Saluki

I'm sure everyone enjoys today because in addition to being Valentines Day, it's also when the 13Fs are due. Has anyone noticed any big adds, or new names that aren't usually on the radar? I'll start: Pat Dorsey, who runs a concentrated portfolio with 9 positions, just added a 9% position in Danaher this quarter. https://www.dataroma.com/m/holdings.php?m=DA (He trimmed Meta, Alphabet and Smartsheet)

Small adds to OXY, JOE and TV. I had a resting sell order for some SWBI shares at $14 and I got a fill yesterday, so I had to do something with it.

Trimmed a few shares of GOOG in my retirement account and bought a little OXY and TV. I placed a limit order on Fairfax India after the dip yesterday but I didn't get a fill I was tempted to trim to HHH, but I think I'll wait for after the spinoff which should allow me to sell the part I never liked in the first place and keep the good part.

Mojo Nixon died https://www.nytimes.com/2024/02/08/arts/music/mojo-nixon-dead.html I'm a big Elvis fan. And one of my favorite songs is "Elvis is Everywhere" by Mojo Nixon. I don't think he ever got the recognition like Weird Al Yankovic because, unlike Weird Al, people couldn't tell if he was kidding or just a crazy hillbilly singing weird songs about having a Bigfoot baby with Debbie Gibson or killing Don Henley. He didn't take himself, or anyone else too seriously and he reminds me of that Munger Quote about Musk and Trump that you shouldn't underestimate someone who overestimates himself. From the Washington Post obit: As Mr. Nixon told it, he was “not that talented” but instead had “an enormous, irrational amount of confidence.”

If you play that scenario out further, then people buying index funds are buying the components of the index regardless of the valuation. So the index fund becomes like a fund with a momentum strategy. Especially if they are using some kind of dollar cost averaging strategy like contributing through a workplace retirement plan like a 401k. And the value of the top performers in the index, because it is cap weighted, will be affected more by fund flows than fundamentals. So more people contributing to it through their work 401ks will move it up and fewer contributions will move it down. So it should become, over time, much more sensitive to employment numbers: fewer people employed means fewer people contributing. It will also have a secular headwind as boomers retire and begin to sell from their index funds to meet retirement expenses rather than contributing at their end of their work life, which is when they make the most money and therefore have been pushing the index higher.

I think it's hard to come up with a certain price, but directionally it's hard to think of scenarios where there aren't pressures to make it go up. Nat gas is cheaper here than in Europe because we don't have the capability to export a lot of LNG. If that changes, prices will converge, currently that's bullish. Clean energy like solar and wind requires some kind of backup base load generation. Other than nuclear, the stuff that is ready on demand is coal, oil, or natural gas. So if the ESG trend continues, that's also bullish for natural gas. Natural gas is needed to make ammonia, which is used for fertilizer. There is no substitute, so secularly, it will increase demand for natural gas in lock step with global population growth. IMO 2030 is working on what will be the new clean fuel standard for shipping. One of the candidates in ammonia, which should be bullish also. The two problems are that these trends are well known and slow moving, so they will have an effect some day, but who knows when that is. In the short term, natural gas and oil correlate closely with industrial production, and since we don't export a lot of LNG, the US price is linked to industrial production in the US. That's difficult enough to predict in the short term, but going into an election with the current political climate, I wouldn't want to take either side of that bet. The other thing that will affect natural gas prices is the weather, because it's used for home heating. But again, even though the trend points to warming temperatures, it's not something that you can predict in any one year.

