Saluki

Bought a little more NTDOY, and a couple of my resting bids for TAYD that I forgot about got filled

Colorado using drones as first responders. https://www.foxnews.com/media/colorado-police-plan-use-drones-first-responders-calling-technology-future-law-enforcement Could be an interesting trend. Instead of sending police cruisers out for every call, maybe you'll have a bunch of people at their monitors, like in a 911 center, operating drones and responding quickly to multiple calls as a sort of filtering device for patrol cars. It's hard to recruit and train police officers, but this can probably be staffed in a lot less time.

I think the best thing that you can do is be aware of it and think about it when you see it pop up. I have that anchoring bias with price too, but sometimes I start out with a blank piece of paper and say "now it's earning x and buying back stock. why isn't a buy at this price." It's what helped me buy more STNG last year at $40, when I had paid $12 a couple of years before (now it's $82), or bite my lip and pay $50 for JOE when I paid $15 for it earlier. Another common value investing bias I have is selling too early because it reaches a price I wouldn't pay. But when I look at things that I've passed on because they were too expensive, and if I had owned them I would have sold, it's a weird revelation. For instance, I recently bought MSCI which had always looked too expensive to me. But, even after the recent selloff, it has compounded at almost 20% a year since it went public. The safeguard I put in place is that I can buy anytime, but to sell after earnings come out. If it's not after an earnings report, then it's just responding to price fluctuations, not fundamentals about the company. One that I'm consciously working through now is a variation on confirmation bias. There was an experiment in horse betting where professional gamblers were given a certain amount of datapoints (10?) and told to bet on some horse races and give their confidence level. The data included things like past speed at races, number of races in the past month, success % of the jockey etc. Chance would predict a 10% success level, but they managed 17%, so the data was useful. When they gave them more and more datapoints, the success level stayed the same, but their confidence in the bet often doubled or tripled. I have a 3% position in CPNG and a 1% position in ATEX. As I seek out more and more info on these, I'm tempted to go bigger because I feel like I've got a handle on it. But I'm reluctant to go much bigger on them because I think my initial assessment about the confidence in the outcome is correct. More data makes me feel more sure about it, but nothing about the fundamentals, or the competitors will change because of my confidence.

It's weird that his fund is so heavily in technology given how it worked out for his dad. His Dad was the Cathy Woods of the 1960s. He ran a go-go tech momentum fund and was called "the next Warren Buffett", which everyone knows is the kiss of death. A couple of years later his fund was down 90% and he was running a soup can company. I'm totally serious about that. His dad also had nine lives and built up that can company and used it to get back to wall Street by using the money from profits to buy Primerica. So I don't know what the lesson is there. It's either a roadmap or a cautionary tale depending on whether you stayed until the movie.

After reading a couple of books about how bad our electrical grid is, and realizing that clean, but intermittent distributed power like solar and wind will be a challenge, it's pretty obvious that our grid will need upgrades and overhauls. Who will benefit from that? I found this ETF which invests in companies that are poised to benefit from these trends. First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) Holdings - Yahoo Finance However, some of them are huge conglomerates (over $100bln) so I don't think this will move the needle much, and some of them seem already pretty expensive (50x earnings) for a cheapskate like me. Is anyone looking at any smaller companies, say less the $5bln market cap that will directly benefit from this trend? I know people have been pumping Internet of Things (IOT) stocks with unbelievable total addressable markets but no sales for years, so I'm not talking about that. Just actual companies with real world use cases making actual sales. I've owned ATEX for 3 years now and it's not done much, but they aren't losing money and have actual customers. Companies like Motorola, Nokia and Quallcom are developing devices for these kind of use cases, but it will be a division for them, not a main profit driver. I came across one yesterday, but it's such a small cap that my Merrill account won't let me trade it, even with a limit order and two factor authentication that it makes me use for other illiquid trades, so it's probably not for me, but I'm still looking and wondering if anyone has come across anything that looks promising that they'd like to share in this area of the market?

Also added to JOE and NTDOY on the dip today. I probably have enough of both already, but "it was on sale", as my better half would say. Such a weird day in the market where everything in my portfolio was flashing red except for one stock. Been adding slowly to ATEX, FRPH and KRKNF to get them to 1% weight and then I'll stop and check back on them in a year. No particular news on them yet. Sold off some of my higher basis STNG shares that hit the one year mark and bought a few shares or Tsakos (also in tankers but cheaper/with more debt) so that I see it when I log in and do more reading up on it.

