I Miss You! May 10, 2007March 6, 2017 YOU NEVER CALL, YOU NEVER WRITE Well, I’m glad you never call – but I really miss your e-mails, and finally realized why they shrank to a trickle a week or two ago. ME-MAIL is broken! It seems to work – I sent one myself yesterday and the confirmation screen said, ‘It worked!’ But it didn’t. I really apologize to those of you who took the time to write. I would have noticed it sooner if the emails had stopped altogether. I just thought at first I must really be boring you . . . or that you had finally all come over to my point of view on cauliflower, gasoline prices, and Borealis. But I finally realized that the emails that were coming through were not the ones from ME-MAIL, but rather the ones from those of you who have added my e-address to your address books and write directly. (It’s “myvastfortune” over at AOL – but, please, links only, no attachments.) How the heck am I supposed to write this column without your estimable contributions? Until we get this fixed, please use the direct e-address. And on the off-chance you have a copy of what you sent in the last 10 days (though I know ME-MAIL makes that unlikely), by all means re-send. ENCYCLOPEDIA OF LIFE Here is an inspiring project that you – or your kids – will certainly want to know about. (Thanks, Nathan.) It’s a sort of cross between SETI (everyone working together to find extraterrestrial life) and wikipedia (everyone working together to drive the poor CEO of Encyclopedia Britannica into an unrecoverable depression). Its aim: to catalog all the world’s species. (That should keep them busy for the summer.)
Or You Could Buy Mom Some $3 Gas May 9, 2007January 8, 2017 GAS PRICES Just six months after the mid-term election, gas prices are about to break through to new all-time highs. Now there’s a surprise. I wrote last fall: So gasoline prices have come down and people are happy again – just in time for the mid-term election. What a stroke of luck for the oil companies! What a further stroke of luck it would be if prices then went back up after the election. Of course, there’s that old expression about ‘making your own luck.’ But only a cynic would suggest that oil companies have any influence over the price of gasoline. Or that, even if they did, they would ever try to use their influence to help the Administration retain unchecked power (other than with political contributions, which thus far in 2006 exceed $12.5 million, 83% to Republicans). ☞ Or that the Saudis, who are blood-brother Bushies, have much to do with the price of oil, either. Some thought I was being too cynical – and I’m not sure they were wrong. But I no longer dismiss such things out of hand as I would have before we became a nation that does not torture (we just waterboard) and a nation that goes to war only as a last resort. IF YOU’RE A PROGRESSIVE WHO LOVES HIS MOTHER . . . . . . Go here, click on the little radio microphone in the top right corner, and type PRESS. If you decide to buy something, you get a free vase and my pal Bill Press (formerly of CNN’s Crossfire) gets credit from his advertiser. RUNNING DOS UNDER VISTA I was scared to try Vista until I saw this free software that lets you run DOS programs – like, oh, say, Managing Your Money – just the way you did even back in Windows 98. I’m still scared to try Vista, but less so.
Yet More o’ Borealis May 8, 2007March 6, 2017 I have clearly lost all perspective. It’s gotten to the point that – as much as I’d like the millions (oh, baby!) – my Number One goal for Borealis is to be able to say to the rocket scientist friend who taunts me and pooh-poohs each new development (‘The plane moved? With enough gearing, an ant could move the plane – it is a scam.‘) . . . ‘HA!’ That’s what I want to say to him: ‘HA!’ I live for the day. ‘HA!’ Clearly, this is no way to run your finances, which is why you must bet on Borealis only with money you can truly afford to lose. IRON ORE So according to this press release a couple of weeks ago, Borealis subsidiary Roche Bay’s joint venture partner Advanced Explorations has scraped together some cash to continue work up North evaluating our prospects. It goes on to say: Recent (2006) metallurgical studies by SGS Lakefield from core samples collected in 2006 and historical core from the property corroborated earlier studies that consistently found that upgrading of the iron content was achieved by grinding and magnetic separation alone. The iron content of the concentrates produced varied between 66% and 71%. It was also shown that dry magnetic separation of a crushed product can lead to upgrading the feed material to 40% iron, while recovering 99% of magnetic iron in the feed material. The studies also found that the vast majority of deleterious elements reported to the tailings, resulting in a clean, high quality concentrate. The only exception was sulphides, but