I agree with this up to a point. From talking to gun people, it appears that some guns, like Kell-Tec are cheap and look cool, but have a bad reputation for reliability, so people buy them for fun on the range, but wouldn't use one if their life really depended on it. I've watched some "torture tests" from a vlogger, and the cheap Turkish shotguns all failed, but all the American made ones passed, except for Kell Tec. Others like Hi-Point, are cheap, heavy and ugly but have a good reputation for reliability, so it's something that someone would buy if they didn't want to pay up. I was concerned about the possibility of premium brands, like Benelli, offering main stream stuff, or cheap manufacturers moving up the food chain. Diamondback, like many others, started selling AR 15 clones because they are popular and no longer patented so anyone can make it. They they made a decent inexpensive pocket pistol, then a cowboy style 22 revolver for $300. This year they introduced a $750 revolver, which is squarely in the S&W/ Ruger/Colt target market. It appears they want to take the japanese import car approach. Start with the motorcycles, then cheap cars, then better cars, then the premium stuff. I don't know how many people are going this route though. I'm not a gun guy so I hadn't heard of Daniel Defense until recently. But they went from zero to 200 employees and big government contracts in only 20 years. Palmetto State started in 2008 and, according to wikipedia, has 200 employees also. Is this a trend in every industry like Sir Kensington and Harry's Razors coming from nowhere and making inroads against brands like Kraft and Gillette? I don't have a gun, but if I bought one, as you say I would rather pay $450 for a S&W than $300 for a kelltec because I would probably only want one, and I wouldn't want to take the low bid on what is essentially disaster insurance.

I have a mid size position in SWBI, which is up about 23% in year plus a 4% dividend. Normally that would be great, but when everything is compared to the magnificent seven tech stocks, it's just okay. But I visited a gun store recently and asked a million questions and I'm wondering if I should sell and move on. The reviews are great for SWBI's popular Shield Plus and they seem to well liked by police departments (along with Glock and Sig Sauer) and civilians because their reliability, ease of use, compact size and price. In looking at different models, I was surprised at how similar they are in feature and feel (i didn't fire them, so maybe their are differences in recoil). The SWBI and Glocks and Sigs are least $100-200 over budget reliable models like Taurus. That's one of the reasons I liked S&W. With the increase in new shooters as a result of the pandemic riots and increase in crime in many cities, I thought NEW gun owners would favor brands that they have heard of like S&W, Glock and Sig, particularly models that are used by police and military. It seems that existing gun owners are more willing to have several guns for different purposes and more willing to buy niche brands. My realization for a possible bear case is that although SWBI has great margins from being able to charge more for gun that has the same parts and manufacturing methods as other guns, and that they should be able to recognize better margins from the new factory and also from spreading the development costs of new models across a larger number of sales, it seems like a great combo but there is a catch. I saw a LOT of Glock clones, some which even take the same magazines as Glock. Since the original Glock came out in the 1980s, the patent expired and anyone can make something that looks and works just like it for a fraction of the price. Ditto for the ubiquitous AR-15. Unless they come out with another game changer pistol, in less than a decade there will be knockoff Shield Plus clones for $1-200 less that S&W will have to compete with. So while a lot of the gun companies have been around for a LOOOooooong time, the new entrants keep popping up on the low and high end, and they may eventually move to the middle with these Glock clones, or eventually with the M&P Shield clone, which came out in 2012, and should have their patent expire in 2032, I believe. S&W has been around since the 1800s and Berretta has been around since the 1500s, but if you can make a decent gun using tech that was available in the 1800s, it shouldn't be too hard to make them now with more modern equipment. Glock cranked out his first guns on old soviet metal stamping machines that he was using to make curtain rods, furniture handles and knives. On the high end, Benelli, which makes racing motorcycles, started making high end shotguns. Diamondback, which makes racing boats, started making revolvers a couple of years ago, and now a pistol. So if the new entrants in the premium market decide to come out with middle market stuff (like TESLA coming out with a lower end car) or the new entrants in the lower end (Diamondback, Kahr, Rock Island, Palmetto State, Taurus) develop a reputation for quality, maybe the brand recognition of S&W or Glock won't be something that they can charge as much for in the future. I've looked into the liability issue, and I think it's not worth worrying about. Since the recent federal law change, there has been no gun company that has been successfully sued for a mass shooting. Any thoughts from the members, particularly if you are a gun guy, unlike me? What are you opinions of the guns that non-gun guys wouldn't have heard of?