Dyson wrote another autobiography about 20 years after this one. This one ends where he invented the washing machine with two drums, which failed commercially because it was too expensive, but he didn't know it at the time. I've owned a Dyson vacuum and I really like the originality, so hearing the origin story is fascinating. He wasn't really a scientist. He studies\d furniture and interior design at an art school and later moved to industrial design. Besides the vacuum that he's famous for, he previously invented the BallBarrow (a wheel barrow with a ball for a wheel) and a "truck ship" which can be used to land without a dock and carry cargo like vehicles. Several were purchased by the Egyptian military and used in a surprise attack on Israel a few months later. Because of its design it was incredibly fast and sat low in the water. When Dyson asked if they wanted him to make any changes to it, they said no. They said they put a man in it and had him sail it at full speed while they tried to shoot him with AK-47s and they couldn't hit him, so they were very happy with it. I'm very impressed with how dogged he was in getting his inventions out there even though he was screwed over by everyone. Employees, business partners, competitors, distributors, all took advantage of him and he ended up in court numerous times to defend his patents or get paid what he was owed. Some of the stories are very interesting because of the variant perception that he has, but also his knack for getting to the root of problems when people over complicate them. When someone asked Munger why, after reading Barron's for 50 years, he went all in on Tenneco. He replied "it was cheap." Dyson had the same epiphany when he was forced out of his own company and was sitting around doing housework and disappointed in how bad the vacuum worked. It loses suction as soon as the bag starts to get stuff in it, so he tried to figure out a way to make a vacuum cleaner without a bag. Here's an example of people overthinking the simple stuff. A reporter asked him this question when the Vacuum was gaining notoriety: "The area where the dust collects is transparent, thus parading all our detritus on the outside, and turning the classic design inside out. Is this some post-modernist nod to the architectural style pioneered by Richard Rodgers at the Pompidou Center, where the air-conditioning and escalators, the very guts, are made into a self-referential design feature?" "No", I replied. "It's so you can see when it's full." Eventually he learns from his mistakes and demands money up front for signing a deal, and guaranteed minimum payments etc. So things work out in the end. This book had been sitting on my shelf for a while so I thought I should read it before getting rid of it by placing it in the free little library nook by my house. I probably should check out the other book he published and see what he's up to.

Biden's tariff on Chinese solar panels, and news today that the Chinese government has told it's solar panel makers that it wants them to stop selling panels at money losing prices to gain market share did a number on almost every solar stock today. https://www.investors.com/news/technology/first-solar-stock-solar-stocks-ai/?src=A00220. +18% https://finance.yahoo.com/quote/CSIQ +15% https://finance.yahoo.com/quote/JKS +17% Almost every solar stock that I looked at today was up double digits. Except for the only one that I own, of course. As I've mentioned, apparently back in the old country one of my long dead ancestors must have done something to greatly upset the village witch, and her powerful hex tries to find ways to (temporarily) do things to my portfolio to make me suffer. It's okay. It's helped me to be more stoic. What doesn't kill me makes me stronger. And what doesn't drive me mad helps me develop a sense of humor.

It's a weird scenario. If you have parameters in place that can't be overridden, that can obviously cause a huge problem, but you have to have safeguards in place to protect against mistakes or intentional acts that benefit the trader. I'd be curious how many times a day the warnings go off. If they go off a lot, I still think it would be weird to keep clicking "OK" after the first 500 warnings. When the position size for the order goes from millions to hundreds or millions, or billions, why doesn't it require 2 people to okay it? I have a friend who worked at a big investment bank and told me that the people at the trading desk had parameters that they had to trade in (run a balanced book, trade FX in major currencies up to $xxx, european blue chips etc.). If someone is down a lot and isn't going to get a bonus, there is an obvious incentive to do something risky and get a big YOLO payout if you're right, and the firm eats the loss if you're wrong. Their solution was very simple: "when we add up your profits for the year to figure out your bonus, we don't count the trades that you made which were outside your parameters." Incentives matter.