during pelletising tests conducted in the past, the sulphur content came down to 0.01%. The Bond ball mill work index was found to be between 6 and 9 kWh/ton. Paul Palmer P. Geo, P.Eng of Golder Associates is the QP within the meaning of 43-101. The geologic information within this release is extracted from a qualifying report filed on Sedar and coauthored by the QP. The content of this release has been reviewed by the QP who approves the content of this release. ☞ I know as little about iron ore as I do about dredging (see yesterday’s disquisition), but I have learned that ‘Sedar’ is the Canadian equivalent of our S.E.C.’s ‘Edgar,’ and that a ‘QP’ is a ‘Qualified Person,’ which is a professional designation harder to come by than, say, a beautician’s license. Click here for the definition. Meanwhile, last week Advanced Explorations announced what appears to be a hoped for May 16 closing of their financing agreement, going on to say that: An exploration camp has been established on site and two drills and crews are expected to be mobilized in the near future. The Company anticipates completing sufficient drilling in the next 4 months to generate an updated resource calculation. Historical work undertaken on the property was not to NI 43-101 standards and no resource could be stated from the previous work. ☞ All I’m saying is that this is an awful lot of trouble to go to – and cold! Oh, my God it must be cold! (and there are polar bears) – if someone, including a Q.P., didn’t think there were potential here. WHEEL TUG And then there is the Wheel Tug subsidiary of the Chorus Motors subsidiary. I know I posted the Wheel Tug press release about its agreement with Delta Airlines, but in case I forgot to, here is Delta’s own version: “Certainly we expect this to be a ‘win’ for us on the business side by reducing our costs, but we’re also excited about the potential for removing some complexity from gate operations for our ground personnel and doing it in an environmentally friendly fashion,” said Walt Klein, Delta’s director of Quality, Engineering and Training. Full development and approval of the system is expected sometime in 2009 and Delta, as WheelTug’s launch customer, could begin installing the system on its fleet of B-737NG aircraft as early as late 2009. The WheelTug system includes powerful electric motors in the airplane’s nose wheel that will enable pilots to back away from gates without a tow tug and then taxi to their takeoff, or a remote start point before starting the airplane’s engines. After landing, the pilot can turn off the jet engines and use the system to drive the airplane to its gate. ☞ You can inspect a WheelTug patent here, but of far more interest to the lay reader (well, me) is this Powerpoint presentation to a conference of landing gear engineers last week. Not that I understand the engineering – but I sure understand the projected annual savings of $1 million or more per retrofitted aircraft, and the environmental benefits. So if WheelTug earned a royalty of $50,000 a year – 5% of the projected savings – on, say, 5,000 jets, that would be $250 million a year, pre-tax . . . which ain’t hay to a company whose present market cap is $50 million. (The savings are fun to imagine. There’s the fuel, of course, and the tow trucks. But all kinds of other things you wouldn’t think of at first. Such as that the pilot could turn on his WheelTug motor to get his wheels spinning rapidly as he’s about to land – so instead of that rubber-burning jolt you feel when giant, expensive tires have to go from zero to 200mph in an instant, you’d land smoothly, with the wheels already turning.) My rocket-scientist friend may certainly prove right, which is why this is a speculation. And neither the iron ore nor the motor is likely to start gushing actual cash – if either ever does – until 2010 at the earliest. Maybe the motors will prove unreliable. Maybe the Canadians will find endangered species living on our iron ore. But we’ve certainly made progress. Here are some excerpts from the company’s (admittedly wacky) weekly investor email: ********************************** WheelTug plc We have had a great conference, making contact with the relevant companies, and some very impressive and experienced engineers. There was a session on towbarless towing (which usually means tugs that lift and carry the front gear instead of pushing and pulling with a towbar), and the speaker of that session asked us to present WheelTug. He gave us his whole time, and we used it – all 90 minutes. The room was standing-room only, and most people there asked at least one question. The Powerpoint show we delivered will be posted on the SAE web site. . . . We continue to add to our staff. . . . This week we welcome on-board experts in FAA certification and airport operations. . . . The first of many WheelTug patents has been issued, and is