She Also Pioneered VLSI* July 16, 2013July 15, 2013 Yesterday, two brave women — one just 16, the other a former battle-scarred Navy SEAL — both speaking out, in different ways, for individual dignity and the freedom to pursue one’s own happiness. Today, Lynn Conway’s story. No Navy SEAL she — all she did, before being fired by IBM in 1968 for being transgender (she was born Robert), was invent “dynamic instruction scheduling,” an underpinning of supercomputing. That story is updated briefly here, as she and her husband walked into the White House last month to celebrate LGBT Pride with the President of the United States. Is this a great country, or what? *Very Large Scale Integrated Circuits. Lynn was “the hidden-hand behind the VLSI microelectronics revolution in Silicon Valley — a revolution that’s changed the world forever.” Read her whole story here. Meanwhile, eQualityGiving founder Juan Jover — formerly of Bell Labs — writes: “As a former participant in the computer chip industry, I can tell you that all of us who built computer chips for the last 30-plus years did it using the new methods created in Lynn Conway’s1980 textbook (I am holding a copy signed by her as I write this). The revolution of packing so much computer power in smaller devices (like smartphones) is all due to computer chips that use Lynn’s methods. Frankly, it is difficult to overemphasize Lynn’s contribution. But this is not all, after MIT, Robert Lynn worked for IBM, where he made contributions so ahead of its time they could not be implemented for decades. After being fired for her gender identity, and transitioning to Lynn, she had to re-start her career from scratch for fear of being found out. Linking this to ENDA: How much did Lynn’s firing, and her not creating her computer chips design revolution there, cost IBM’s shareholders? Had VLSI design revolution been proprietary to them, they would have killed Intel, among others. [By the way], Lynn has perhaps the most influential website on transgender issues, lynnconway.com. It is translated into 20 languages, providing role models about successful transitions across the world.”
Two Brave Women July 15, 2013July 14, 2013 MALALA Did you get to watch Malala’s speech to the UN last week? If you don’t have 17 minutes — or somehow don’t know who this astonishing 16-year-oild girl is (oh! the one shot in the head by the Taliban for demanding that girls be allowed to go to school!) — here’s the story. And here’s the transcript. . . . I remember that there was a boy in our school who was asked by a journalist, “Why are the Taliban against education?” He answered very simply. By pointing to his book he said, “A Talib doesn’t know what is written inside this book.” They think that God is a tiny, little conservative being who would send girls to the hell just because of going to school. The terrorists are misusing the name of Islam and Pashtun society for their own personal benefits. Pakistan is peace-loving democratic country. Pashtuns want education for their daughters and sons. And Islam is a religion of peace, humanity and brotherhood. Islam says that it is not only each child’s right to get education, rather it is their duty and responsibility. . . . Who says there’s no hope for the future in the Muslim world? “One child, one teacher, one pen and one book can change the world.” KRIS I don’t want to take more than 17 minutes of your day — or even the three minutes it would take you to read the transcript. So today’s post may be tomorrow’s post as well. (Summertime . . . and the living is laaaaaaazy.) But I spent the weekend with a former Navy SEAL who served for 20 years, deployed 13 times, awarded a Purple Heart and Bronze Star — a completely amazing woman! She was Chris — a man — at the time (much of it with a giant beard to blend in with the locals), but always knew she was a woman trapped inside a man’s body. It sounds weird, condensed like that, but when you read the full story, as I did Saturday — and understand that perhaps a million of your countrymen-and-women are faced with similar gender dysphoria — you find yourself pleased but not at all surprised when his boss and mentor, former SEAL and astronaut (commander of Expedition 1, the first crew on the International Space Station), Bill Shepard, reacted as he did when Chris broke the news he was now Kris: “You know I’ve been depressed and struggling with PTSD for a while now and I have some other issues as well,” Chris said and after a brief hesitation he spit it out, “I also have a gender identity disorder.” Shep paused in silence and then answered, “Chris, you know I love you like a son! With all you’ve done for our country, your dozens of tours and all you’ve done for me, you do whatever you need to.” “Okay, thanks boss!” Chris answered, his voice breaking with emotion. “Listen Chris, why don’t you come in later this afternoon and we can talk things over,” Shep suggested. “Uh, Shep,” Chris answered, hesitating a few seconds, “I can come in, but I’m wearing a dress.” “I don’t care if you were wearing a clown suit! I care what’s inside.” Later that day, Shep smiled seeing Chris in a very demure yet elegant dress when they met outside the restaurant. “Chris you look really good. You look happy!” Shep exclaimed. And pulling open the door Shep added with a half smile, “Ladies first!” The emails from fellow SEALs are equally great. E.g.: “Brother, I am with you… Being a SEAL is hard. This looks harder. Peace.” It’s a very short book . . . (inexplicably, un-copyedited) . . . and a very brave woman . . . and heart-warming (if you ask me): at the end of the day, we’re all just doing our best. Or most of us are, anyway. Chris/Kris certainly has been. And we’re all in this together.