Yes, I listened to the Audiobook also and it was a little confusing that the author was a woman and it's read by a man. I agree that the grid is a mess for political reasons and that people are making money selling into the grid, but no one makes money keeping the grid going and there are political pressures across state lines that have nothing to do with keeping the lights on, so it's not a good setup. I have a feeling that other states are as bad as New England, but that's the grid that she's most familiar with, so that's what she focused on. If I recall from the book, most grids are designed to have about 1.3x the power needed, just in case, and it Texas it was 1.1, which was a disaster when they had a cold spell and couldn't get natural gas in to work the generators. She made a very convincing case for Nuclear, which I had a knee-jerk reaction to, just like most people.

0/NASD Bid x size/exchange $12.90 x 7/PSE Ask x size/exchange $32.14 x 1/NASD I wonder if just putting in a good-till-cancelled low ball bid is a worthwhile strategy. The above quote is from an illiquid stock that i have a very small position in. Part of me thinks that maybe someone someday will get sloppy and do a decent sized market order and you will get a fill, but these good-till-cancel orders mean that with my broker I have to have funds available and just sitting in the account in case it gets filled. Seems like it would tie up capital needlessly. On the other hand: March 2020.

I know the media fawns on this guy, and I've never met him so I don't want to throw shade. Something about the whole thing gives me red flag vibes though. In every interview they compare him to Warren Buffet - but with tech stocks - and say that he's a billionaire. Although he doesn't call himself that, he doesn't deny it. Maybe he's legit, but I don't have an opinion either way. It's just that when people compare themselves to someone like when Elizabeth Holmes compared herself to Steve Jobs or SBF compared himself to JP Morgan or crypto, it seems to me that they are discouraging you from digging deeper. It's like saying "rather than dig deeper, here's a analogy that you will understand, and you can put it in that box and stop asking follow up questions." I think it helps that he's Canadian. There is a thing called "the Canadian Paradox" about how easy it is to commit fraud in Canada because the people are so honest. In a low trust society, like Lebanon, it's hard to defraud strangers because everyone is on their guard. You would only trust someone with your money if he was a relative of yours or of a good friend. Consequently, lots of Lebanese were involved in shipping and did business with handshakes instead of contracts because if you burned someone, your whole family would be pariahs so they would either make good on your behalf or keep you out of the business if you were untrustworthy. By contrast, I heard someone jokingly say that if you haven't made your first million by 40, buy yourself a nice suit, go down to Bay Street and sell shares in your new mining company. Again, I don't know enough about him or his company, but if he were Lebanese or Mexican (both low trust societies), would you take him at face value and ask so few follow up questions? (Funny story about low trust societies. My friend's dad, who is a cardiologist in Mexico, also runs a non-profit in that country. His son is the CFO. When an auditor suggested that he should hire an outsider because of the appearance of nepotism, he was shocked. "A complete stranger? What would keep him from just stealing all the money?" )

Added some OXY.

If you start from the risk of a zero and work backwards, RRs look interesting. Other than ships, there is no cheaper way to move freight. So for large amounts of land based freight over long distances, they are the best option. They are also somewhat monopolies since many of them have merged and some overlap in a few areas, but some have large portions all to themselves. The risk of a new competitor is almost zero because the RRs were built on land grants and rights of way that you wouldn't be able to get now. Advances in technology will allow longer cars and fewer people to operate the trains which should help profitability in addition to growth along with the economy. And in an inflationary economy, most of the big capex was paid for in past dollars but the revenue comes back in future dollars which improves your ROI. There is also a potential to monetize all that land and track in ways that are not apparent yet, but may become valuable in the future. For example, when I was a young energy/telecom attorney, Williams Companies in Oklahoma made a bunch of money from old natural gas pipes that were not being used and not even in good shape. During the fiber boom, they allowed telecom companies to run miles and miles of fiber through those empty pipes. The telecom companies didn't have to get rights of way, or spend a fortune to dig up roads to bury the wires. Win/Win. Those rails go east/west and north/south across the entire US, Canada and sometimes Mexico. Sometime someone is going to figure out a way to make money off that in a way that doesn't involve trains.