available on our web page. ************************ Power Chips plc, Cool Chips plc, Avto Metals plc As reported, a recent modification of deposition conditions of Avto Metals yielded a 3x increase in reduction of Electron Volt Work Function over previous work. In absolute numbers we saw about a 30% reduction in eV, which is huge news. This has to be confirmed and confirmed again, though this is very exciting news. The wafers from the second manufacturing round from our European foundry have arrived. We made a few improvements to the mask and deposition process, expecting some improvement in Avto effect. We will attempt to replicate the recent findings on Avto Metals deposition condition on these new wafers. Sourcing of wafers for “Round 3” has commenced but we don’t have a firm delivery date yet. We expect a much larger Avto effect from “Round 3”. The latest tests are beginning to verge on commercial results and there is actually a possibility that “Round 3” can give us commercial results. This is almost too much to hope for, but it is a real possibility. We continue to have discussions world-wide regarding funding. [. . .] Our general research and patenting work continues apace. We are working on fundamental additional scientific breakthroughs in several fields which we are patenting. These are truly exciting times. Please pray for Gogita. Chana B. Cox [the chairman’s wife] has just completed another book, “Reflections on the Logic of the Good”. This is another super read. This book and “Liberty, God’s gift to Humanity” are both very basic political theory. Please look at www.religiousliberalism.org. This is a great show done by Rebecca Becker on the “Liberty” book. It is a marvelous visual presentation. “Liberty, God’s Gift to Humanity”, by Chana B. Cox is a spectacular read. Tonight is the 31th night of the Omer. Lag B’Omer is Sunday. We are planning on building great bonfires. Good Shabbos. And to you.
Borealis, Mud, and Cauliflower May 7, 2007March 6, 2017 CAULIFLOWER It is amazing how long a head of cauliflower stays good in the refrigerator – especially if it’s Andy Boy cauliflower* – and I have learned that you can just ignore those brown ‘scuff marks’ that begin to appear; they’re entirely harmless. Or have been, so far, to me.** So to vary the pace, consider having a head of cauliflower in the refrigerator from time to time, and just breaking off a lobe or two every so often as a healthy, palate-cleansing snack. Ketchup never hurt, either. (Don’t worry about the inevitable cauliflower crumble that will wind on the floor. So bland is this food, neither ant nor roach nor rodent has any interest, and it doesn’t smell as it dehydrates and, under foot, gets ground to dust. It will just blow away, most likely into the adjacent carpet, to await the semi-annual vacuuming and permanent residency in the vacuum cleaner bag no one knows how to replace.) _______________ * Oh, the potential tie-ins! ** This may be an opportune moment to share with you the first few paragraphs of the first chapter of my long-awaited work in progress: Chapter 1 – These Recipes Could Kill You Seriously. Nothing in this book has hurt me — but that’s me. None of the recipes in this book, nor the general disregard for hygiene they embrace, has been tested for safety by any private lab or government agency, and I hereby disclaim any responsibility — I mean, ANY responsibility — for stomach cramps, mental disorder, loss of sleep, loss of friends, or even DEATH that could ensue from following any of the advice in this book. I have a pretty strong stomach. You may not be so lucky. Seriously. MUD So we bought the GLDD warrants at 70 cents and 38 cents in the past year or so, and Friday they closed at $3.29, so if you bought 10,000 of them for, say, $6,000, they’re now worth $32,900 on paper. Think of the money you now have available to support the DNC. But wait – I wouldn’t necessarily sell until, at the earliest, your warrants have gone long-term. And with just a 5-cent premium over their intrinsic value Friday (they give you the right to buy GLDD at $5 and GLDD closed at $8.24 Friday), I wouldn’t necessarily sell when they go long-term, either. Anything can happen, of course, and I know nothing, really, about mud, sediment, dredging, or barges. (GLDD is Great Lakes Dredge & Dock, the nation’s oldest, largest company in this field.) But for someone who does want to own the stock, at $8.24, the warrants essentially do two things for that extra nickel: First, they save your having to put up $5 of each $8.24. With nearly two years to run on the warrants, that’s like being able to borrow $5 for two years for just a nickel in interest. Which works out to a rate of about half a percent a year. (The wrinkle – see below – is that if the stock rises much higher, the warrants may not have 2 years to run after all.) Second, if something awful happened and