Superhydrophobia (expialidocious) July 12, 2013July 12, 2013 BRAVE NEW WORLD – Pt 56 This stuff. Spray it on and you’re a duck’s back. Is it time to short umbrella makers? Shower with your smart phone? BRING BACK GLASS-STEAGALL I signed up with John McCain and Elizabeth Warren . . . here. WELCOME Jacob: “Agribusiness pork = yes. Food assistance to poor Americans = no. I have been meaning to switch party affiliations for a while, and this was the last straw. I’m now a registered Democrat.” AND SPEAKING OF DEMOCRATS Here’s one I love, Congresswoman Tammy Duckworth. Watch her shame a phony disabled vet sucking off the teat of the government. She does not mention it, but I checked him out on Opensecrets.org. Sure enough: judging from the $2,500 he gave Mitt Romney, he’s a Republican. I mean — really? You’ve got to watch. Have a great weekend.
NLRB / SIGA / BOREF July 11, 2013 In listing the various Republican wars-on yesterday I forgot the war on labor. The National Labor Relations Board has been effectively shut down for eighteen months. Oh — and the war on consumers. The Republicans refuse to confirm anyone to head the Consumer Financial Protection Bureau. SIGA If you own SIGA, this may be of interest: a fanciful letter to Vice Chancellor Parsons — fanciful in the sense that he probably will never see it — that helps lay out the issues in the case. Our hope is that the stock is undervalued even if the new award is no less onerous than the first one Delaware’s Supreme Court rejected. But, oh, how nice it would be if the writer, our own Glenn Hudson, has it right. BOREF I ended my last post: As always: naysayer comments welcome. If I’m missing something here, I’d be eager to know what it is. One of the smartest investors I know responded: “There is almost zero chance this management can/will do what they’ve said they can do. Why have folks put $8 million into private placements of WheelTug stock at a $600 million valuation? Whoever did that believed in the technology, obviously. But companies with no future raise that kind of money every day of the year. . . . Meanwhile, If I came to you and promised to revolutionize one industry, you would evaluate my project on the merits and would consider investing in it. If I came to you and promised to revolutionize four industries, but had been in business a couple of decades and had only $36 million in cumulative losses to show for it, you would quickly conclude that I had a long track record of over-promising and under-delivering.” They are the world leaders in grandiose projections. No question. Yet against tremendous skepticism they did actually “deliver” a nose wheel motor that ran a commercial jet around the Prague airport — even in slippery conditions when it started to snow — as if it were a golf cart. No one else in the world has been able to do that. And they have forged partnerships with serious, established companies, both on the airline side and on the “production” side. My scary smart friend may prove right; but he has thus far not persuaded me there isn’t a tremendous opportunity for some company here. Or that — astonishingly — Borealis won’t prove to be that company.
Game Is To 11 July 10, 2013July 10, 2013 PING PONG, ANYONE? Here. There goes Wednesday. (It’s not that there’s nothing going on. There’s the Republican war on women, the Republican war on immigrants — did you see Rachel last night? — the Republican war on voting rights, the Republican war on the poor, the Republican war on the environment, and the actual wars, including the war on terror, largely overseen in secret by the FISA Court, all of whose secret judges have been and will be appointed by Chief Justice John Roberts, in secret, as long as he shall live. So there’s lots to talk about. But not today.)