Yes, It's like Buffett said about knowledge being cumulative, and you start to see connections. In Bionomics they showed that curve where mice get more efficient at finding cheese as their number of repetitions increases, and they showed the same curve for egg production in the US. If you wanted to start an online retailer like Amazon, it would be impossible now. Bezos started in his garage packing books on the floor and ordering kneepads to deal with the pain of kneeling on a cement floor. Now they have multimillion dollar robots doing the work of moving items around. Absent government subsidies, you wouldn't be able to absorb them absorb the losses on your way to learning enough to be efficient. That's why, according to Chip War, the Soviets didn't make a lasting impact in the chip sector because they were producing chips for military use, so the amount produced wasn't big enough to offer opportunities to learn and become more efficient. So now that TSMC is at the top of the heap with the incredible precision of the new ultra low size chips that can only be made with one machine produced by one company in the Netherlands, it's hard to imagine anyone finding a way to catch up. Ditto for AI and Google/Microsoft. I think that's why there will be a few winners in retail like Amazon (US), MELI (latam), CPNG (Korea, Taiwan) and BABA/PDD (China). As you get better and better, your lead becomes greater and it's harder for anyone except someone who's already doing it to be able to compete. Most of these chip companies are way outside my circle of competence, but it's an interesting thing to learn about.

I usually have several books going at once at I post about them in the books section when I'm done. I've been slowly working my way through the original 1934 edition of Security Analysis which has been sitting on my shelf for years. The writing is so much better than the first version I bought for a class (5th edition?) which had gone through so many re-writes and editors that it was to the original what a chicken mcnugget is to a rotisserie chicken. It's actually enjoyable, as opposed to the later editions that would literally force myself to read a little each day, like taking castor oil, for my own good. I'm also finishing up James Dyson's autobiography. The fascinating guy who invented the bagless vacuum and who got incredibly rich from it despite being screwed every step of the way by unscrupulous people every step of the way in several countries, and having his designs ripped off by large powerful corporations. And I'm finishing up Killers of the Flower Moon on audiobook. It's the third book I've read from him. Very good writer of non-fiction.

I'm long FFH and FF India, so I don't want to do what I'm about to accuse Muddy Waters of doing, but you have to be really careful about cherry picking data points that confirm your viewpoint. Yes, we do. There are good investments and bad investments. For example, we can all intellectually debate about Digit’s value. The issue we take is with the approach to marking it. With successive higher VC rounds Digit was marked up. This is a relevant data point. There is a famous former head of a large Wall Street bank who told his traders how to figure out the mark for a large illiquid position for which there wasn't a market. "Sell 10% of your position, and that's your mark." So this method kind of works for valuing Digit. If something is worth what someone is willing to pay for it, unless you have evidence of a shareholder from a prior round selling for less than what FF says it's worth, then why is the last known sale price a bad mark? And then lo and behold, we have a pretty significant financial crash in terms of multiples of VC-backed companies. We have a number of IPOs in India that massively underperformed and then they're very slow to take the mark-down. And so intellectually, again, if the approach wasn't, "Well, we really care about the marks," why didn't you take the marks down as fast as you take the marks up? Look for the flaw in this argument: Lots of marijuana startups went public in Canada and they all imploded. Therefore, the junior miners in Canada are also in trouble. If he's saying that INSURANCE companies in India that went public are in trouble, that's relevant. If you mean that food delivery and taxi apps in India went bankrupt, what does that have to do with Insurance in India?

I don't okay video games, but I'm enjoying the Fallout series in Amazon prime.

The past couple of days I was adding to MSCI (2% position now), NTDOY and CPNG (about 3.5% each). Unless the price comes down again, I'm done buying for now. Bought some ATEX after the price came down to keep it at 1%.

Looks like Chubb is the mystery company that Buffett has been buying. https://www.dataroma.com/m/holdings.php?m=BRK

Yes, I looked at briefly and put it in the too hard pile. It would be more investable at a higher price if they can get themselves sorted, but they laid off most of their employees, and Carlyle has their nuts in a vice. The other investor agreed to convert their debt to equity, but it's contingent on Carlyle doing the same. I don't think it's gamesmanship, I think the bond covenants prevent them from issuing new shares or debt without Carlyle's approval. So they can't buy more panels for their backlog without cash, but C won't let them borrow more or issue shares. And it looks like it's in C's interest to let it go under so they can "harvest the organs". Maybe the warrants $0.03 might be interesting. I thought about starting a post on it, but it's such a small cap and it's got so much hair on it, that it's not worth it. If C converts the debt into equity it will give them some room to maneuver, but TJ said he's not putting more money in and he's not interested in working for Carlyle for free. He can't stand them. He's a billionaire and could literally buy this whole company with his spare change, but he's not going to do it with Carlyle putting their two cents in.