I trimmed a few share of HHH which I still think are undervalued but I'm losing patience with it. I had sold out of it completely before the pandemic and jumped back in when they did a capital raise. I have added from $43 - $100, but I'm less than thrilled at some managements bid ideas (a minor league baseball team, a celebrity chef chain restaurant, a seaport museum etc). It's been four years of my current holding and the only reason I don't sell it completely is that spinning off the seaport and entertainment assets into a different company actually sounds like a great idea and might move the needle.

If you read this book, and "The Grid", by Bakke you will know more than 99% of the population about how electricity is made, sold and transmitted. This book gives you just enough info on the capacity bidding to understand how it works and what's wrong with it, but without getting too far into the weeds. It explains the problem with intermittent renewable power like wind and solar. They need standby backup, which is almost always coal, gas or nuclear, and the more renewables you add to the system, the more backup systems that you need. Paradoxically, these backup systems tend to be more polluting. A modern gas fired turbine generator produces a lot of heat and that heat can be turned into steam, which can generate more turbine power and electricity. It's 50% more efficient if you use the excess heat for steam power. But if if you only use it for backup, and turn it on and off to make up for spikes and drops in wind power, then it's not continuously burning and you can't make steam with it. The result is that it's 50% more polluting. And with conventional power sources the grid needs about 1.3x peak power generation but with renewables, they need about 1.7x. She also makes a good case for nuclear (it doesn't produce emissions) for backup power. The Germans did away with some of their new nuclear power and pushed hard for renewables, but the importation of Russian gas was disrupted by the war in Ukraine so they had to use backup coal power. The French still have nuclear and the Germans air is 6x more polluted despite their green power. The only EU country with worse air quality than Germany now is Poland. In New England homes have priority when it comes to gas, so they won't freeze to death. But if your gas is going to people's homes, it's not going to power plants, so they need alternate sources of power. Batteries don't work at scale, and it's kind of foolish to assume they will be the answer. It assumes a bunch of breakthroughs, but hope shouldn't be part of your emergency plan. The bidding system is also fascinating. A lot of wind energy gets bid into the system at $0 because they get government subsidies that are much more than they get from selling power, but they get it for power produced, so they are incentivized to sell all of it. This means that a lot of backup power can't compete and goes away, which makes the grid more reliant on intermittent power sources, which makes it more fragile. Learned a lot that I didn't know from this book. I would recommend it if you are interested in power/utilities or green energy.

For my law review I thought about writing about why, in a supposedly efficient market for stocks, CEO salaries vary so much from country to country. If the US pays CEOs much more than CEOs in Europe, and most executives in international companies speak English, why don't they come here? Or why aren't they paid more there. The two plausible answers I came up with are that corporate governance here which allows things like poison pills, keep you from removing bad managers and that's why they can pay themselves so much with impunity. The other option is that insider trading laws (and monitoring for such activity) is so lax in Europe that you can make up for that difference with your side hustle. The law about insider trading https://www.investopedia.com/terms/r/rule10b5.asp changes so what I learned when I was a securities/ M&A lawyer is probably not the law now. However, if you are not an insider, the standards are different, and how you come about the information is important. If your brother in law works at the accounting department of Google and told you what their quarterly numbers are, that's bad. But if you ferret out information on your own that other people don't have, but could have if they went to the effort, that's okay. For example, hedge funds used to pay satellite companies for photos of the parking lots at retailers so they can count the number of cars in the lot. If you know the average sales amount per customer and you count the cars, you can get a good estimate of earnings. It's not public information, but if someone went to the same trouble, they can get it, so it's not "insider trading". So when @Gregmal talks to locals or goes to planning meetings to find out what's getting permits for which businesses and along what part of 30A, that's okay. It's not on any website, but it's information that you COULD get if you wanted to put the same effort in. If he had access to the same information because he worked at the company, then he couldn't trade on it until it became publicly known.