the stock crashed to $2, you’d have lost 100% of your $3.24 . . . but not the full $6.24 drop from $8.24 if you had bought the stock. (Admittedly, one can argue that it’s worse to lose 100% than “only” the 75% or so drop from $8.24 to $2. But not necessarily. In this unlikely scenario, you could then buy the shares at $2, if you wanted to, giving you a total cost for each one of $2 plus the lost $3.24, or $5.24 in all – versus the $8.24 it would have cost you to own the shares buying them outright today.) So the warrants are not overpriced relative to the stock. But how good a value is the stock at today’s price? I have read research reports making the case for significant further gains in the years ahead. One of them argues that the nation’s normal level of dredging activity has been halved because of budget constraints from the Iraq war, and that at some point soon it will need to be restored to traditional levels, which would be very good for GLDD’s sales and profits. But who knows? The company is releasing earnings before the market open Wednesday and you are invited to listen to management’s conference call later that day, at 11am Eastern Time – details are here. If the news Wednesday is discouraging, the stock will drop. If it’s good – but no better than investors were expecting, the stock may also drop. If the news exceeds expectations, the stock could continue to climb. Which raises one last important wrinkle with the warrants – namely that, as described here (see paragraph 6), the company has the right to force conversion of the warrants if the stock hits $8.50 and stays there for 20 consecutive trading days. Which means that, for those not in a position to, or inclined to, pay an additional $5 to own the actual stock and hold it for the long term, it will be advisable to sell the warrants once the stock begins trading at or above $8.50. Which could be as early as this week or as late as . . . never. But when if and when it does begin to trade at $8.50, I’d expect to write about this in more detail. (One advantage of spending the extra money to exercise the warrants if that you could then enjoy whatever future appreciation might remain. But the other is that you would be deferring the tax that would be due if you closed out the position and took your profit.) BOREF I know, I promised. Well, I have posted that tomorrow. Which, because I work very late into the night, you can read today.
Forty-One Years May 4, 2007March 6, 2017 First the bad news: Although my Congressional friend (as described yesterday) ultimately voted for the Hate Crimes bill, earlier in the day was one of just 9 Democrats who voted – along with every Republican – for a procedural measure designed to kill it.But that’s just a footnote to a very wonderful day in which the House passed legislation, 237-180, that, pending Senate and Presidential approval, will extend the existing Hate Crimes statute to include sexual orientation and gender identity. Now you ask, how could 180 Congressfolk – 166 of them Republicans – vote against this? Their two biggest arguments were that: Murder and assault are already illegal. No special provisions are needed to cover hate crimes. (But even if you buy that – and as I argued yesterday, you shouldn’t – what’s the justification for excluding just one group of hate crimes victims from the existing law?) A 101-year-old woman was hit in the face three times by a New York City mugger who had followed her home to steal her purse – yet she, and old people like her, wouldn’t be covered by this law. And what about veterans? Why doesn’t this bill include them? It’s unfair to single out gays and lesbians for special treatment. (But it’s not just gays and lesbians – the existing statute already covers whites and blacks and yellows and browns who may fall victim to hate crimes; and Catholics and Jews and Baptists and Muslims; and Poles and Latinos and Turks and even the French. Not to mention that the 101-year-old woman was attacked her for her money, not because the mugger’s motive was hatred.) Even so, in a particularly dramatic moment, Chairman John Conyers turned to his Republican counterpart and asked if he would accept an amendment extending the statute to cover people over 65 and veterans. And the Republican floor manager would not allow old people and veterans to be added to the bill. I lack the time and skill to bring the proceedings to life. But the contrast was stark: Every Democrat who spoke supported the bill, in many cases eloquently. Every Republican who rose argued against it. Let me end with just this. Forty-one years ago, give or take, two deeply closeted gay men were in the basement grill of an all-male college dorm. One was a senior, determined never, ever to have anyone know he was gay – because it was the worst thing anyone could be. He was perpetually depressed and, though not without friends, completely