Dennis Hong, who runs a concentrated book, sold down some Coupang, which is up 20% the past month. https://www.dataroma.com/m/holdings.php?m=SP He also bought a big new position in FOUR, which appears to be a payments processor, like Square.

The quarterly filings are starting to come in and should all be here by tomorrow. https://www.dataroma.com/m/home.php Does anyone see any interesting buys/sells from people? I'll start, it looks like Chuck Akre trimmed some of his American Tower, which he is known for. In an interview I heard him say that a analyst told him that X was the next American Tower and he cut him off and said "son, American Tower is the next American Tower!". He also bought some UBER, along with Tom Russo and Tom Gayner, this quarter.

This came on my radar because I own shares in Enphase, and TJ Rodgers, who runs it, is also involved in some other things, like a struggling small cap solar installation company. REPEAT - Complete Solaria Names T.J. Rodgers CEO (yahoo.com) I don't think I've ever seen such an interesting press release. Here's a sample: T.J. Rodgers closed, “Messrs. Kapp and Rubenstein, I built and ran a real, operating semiconductor company for an industry-record 34 years. I don’t need or want your help. I want your knee off of my neck, so I can breathe. If you don’t free us by converting your debt to equity, as I have, I will resign shortly thereafter and allow investors to observe and cringe at Carlyle’s organ-harvesting methods in action.” Rodgers added an epilogue, “While I was spending Sunday night writing this press release, I received an email from Carlyle at 10:06 EDT from Sanket Patel, another Carlyle employee I’ve never heard of. Patel warned me that my recent threatened press release (i.e. the above) might “necessitate legal action by Carlyle.” Make my day. I would relish telling my Carlyle stories in detail – under oath – to a jury of my peers in a public trial.”

I think Peter Lynch was right when he said that "if you can 8 + 8 and come up with a number close to 16, then you know enough math to be a good investor." He thought the stomach was a more important organ than the brain when it comes to investing. I learned a lot from books like "Fearless Golf" which is written by a sports psychologist who works with the traders at Point 72. It turns out that extreme performance has the same attributes in every endeavor. The author of Fearless Golf said that Steve Cohen has more in common with Tiger Woods or the best heart surgeon in the world than he has with traders who are in the top 10% of his own profession. This short book was written by someone who a Gold and Silver medal in competitive shooting at two Olympics in the 1970s and it's one of the first books to talk about the mental preparation, which is applicable to other endeavors like investing. His book has diagrams of 3 overlapping circle (the conscious mind, the subconscious mind and the self image) which have to be balanced in order to produce performance. Competence affects confidence, so practice and having the skillset to move with 100% conviction is key to great performance. You can't just psych yourself up for something because your subconscious and self image don't have the required memory of successful repetitions to pull it off. It has similarities to the paradox that Fearless Golf discusses. You need to focus only on the task, not the outcome. If you think about anything else, like your getting a good score, then you won't make the shot and your score will be terrible. If you don't think about your score, your score will be great because you are only focusing on the task. Translated to investing, if you think about your P&L or your bonus, or your house payment then you won't be investing with the right mindset. With the right process -- given all my opportunities right now, what is the best use of my available cash-- the results take care of themselves. The thinking is the same in Annie Duke's book. It's interesting because in investing there is a lot of wisdom about looking at your failures to see where you went wrong. This has a different take and when he's asked about a shot he missed, he only wants to discuss or think about the successes because he doesn't want to think about mistakes, since it's not what he should be focusing on. I'm not entirely convinced that's the best tactic, since you won't know what to work on if you don't look at mistakes. I do vividly remember a seminar I took once with a famous jiu jitsu guy who I'm convinced was insane. To say he was intense was an understatement. He accidentally choked out two people while demonstrating a technique and each time just slapped the person on the back and said "go get a drink of water and come back to the mat." During the question and answer section someone asked if you should drill/practice your good and bad side or just your good side. His face got red and a vein in his head bulged and he yelled "Hey! Don't ever say that! You don't have a good side and a bad side. You have a good side and a GREAT side! Don't ever let weakness creep in or it will rot you from the inside." Buffett said that when you see those no-brainer opportunities which rain down money, you should run out there with a giant bucket, not a thimble because they are rare. I think that's the confidence that comes from competence and 100% belief in yourself that he's talking about. There is no self doubt because that isn't part of the process, it's just the numbers. He does socialize with other shooters, who are his competitors, but also his models. Winners have the same mindset and help each other get better, which is why COBF is such an interesting place. It's a short book, less than 200pp and a bit dated since it was written in the 1980s, but still interesting even if people have studied and advanced the field of performance psychology a lot since then. And if you're interested in some entertainment. Here's proof that I am not exaggerating about the jiu jitsu guy