Buyer Not Seller July 9, 2013July 8, 2013 I fell asleep writing yesterday’s column. When my head went thunk on the keyboard, it must have hit PUBLISH . . . so I never really got to the point. Here’s where we left off: The latest Borealis weekly investor email links to the huge Borealis prospectus issued in connection with the stock’s listing on the Prague Exchange (to date, no shares have traded) and notes that grand-sub WheelTug (sub of Chorus Motors, sub of Borealis) is upping the price of shares it is selling privately — from the most recent offering price of $90 to a hoped-for $180. The 2013 Borealis annual report shows “profit from sales in subsidiary companies” at nearly $8.5 million. The point is that Borealis owns 65% of WheelTug. And WheelTug — at $90 a share with a little over 7 million shares outstanding — is being valued at more than $600 million. Thus one might conclude that Borealis’s 65% stake in WheelTug is currently worth more than $400 million (65% of more than $600 million). And one might divide that $400 million by Borealis’s 5 million shares outstanding to come up with $80 worth of WheelTug for each Borealis share. Which is one reason buying Borealis shares for $11 as you could yesterday — or even for $15 or $20 or perhaps $30 or $40 — strikes me as a sensible speculation. Not least because Borealis may have value beyond WheelTug. As has been noted before, if its patented electric motor technology can move a jumbo jet, perhaps it may have some application in automobiles, forklifts, elevators, golf carts, or who knows what? And if this scoffed-at Borealis technology proves valuable at long last as now seems at least a bit less fanciful, perhaps one or more of its other scoffed-at technologies and subsidiaries (like Cool Chips and Power Chips) has value. (Even, someday, its claimed mineral wealth.) Of course, there’s no guarantee WheelTug is worth the $600 million valuation that some investors have accepted, let alone the new $1.2 billion offering price for new shares ($180 a share). But it’s still encouraging that some people must think so. Indeed, they must think it’s worth more than $600 million, or else why tie up $8.5 million in illiquid, non-public shares? I keep annoying you with this because (a) those of you who have joined me as long-suffering shareholders over the past 14 years need encouragement (keep hope alive! keep hope alive!); and because (b) those of you who have not yet jumped in might still wish to — though only with money you can truly afford to lose. (If you do decide to jump in, be sure to use limit orders. The stock is very thinly traded. A “market” order basically says, “I’ll pay anything you want to charge me.” A “limit” order says, “I’ll pay anything up to a limit of $11 a share.” Or $12. Or whatever price you set.) There remains the real chance we will lose all our money . . . though I become increasingly hard-pressed to see quite how Borealis shares would come to have zero value. At the current $55 million valuation, it is considered only one-fifth as valuable as Cezanne’s “The Cardplayers.” A lovely painting; but can “The Cardplayers” make the global airline industry significantly more efficient, as just one of the Borealis subsidiaries shows promise of being able to do? As always: naysayer comments welcome. If I’m missing something here, I’d be eager to know what it is. Thunk.
Summer Fun July 8, 2013July 8, 2013 THE CONSERVATION OF MATTER Time flies when you’re not too tidy. I decided to wash the living room cushions — you just unzip them all, take off the covers, wash and allow to dry in the sun, then shove back the foam rubber, rezip. Repeat every 25 years. It really makes a difference. Not ever having done this before, it seemed appropriate to vacuum the innards of the furniture on which the cushions sit. In doing so, we discovered — “oh, look at this!” — a cell phone some guest must have lost here in summers past. Well, it had to be somewhere. Things don’t just vanish. They can burn (converting matter to energy), but, as Lavoisier discovered, there are laws about such things. (Have you looked under the bed? Behind the dresser?) BUYER AND CELLAR I’m having so much fun with this. I even got to write my own blurb for the Playbill. Limited to 120 words, I used just 13 (but touched on investing, religion, and politics). There are still discount tickets many days at TKTS, but as the house continues to build, they grow scarcer: “Irresistible . . . delicious . . . wickedly funny” — the New York Times “Hilarious! Michael Urie is masterful.” — New York Magazine “Fantastically funny” — the New York Post “A fantasy so delightful you wish it were true.” — the New Yorker “Spectacular. Beyond brilliant. This show will go down like butta’!” –Entertainment Weekly When the New York Times and the New York Post — and the New Yorker and Entertainment Weekly — all agree, it’s probably a good time. See it! BUYER NOT SELLER The latest Borealis weekly investor email links to the huge Borealis prospectus issued in connection with the stock’s listing on the Prague Exchange (to date, no shares have traded) and notes that grand-sub WheelTug (sub of Chorus Motors, sub of Borealis) is upping the price of shares it is selling privately — from the most recent offering price of $90 to a hoped-for $180. The 2013 Borealis annual report shows “profit from sales in subsidiary companies” at nearly $8.5 million.