alone with his secret. The other was a “resident tutor” – a wildly popular assistant professor who compensated for his secret by chomping cigars, swearing like a sailor, and destroying all comers in political debate. And oh, how they came to debate him. They thought themselves pretty smart and funny and cool. But up against this guy, seven or eight years their senior, they stood no chance. They would be at once convulsed with laughter and dazzled by his wit, speed, and breadth of knowledge. They never would have imagined he had crushes on many of them, so gruff and macho was he. Only that senior with the secret could tell, because he had crushes on the same students. One evening in particular, down in that depressing little college grill, with its greasy hot dogs and hamburgers and a lone pinball machine, the student saw how the assistant professor was trading manly arm punches with a couple of the jocks – and it hit him: He (the student) was not the only one in the world who had been wired backwards. This wildly smart, funny, resident tutor shared the same terrible secret. And the great thing about this country – or at least one of the great things, and the one I have experienced most personally – is that with time, things got better. Not all better, to be sure, but a lot better, with further improvement in sight. With each passing year, more and more gays and lesbians felt freer to be themselves and to stand up for their equal rights. And on May 3, 2007, the former assistant professor, Congressman Barney Frank, Chairman of the Financial Services Committee, took the gavel as Acting Speaker of the House of Representatives of the United States of America – an openly gay man – and called for a vote on the hate crimes bill, HR 1592. When time was up and the vote tallied, he announced the results: 180 against, 237 in favor. It was a good day for America. (Little was heard of the student, meanwhile. Rumor has it he went on to live a happy life and can be sighted from time to time on airport tarmacs, watching jets being towed to and from their gates, dreaming great thoughts.) Monday: More o’ Borealis
A Boy Named Sue How Will the Congressman Vote? May 3, 2007March 6, 2017 FOR FATHER’S DAY Have you seen the promo for the new Steven Wright DVD? (You know Steven Wright; the gloomy deadpan guy? As in, for example: ‘Borrow money from pessimists – they don’t expect it back.’) He makes fun of everything. (‘All those who believe in psychokinesis, raise my hand.’) The promo clip I saw: ‘I think it’s wrong that only one company makes the game Monopoly.’ FOR JOHNNY HAS TWO MOTHERS DAY I’m not saying your Mom has no sense of humor; just that – at the risk of sounding old fashioned or sexist – I think you need to consider getting her something nicer than a comedy DVD. In the meantime, for the boy who has two moms, there is the continuing question of what we are to think – and the extent to which we are comfortable restricting the rights of others based on what we think. For example, it’s one thing to think inter-racial couples should not marry; another thing to forbid them to. One reason the country is making steady progress toward acceptance of its gay and lesbian children is simply that they’re getting to know them. (Is it even notable any more that Ellen Degeneres is gay? She’s just as widely beloved as any other celebrity in America, isn’t she? And considered more wholesome than many of them?) So if you have 12 minutes to meet some really nice people, both straight and gay, here they are. The focus is on what happened in Wisconsin – where the people voted down the right of their fellow citizens to marry – and what may happen in Massachusetts, where same-sex marriage is legal, and supported by the Governor and nearly three-quarters of the legislature . . . but where there’s a risk it will be outlawed by referendum. The clip speaks for itself, and appeals to the angels of our better nature. FOR JOHNNY’S DAD IS A MOMMY DAY The House may vote today on extending hate crimes legislation to include sexual orientation and gender identity. I know some of you believe there should be no hate crimes laws at all.* But that’s not today’s question. Today’s question is, since there already ARE hate crimes laws on the books, should one much-hated group – queers – be excluded from them? * The conservative position is that all crime is hateful, regardless of motive. And that – while distinctions should be made based on intent (first degree murder, second degree murder, manslaughter, and so on) – dragging a randomly selected black man on a chain behind a pickup truck until his head falls off, just because he was black (or for blacks to do the same to a white guy, just because he was white), does not fall into a category of crimes that threaten our diverse society more than any other. I disagree. The other reason special legislation is needed is