No, but I'll add it to the list because he's a good writer and I have a fascination with Patagonia, my ancestral homeland.

I thought I was done with buying OXY, but at $55, I had to pick up a few shares. I'm tempted to overallocate and just sell some higher basis shares in a month for the tax loss harvesting.

Just finished the audiobook and highly recommend. The author also wrote Killers of the Flowers Moon. It's a very short book, 160 pages, but very good writing. It's about a descendant of one of the crew of Shackleton's expedition to Antarctica, who had a lifelong obversion with the voyage. When his career in the British SAS plateaued, he decided to attempt to recreate the historic voyage with two other men, one of whom was also a descendant of one of Shackleton's men. After another trip where he retraced other prior explorers routes, he eventually tried to do it solo and it killed him. The audiobook was a nice way to pass the time while walking the dog in the snow.

Other than the Korea competitor alleging anticompetitive pricing, why do you think it's down over 10% in two days? I see some negative articles about North Korea saber rattling and China, but nothing specific to CPNG that would justify this. I'm still adding in very small bites. I have a medium position and I had planned just to sit on it for another year, but sometimes I see the price drop on a stock and I feel like I'm watching my girlfriend at a shoe sale.

Small adds to CPNG, OXY and BTI. Trimmed a little STNG and HHH to free up the cash.

I relistened to this on audiobook recently and it's fascinating. If it were a movie, no one would watch it because it's unbelievable, which is why people say that truth is stranger than fiction: fiction has to make sense. Highly recommend. "In 1919, Texas rancher J. Frank Norfleet lost everything he had in a stock market swindle—twice. But instead of slinking home in shame, he turned the tables on the confidence men. Armed with a revolver and a suitcase full of disguises, Norfleet set out to capture the five men who had conned him, allowing himself to be ensnared in the con again and again to gather evidence on his enemies. Through the story of Norfleet’s ingenious reverse-swindle, Amy Reading reveals the fascinating mechanics behind the big con—an artful performance targeted to the most vulnerable points of human nature—and invites you into the crooked history of a nation on the hustle, constantly feeding the hunger and the hope of the mark inside." The Mark Inside: A Perfect Swindle, a Cunning Revenge, and a Small History of the Big Con: Reading, Amy: 9780307473592: Amazon.com: Books

'The Big Con': If You Can't Avoid It, Avenge It : NPR I'll post a book recommendation in the book section, but if you don't want to read the book, this is still a fascinating story. He literally tracked down the guys who conned him in Texas by travelling across the country with a suitcase full of disguises and a couple of revolvers.

I've seen some interviews with him and this book is on my list. Thanks. (Coincidentally, last night we were watching The Gilded Age and one of the plot lines deals in the second season deals with one of the wealthiest old money families losing a bunch of money to some con men. And Season one dealt with the Steel/Railroad baron financially ruining someone who crossed him in a short squeeze. I'm sure there are a lot of stories like this where it was trying to be clever instead of just avoiding being dumb that ruined people.)

The odds of an invasion contemplate a binary outcome, but there are other scenarios to consider also. What if they invade some of the 100+ islands but not the main island: https://en.wikipedia.org/wiki/List_of_islands_of_Taiwan Argentina took a gamble that the UK wouldn't fight for the Falklands/Malvinas. They were wrong. But if China started taking some of the smaller islands, especially the ones that aren't inhabited or sparsely populated, would Taiwan fight for it? What if they kept doing it? Russia took a gamble that nothing would happen when they sent troops into Ukraine and annexed Crimea and occupied Donbas. It worked then they tried again and started a war. What if the new Chinese navy decides to blockade Taiwan? The US did this to Cuba during the missile crisis. They could destroy the Taiwanese economy without firing a shot. Most of Africa, Latin America, and even Australia have more economic ties to China now than the US. That wasn't the case 20 years ago. Would they support sanctions/shooting war with China?