade from the late 70’s to late 80’s. As a result, we get 10-15 page vignettes of famous episodes, such as Peltz-National Can, Icahn-TWA, and Perelman-Revlon. But those descriptions are far too short to get any real sense of the nitty-gritty of how these transactions actually happened and the personalities involved. To get that feel, you need to turn to something like Barbarians at the Gate (or, for a more recent era, Too Big To Fail). The sweep of the book – and perhaps Bruck’s limited knowledge as an outsider – also result in a bit too much of her telling rather than showing the reader. For example, Ron Perelman is repeatedly described as overwhelmingly vulgar, but there’s precious little detail from which readers could glean that for themselves. Likewise, the book lacks the anecdotes about what life was actually like on the inside that one gets from reading something like Liar’s Poker.

I found Antony Lewis’s 2018 book The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them on a few recommended blockchain/crypto book lists. At the outset, I have to acknowledge that any book published in 2018 in such a fast-moving area is likely to be out-of-date rather quickly. Moreover, I understand that via white papers and other sources, an interested reader can get a very good start in this area via a few Google searches. So, anyone picking up this book needs to be realistic about what they can reasonably expect to get out of it. With those caveats out of the way, I actually found the book quite useful, but not in the way I expected. Although most of the book is devoted to describing the mechanics of Bitcoin, Ethereum, cryptographic hashing, digital wallets, and so on, it also contains a concise and lucid explanation of how bearer assets (like physical cash) and payments using bank money work in a modern banking system. With that description in mind, the reader can quickly grasp the purpose of a permission-less decentralized ledger, and to me that alone makes the book worthwhile. The book is too dated and simple for anyone who has done significant reading or has some first-hand experience with Bitcoin, Ethereum, NFTs, etc. But if you’re trying to whet the appetite of a Bitcoin/crypto skeptic who prefers old-fashioned books to Discord, you could do worse than recommending The Basics of Bitcoins and Blockchains.

Houghton Mifflin Harcourt 1. Essential industry finally shifting to digital. 2. The digital shift has produced nice winners in the recent past: 3. Balance sheet has been cleaned up: a. https://www.hmhco.com/about-us/press-releases/houghton-mifflin-harcourt-completes-337-million-debt-paydown-with-proceeds-from-hmh-books-media-sale b. $300 million in 9%(!) notes callable in February 2022 [Note current cash balance -- refi is no issue] 4. Operations have been turned around a. COVID/work from home provided helpful cover to push through workforce changes accompanying emphasis on digital -- look at decrease in fixed cost base (e.g., Q3 2021 presentation slide 13) b. Now showing strong booking growths and very high net retention 5. Highly cash generative a. Government customers who pay in advance (see Cambium thread for discussion of "billings" vs GAAP revenue) b. Very high (60-65%) incremental cash margins on new bookings 6. Large tax loss carryforwards 7. M&A can produce value -- buy small company with good product and plug into company's massive distribution network (look at VC and PE activity in space, e.g., Weld North) 8. Federal spending bills appear to be showering money on K-12 education over at least the next 2-3 years. Nice near-term tailwind. COUNTERPOINT: This is a competitive industry. I'm not a good position to evaluate the company's product portfolio relative to competitors. Instead, I'm relying on recent growth as evidence of sufficient quality.

Yes, like Malone seems to be saying, I think the biggest risk to cablecos is the availability of enormous amounts of very lost cost capital to overbuilders. Someone willing to accept low returns on a massive investment can hurt the cablecos. I think that's probably true of any capital-intensive business that is offering a commodity good/service, whether that's rocks, cobalt, or moving bits. Historically, I think this risk has not materialized because overbuilding is time-consuming and there were real costs to capital. The overbuilder has to deal with all sorts of local permitting requirements, has to find local employees, etc. So, before they get too far along, they realize the returns are poor and stop, e.g., Google, Verizon Fios (historically). Part of the cableco thesis likely is "this time is not different." Part of that is whether the most dangerous potential competitors (Verizon and AT&T) have better things to do with their capital.