that, sometimes, law enforcement in a given locality shares the same bigotry that led to the crime in the first place. In those cases, the law provides added resources to encourage the pursuit of justice. It would be odd to protect all religions except, say, Catholics; odd to protect all races except, say, Asians; odd to protect all ethnicities except, say, Poles. And so it seems odd to exclude one of the most hated and frequently assaulted groups of all – queers. (Many young gays and lesbians actually prefer that word; I never use it. But in the context of hate crimes, it does seem to have a place in the discussion.) Anyhow, as you would expect, most Democrats favor expanding the hate crimes protections to cover the LGBT community; many Republicans do not. Today’s outcome may revolve around procedural maneuvering over ‘gender identity.’ That is, can the bill be passed (or scuttled) by excluding from its protection the most hated and threatened group of all – the effeminate boy or masculine girl. One Democratic Congressman I know pretty well, who comes from a district far from New York or San Francisco, was wrestling with this issue last night. ‘Gender identity,’ he told me, was not a term the voters in his district knew . . . or would be comfortable with if they did. Come the fall of 2008, he could get beat up pretty bad, he feared, if he voted to include these protections. I don’t know how he will come down on it. Today will be an interesting day. My pitch was that – apart from it’s being the right thing – and the thing, certainly, Jesus would have done (can you imagine His saying ‘Blessed are the meek, except the sissies, whom you may judge without fear of being judged yourself, and beat up, because you are stronger than they are’?) – apart from all that, if his opponent did attack him for this, he might just be able to make it work to his advantage. As in: Well, you know, I’m a pretty square, straight, white guy. I had never even heard of ‘gender identity.’ But what it’s basically about is boys getting beat up or killed because they’re effeminate, and girls getting attacked or killed because they’re not feminine enough. Nobody’s for that, unless there’s a lot of hate in their hearts — and I know first hand there’s not a lot of hate in the hearts of my constituents. I’m kind of shocked that my opponent takes the sides of the bullies in this. Well, if that’s his best credential to represent you in Congress, so be it. But now let’s talk about jobs and why the Republicans have us paying so much more for prescription drugs than we should. The other thing I relayed to him was the story of my fellow high school alum (a dozen years ahead of me), Renee Richards. As it happens, she was profiled on CBS Sunday Morning just days ago, so her story is fresh in mind: Princeton tennis champ, military man, married, a dad . . . sex change operation, ranked 20th in the world on the women’s tennis circuit, highly respected eye surgeon (operating on a patient even as we speak) – and still much loved by her son. Is hers a typical story? Hardly. Is it likely to make people uncomfortable at first? Sure. But the few transgendered folks I’ve gotten to know a little have more courage and personal dignity than just about anybody. And, in any event, this is America. I hope my Congressman friend votes the right way.
Road Trip! May 2, 2007March 6, 2017 Yesterday’s comment was a bit grim, so – for balance: NUNSENSE, IS ‘HABIT’ FORMING . . . . . . that’s what people say / We’re here to say that nuns are fun / Perhaps a bit risqué! / Dum-dum-dum da dum-dum-dum / Dee dum-dum dum da dum . . . I’ve made just so much money on this effervescent PLAY! It all started 25 years ago with some ‘nun’ greeting cards . . . and then a $5-a-seat production of a musical someone took me to see about a nun talent show (to raise money to bury the 52 sisters accidentally poisoned by the bum vichyssoise – but you see? Already, I’m getting sucked into the story line) . . . and then the off-Broadway production in which, by some miracle, I got to make an investment . . . and then spin-offs (Nunsense II: The Second Coming, ‘funnier than ever,’ affirmed the Indianapolis News; Nunsense Jamboree, ‘still holds up its end of the bargain,’ chuckled the Moline Dispatch; Nuncrackers, ‘the perfect antidote to A Christmas Carol,’ pronounced the New York Times; Meshuggah-Nuns, ‘knee-deep in shtick,’ kvelled American Jewish World; Nunsensations, ‘hits the jackpot!’ raved the Minneapolis Star Tribune; and, of course, Nunsense A-men, with its all-male cast – ‘a genuine blessing,’ swooned the Times) . . . . . . and now, my friends, right up there with Dollywood and the Alamo for the list of attractions on your summer road trip, there’s the All-Nunsense Theater opening May 11 in Martinez, California . . . non-stop Nunsense, and even a small museum. Click here for a little song and dance.