It's surprise to anyone except the generals in the military that the current war is always being fought with the prior war's tactics, and the first to adapt to the new reality has an advantage. The Civil War was fought with muskets, but the invention of Colt's multi shot revolvers and better rifling, made small fighting forces and snipers more effective which altered the tactics. World War I initially was fought with Calvary, but trenches and machine guns changed the tactics quickly for all future battles. WWII started with trenches and the Maginot Line, but the Tank had already been invented and "shock and awe" was quickly the new paradigm. The Russians still relied on Tanks, artillery and naval superiority in Ukraine, but inexpensive drones providing real time intelligence, and even improvised sea drones quickly brought the war to a standstill against a much larger force. Maybe the next war will be all cyber attacks, but drones seem to be what is working now. The above video shows a DARPA prototype by Northrup Grumman that is very interesting. Instead of patrol ships in the Red Sea waiting to find Houthi or Somali Pirates in the middle of an attack, what if it was in sleep mode nearby until activated by a 911 beacon and it could be in the fight in hours instead of days? So my question is, besides the BIG contractors, like Northrup which will benefit, but it will be a small part of a larger operation and won't move the needle, can you think of some smaller companies that will benefit from this? For example, I own some Taylor Devices because I was impressed with the potential of their structural inertial dampers (giant earthquake shock absorbers for buildings) and the growth they exhibited, I thought it would have more growth because of insurance companies who are refusing to do business in some states from rising losses. The devices can prevent earthquake damage. However, that business shrunk last quarter but was more than made up by their aerospace segment, which producers shock absorbers for Predator drones. I noticed that Kraken Robotics (which is pricey but high growth) makes batteries for undersea subs made by others, but used in the oil and gas industry. Could these be useful in sea drones? Ondas is a company that has FCC frequencies that Railroads can use for reliability communications (like what Anterix uses for Utilities), and they also have an unusual tech that is a flying drone that throws a net on other drones, so you can capture it without destroying it (for intelligence or reuse?). Is this a viable military application? Is anyone else working on drone vs drone tech? So my question is do you know of any smaller cap companies that supply parts, equipment, or software for bigger defense contractors doing things like air or sea drones, or cybersecurity? Palantir is an obvious name in intelligence and the big players like Amazon and MSFT are fighting over cloud contracts, but there has to be other smaller suppliers that are feeding into those use cases. Olin makes ammunition for the army, but it's over $6bln so they won't see much benefit even if there are twice as many wars. So something in the $1Bln or less market cap would be interesting. Any ideas?

Someone mentioned this book on the China post and I'm listening to the audiobook. About 20 years ago when I first started investing, I did what Peter Lynch said not to do and invested in something that I didn't know much about, a company called Photronics that made photomasks, which are like jigs for lasers that are used to make computer chips. I didn't lose much but I gained an understanding that tech businesses in general and computer chips in particular are terrible for investors who aren't in the business. When Buffett invested a bunch in Taiwan Semiconductor, I reacted the same way that I do when someone mentions Micron or Skyworks. I listen politely and ignore it. However, this is a really understandable book and it starts at the very beginning: vacuum tubes to transistors, to integrated circuits, to computer chips and you will meet all the players along the way and find out how they got distributed onto the chessboard in the four corners of the earth. Even if you are not interested in these companies as an investment, they are important to know about because of their place in the world economy and politically. Computer chips are the oil that really runs the world economy. And weirdly enough one of the early backers of Micron was Simplot, the potato king. When memory chips became nothing more than commodity, then whether it's a potato chip or a computer chip, you can make money on it by doing commodity type business with it.

Started trimming the STNG shares I bought a year ago (up 50-60%). I wanted to wait for the better capital gains treatment after the one year anniversary. I want to sit on most of the older shares because I hate paying taxes But with cyclical companies, it always feels like the Ogre's feast fairytale where you can eat as much as you want at the buffet, and you can leave anytime, but if you stay too long, at some point they close the doors and kill all the guests.

I trimmed something and sprinkled the proceeds for small buys in some of my smaller holdings: ATEX, FRPH and ENPH.

CPNG, NTDOY and MSCI.