How would you invest if your current belief is that cannabis consumption in the US is going to increase significantly over the next 10 years, but you have no clear view about what brands (if any) are going to take off or whether cannabis cultivation and retail will produce sustainable economic profits or, instead, turn into very difficult commodity businesses? One thought is Turning Point Brands, particularly its Zig-Zag subsidiary (rolling papers, cones, etc.). [https://zigzag.com/]

Added to: Houghton Mifflin Harcourt Turning Point Brands

It depends on ARPU, which ought to depend on competition. $1500/passing * 30% = $5000 capital cost per subscribed passing. At an ARPU of $90/month (Ting's projection) it produces $1080 in annual revenue. If incremental fiber margins are 90%, that's almost a 20% (972/5000) unlevered return, though I suspect 90% is high for a smaller operator. If you have enough scale to cover overhead, 20% unlevered unit economics looks good. I didn't include anything for sales & marketing costs to acquire the sub, though, and that could be significant for a new entrant with no brand name. But if your ARPU is $60/month it produces $720 in annual revenue. If incremental gross margins are only 80%, that's down to around an 11% unlevered return (572/5000), which I think it's starting to get dicey. I haven't included a cost of capital for the time it takes to get to 30% penetration, or, as mentioned above, anything for sales and marketing to acquire the subscriber. For all of those reasons, I agree that a FTTH overbuild seems to make sense only where the competing product is weak, such that the overbuild can get significant penetration at high monthly prices. I'm also skeptical of the $1000-$1500 cost claim. Ting's history does not yet appear to support that number.

Is part of the existing $6-$7k per subscriber valuation arising from those businesses have relatively little overlapping broadband competition? To make up some numbers, is a no competition broadband subscriber worth $8 or 9k per sub and a broadband sub with overlapping broadband competition worth only $4 or $5k? That to me is the issue the overbuilders have to consider. They can't look just at incumbent economics. They have to determine whether the economics make sense after they've introduced competition. In other words, the overbuilding may not create any value for the overbuilder; it may just destroy a significant part of the economic value of the incumbent business. That is also why overbuilding may not make sense even where it appears that a new connection can be built at far less than the value ascribed to a current monopoly connection. It's also why overbuilding Charter or Comcast footprint is likely much different than overbuilding someplace else.

From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of Economics is a 2012 book by Tom Palley, a labor-affiliated macroeconomist who has written many books and articles over the last 30 years. [His website is here: https://thomaspalley.com/] Although he typically publishes in left-wing, heterodox friendly journals like the Journal of Post-Keynesian Economics and the Cambridge Journal of Economics, Palley’s work on stagnation has gotten shoutouts recently from people like Larry Summers (See https://www.theguardian.com/business/2019/aug/26/central-bankers-conventional-tools-no-longer-working ). In From Financial Crisis, Palley lays out his case that the Great Recession and ensuing slow recovery were the culmination of 30 years of flawed neoliberal economic policy. Palley describes himself as a “structural Keynesian,” as opposed to the New Keynesianism of Mankiw, Krugman, et al., which Palley describes as a softer, kinder form of neoliberalism. As a structural Keynesian, Palley believes that a well-functioning economy needs a stable “demand generating process.” In the post-World War II, pre-neoliberal era (1945-80), Palley contends that the US had such a stable demand generating process in which productivity growth led to wage growth, which led to demand growth, which led to investment, which led to more productivity growth, which led to more wage growth, and so on. The neoliberal reforms – limited union bargaining power, offshoring of jobs, lowering marginal tax rates, etc. -- disrupted this cycle by limited real wage growth among the middle and lower income wage earners and shifting much more income to higher earners, who are more apt to save rather than spend. The resulting fall in demand would have resulted in stagnation but for a massive increase in US public and private debt, which filled the gap in demand until the debt bubble burst in 2008. Although government stimulus spending in 2008-2010 helped stabilize the situation, much deeper structural reform is necessary to prevent a relapse into stagnation or another round of debt-fueled instability. The book appears to be written for a lay audience, so it is a bit short on rigorous empirical support for many of its arguments, but it does contain extensive citations to the economic literature so the reader can delve further into areas of interest. In addition, the book provides a useful popular introduction to demand-side theories of stagnation that focus on the macroeconomic effects – rather than just the perceived fairness or unfairness – of significant income inequality. The Institute for New Economic Thinking publishes many papers along similar lines. See, e.g., https://www.ineteconomics.org/research/research-papers/the-secular-stagnation-of-productivity-growth