May Day May 1, 2007March 6, 2017 As in: ‘This is Mother Earth. May Day! May Day!’ I finished listening to Atlas Shrugged – a brisk 160-mile walk – with the modern world basically destroyed by the end, thanks to the taxers, the do-gooders, and the regulators (but primed for resurrection in a zero-tax world of heroic industrialists, the three best looking of whom are all desperately in love with heroine Dagny Taggart) . . . and now I’ve begin reading Collapse, a 50-mile walk, give or take, but which already, after just the chapters on Montana and Easter Island, has the modern world headed for catastrophe, thanks to those who would not tax, do good, or regulate. I felt no threat from the bogeymen of Atlas Shrugged. It’s a great story, but I think we hardly have to worry about the dangers Ayn Rand foresaw. Collapse, on the other hand – at least based on what I’ve read so far – should be must reading for every passenger of Spaceship Earth. What do we do if the bees go? What do we do if the fish go? What do we do if the climate goes? What do we do is the soil goes? Where do we go if we poison our space ship? If these things strike you as far-fetched, you’re not paying attention. A lot of people used to live on Easter Island – but eventually they started eating each other. (Or maybe that was Pitcairn Island; with the book on my iPod, it’s hard to go back and check.) Montana is a lot bigger than Easter Island, but you will be surprised, or at least I was, to learn of its problems. And the planet is a lot bigger than Montana. But in even the short time I’ve been alive, we’ve considerably more than doubled the population of our species, adding 4 billion consumers/polluters (and, if push came to shove, cannibals/meals). Technology could be our deus ex machina (Deus Himself seems too pissed off to rescue us) – a Silicon Valley mega-hot-shot I spoke with over the weekend tells me it will be cheaper to put solar panels on California roofs ten years from now than it is to buy electricity from the grid today – and yet technology also gives us the potential for nuclear contamination and all manner of non-nuclear unintended consequences. We invent DDT to keep pests from destroying our crops, but that leads to worse problems . . . Anyway: read Collapse. (To go back to our only very recent awakening to all this, read Silent Spring. ‘We spray our elms; and the following springs are silent of robins’ songs. Not because we sprayed the robins directly, but because the poison traveled, step by step, through the now familiar elm leaf, earth worm, robin cycle. . .’) And just for fun, while you’re in the mood for eco-horror flicks, take a moment to read George Will’s recent breezy column (thanks, Peter!), based on Timothy Egan’s ‘astonishing and moving’ The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl. Consider it a sort of teaser to Collapse . . . a taste of the catastrophes that are possible when we meddle with Mother Nature: On May 10, 1934, a collection of dust storms moved over the Midwest carrying, Egan says, “three tons of dust for every American alive.” It dumped 6,000 tons on Chicago that night. By morning, the storm was 1,800 miles wide — “a great rectangle of dust” weighing 350 million tons — and was depositing the surface of the Great Plains on New York City, where commerce stopped in the semi-darkness. . . . ☞ More than a little Easter Islandish, as you will see.
Randy and George April 30, 2007January 8, 2017 RANDY TOBIAS Randy indeed – but why not? Whose business is it if a guy calls an escort service? In America, shouldn’t adults be entitled to liberty and the pursuit of happiness without government supervision? Or invasion of their privacy? According to press reports, the college-educated women that the former Eli Lilly CEO engaged ranged in age from 23 to 55. Hardly children in need of protection. One can eschew such behavior oneself without believing that the government need step in and legislate morality. What is ‘conservative’ and ‘small government’ about that? And leaving aside the legality (because if nothing the government deems illegal happened, as both Tobias and the escort service assert, then it was not illegal), isn’t it amazing that Republicans resign over things like this but not, say, in protest over misleading the country into war? Or over disastrous incompetence in the prosecution thereof? I’ve never met Mr. Tobias (who also helmed AT&T International and chaired the board of Duke before joining the Bush Administration). He is no relation. By all accounts, he is a talented executive, and, according to a mutual acquaintance, a nice guy. He shouldn’t have resigned over this; but then again, I wish he hadn’t been appointed in the first place. As AIDS czar, his approach was to ‘protect’ HIV-positive Africans from cheap (and, he apparently felt, insufficiently tested) generic drugs . . . and – on moral grounds – to impede the sex education and condom use that would have saved a lot of lives. GEORGE TENET And speaking of focusing on all the wrong things, Presidential Medal of Freedom recipient George Tenet is back in the news with his new book, reminding us that – as so many of us have long known – Iraq had nothing to do with 9/11. The agenda of the very first National Security Council meeting, long before 9/11 and just days after Bush’s Inauguration, was all about Iraq. Bin Laden – whom the President- and Vice President-elect, and Ms. Rice, were told days before the Inauguration represented a ‘tremendous’ and ‘immediate’ threat to the United States – was ignored. The Presidential Medal of Freedom is the Nation’s highest civil award. . . . It is awarded by the President of the United States to persons who have made especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors. ☞ As forceful as Tenet was on ’60 Minutes’ last night, and as easy as it is to criticize in hindsight, one is struck by his failure in the summer of 2001 to tell the President every morning at their daily briefing – or even once! – of the need to take immediate action to avert the spectacular attacks he urgently warned Condoleezza Rice about (and which she again ignored). Not only that, one wonders what medal he would have deserved if he had somehow managed to persuade the President not to invade Iraq. Or at least not to have done so without first planning for the aftermath. WHITHER INTEREST RATES A month ago, I opined that, to deal with an increasingly scary housing market, the Fed would be lowering interest rates. (Not, like, necessarily, right then, but in the foreseeable future.) Had I been on my toes, I would have included this link to buttress my case (thanks, Stephen Willey). It’s a sophisticated yet engaging overview of the housing situation (and “the Plankton Theory”) for those with an extra ten minutes this morning.
Really Good April 27, 2007March 6, 2017 REALLY GOOD CANDIDATES Did you watch the debate? I am enthusiastically neutral among all our fine Democratic candidates. GIVE TO THE DNC, OR I’LL SHOOT YOUR DOG If you want to help widen our lead in Congress and win back the White House, click here. REALLY GOOD INVESTMENT ADVICE From Saturday Night Live – click here: ‘Don’t Buy Stuff You Can’t Afford.’ That would include shares of First Marblehead, if you can’t afford the risk: FMD You could listen to last evening’s earnings call, or you could just read my guru’s summary: Third quarter net income of $71 million and income per diluted share of $.75, which included a negative adjustment of 11 cents/diluted share due to changes in some of the underlying assumptions re: the value of their service receivables (residual value of their securitizations), were up 20% and 21% respectively year over year. And for the first three quarters of the fiscal year, net income and diluted income per share are up 78% and 81% respectively year over year. The variance in the magnitude of the quarterly vs. YTD growth rates is largely a function of timing refinements in their quarterly securitization calendar. I would expect 4th quarter income growth to normalize in the 30-40% range. The residual markdown (based on a combination of a slight increase in the anticipated prepayment rate and a slight improvement in the discount rate) was relatively minor, but nevertheless a surprise which may open the door for some of the naysayers to naysay a bit. In the grand scheme of things it should be considered a minor distraction. Without it, FMD would have exceeded very high earnings expectations by 2-3 cents/share. With this change in performance assumptions, there is also some potential for future securitization margins to be dinged by a few percentage points, but with the gross margins and absolute growth rates in this business, it hardly makes a difference. A red herring. Management spent some time discussing client concentration, pointing out that JPM and BofA have gone from 65% of their bookings two years ago, to 44% today. They also said that they expected this diversification trend to continue. They briefly touched on the SLM private equity deal…only to repeat that SLM, JPM, BofA and FMD are all on record saying that they see no changes in current business relationships in the near to medium term. Another point of discussion was the shareholder friendly dividend and share repurchase programs. At the end of the quarter, FMD had $290 million in cash available to be deployed against these two initiatives (and no debt). CEO Kopniskey reminded all on the call that FMD had raised their cash dividend by at least 20% sequentially in each of the last three quarters. He also reminded listeners that the board had recently approved a 10 million share buyback (90 million shares outstanding). In summary, the fundamental growth and performance story is still very much intact. Client concentration is being methodically mitigated, conservative changes in residual valuation assumptions provide an even larger margin of safety against any future underperformance, and shareholder friendly dividend increases and share buybacks have demonstrated traction. In my view, FMD remains a compelling longterm buy — especially at these prices. ☞ I hope he’s right, as I own a whole bunch of this. But there are no sure things in the stock market.