I have a portion of my assets managed by an RIA under an SMA structure, though he now also manages a private fund. I do this for two reasons: 1) His strategy is to invest in relatively obscure companies/securities with a value bias, including in non-US markets. I don't have the time or desire to investigate all of these areas, so this structure gives me access to investments that I would likely be interested in but lack the time or desire to discover on my own. 2) It provides some diversification from my own mind/biases, though not total diversification because my mind/biases picked him in the first place. This manager, after fees, has significantly exceeded the various microcap indices, so I'm happy with the results. I probably would not pay someone to invest in US large caps; I could get that through an index fund.

Added to Houghton Mifflin Harcourt Co.

In this context, "related party" is a statutorily defined term that ordinarily would not include a sibling: "The second change would be an inclusion of a related party test when determining whether the taxpayer has acquired substantially identical specified asset. For this purpose, a related party includes the taxpayer’s spouse, dependents, controlled entities and estates and trusts, retirement and savings plans (individual retirement plan, Archer MSA, or health savings plan), Section 529 and Coverdell savings accounts, and other annuity and deferred compensation plans. The related party rule would be a substantial change and could create many traps for the unwary. The expansive listing of related parties would require taxpayers to carefully examine transactions before claiming tax losses on investment assets. It’s often the case that investments of these various related parties are managed by different firms that may not have any transparency into the other holdings, let alone able to coordinate the timing of acquisitions or dispositions. This could create significant headaches for taxpayers." Source: https://www.plantemoran.com/explore-our-thinking/insight/2021/09/build-back-better-act-top-surprises-hidden-impacts-and-implications

As was suggested by Ericopoly, part of the reason may a collapse in transactions arising from supply also being withdrawn as a result of lower prices. Although it addresses a different time period, see on this point pages 39-41 here: https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.2.31 In particular, this paragraph: "I have been fond of summarizing these data by saying that for homes, it’s a volume cycle, not a price cycle. This very slow price-discovery occurs because people celebrate investment gains, but deny losses. Owner-occupants of homes can likewise hold onto long-ago valuations and insist on prices that the market cannot support. Because of that denial, there are many fewer transactions, and the transactions that do occur tend to be at the seller’s prices, not equilibrium market prices."

The more conservative way to look at this is via the pipeline owners. Even if the Biden Administration, et al., ease up on new drilling, are they going to permit new interstate pipelines? If not, the owners of existing pipelines seem to be in very good shape, particularly natural gas pipelines.

Some papers that may interest you: Bonizzi, Kaltenbrunner, and Michell, Monetary Sovereignty Is A Spectrum: Modern Monetary Theory and Developing Countries (2020) Tcherneva, Money, Power And Monetary Regimes (2016)

Altice USA June 2023 $15 calls in non-taxable account. After wash-sale period, I will sell Altice USA common in a taxable account for a loss. In the meantime, I've got double the exposure.

I think we discussed this last year. Are people in cities because that's where the jobs are, or are jobs in cities because that's where the people are? To the extent it's mainly the latter, work from home may not have a substantial effect on demand for urban housing. See: https://fred.stlouisfed.org/series/SFXRSA

See slide 22: https://www.stlouisfed.org/~/media/Files/PDFs/Bullard/remarks/BullardBipartisanPolicyCenter5June2012Final.pdf LTVs appear to be going down from 1970 to about 1982, but I believe this is for all mortgaged homeowners, which may not be the same as LTV at purchase. Also, what is the exact period you're looking at and what was nominal wage growth during that period?