Violence as a Disease July 5, 2013 But first, briefly . . . CLOSE SHAVE Tom Anthony: “Sharpening Your Disposable Razor – YouTube . . . Just 10 strokes on your blue jeans for stropping; a few strokes on a polishing compound board for sharpening. You should strop 100X more than you sharpen because dull blades are overwhelmingly the result of bent edge sections and not from an unsharpened edge.” ☞ Even cheaper, which is to say free (if you have a pair of jeans), than that strop I linked to a while back. MORE FREE MUSIC Peter: “You may want to add mog.com to the list of music streaming services mentioned. it is similar to Spotify, in that you can select the specific songs you want to listen to, as opposed to the ‘radio-like” services. they also have a free option available. One of Mog’s claims to fame is that they have the best audio quality of any of the services (320kbs for everything). Not sure if anyone else has caught up yet. I’ve been using their paid (ad-free) service without any problem for some time now.” VIOLENCE The item after this one is today’s headliner — violence as a disease. But while we’re on the topic (and while we’re waiting for Congress to pass common sense background checks and other safety measures overwhelmingly supported by their constituents, including most NRA members), I wanted to share this email that came in from a friend over the weekend: “I was at Quantico Thursday evening,” he writes. “A friend got promoted to Brigadier General — his first star — and the Commandant pinned it on. There were probably 70 or so high ranking officers at the reception. I have been around Marines and wars for many years. What really struck me as I watched the room, was the pain. We have been in combat since 2001 and one of the guys I spoke with had five combat tours. These Marines are the very best — the senior leaders, all in perfect physical condition, uniforms immaculate with incredible ribbons of gallantry. But every single one had pain, deep, deep pain in their eyes. It was just us, so the walls were all down and as the evening went on I talked with a number of my friends. It comes down to killing. They had all killed too much and they had buried too many of their own. In some ways it was good to see — that they retained their humanity and the pain hurts. If it did not, they would have been like the Nazis or the Serbs I knew in Sarajevo — who had no pain — or soul — in their eyes. I felt honored to be in the room with such warriors, but I was also intensely angry at Bush, Cheney and Rumsfeld. I do not see the same pain — or any pain — in their eyes. So they send the best we have in our military off and these guys hurt bad when they do their duty and come home, but the ones who send them — they do water colors. Sorry — venting.” ☞ I asked permission to post that — we’re partners in a social business venture — and he replied, “There is a public side and a private side to the Marines and it is appropriate that in the quiet times we grieve and hurt, which we do not share to the public. But, the public should know. And while we hurt when one of our own dies, we spend much more time and reflection over the ones we killed and that is what we discuss privately. I spoke to a young staff sergeant recently and in the space of a ten-minute conversation, he repeated three times that he had killed three boys, but that he was okay. He was so not okay and I tried to tell him that his anguish was not something he should try to gloss over. I had two of my classmates killed from my CIA class and two of my Marine OCS classmates killed as well. I infrequently think of them — daily I think of the others. I know I am not okay, which in some way kind of makes me able to deal with all of the memories and failures at not being able to avoid or prevent the deaths.” ☞ “Thank you for your service” seems hardly adequate. And now, finally . . . VIOLENCE AS A DISEASE TED Talks are billed as “ideas worth spreading.” This one sure is. It’s terrific on at least three levels: its results, its rationality, and its replicability. Uplifting! I hope you’re enjoying an extended July 4th weekend. We celebrate a country that, for all its missteps, carries the imperative to expose those missteps (not ignore them with mindless patriotism) and the capacity and generosity of spirit to make progress toward a more perfect union. Drive safely! Wear sun screen!
You WILL Walk Again July 3, 2013March 28, 2017 It’s unfortunate that President Bush, by leaning against the promise of stem cell research for eight years, likely ceded this breakthrough to our friends in Hong Kong (thanks again, Ralph Nader, and all the rest of you uncompromising idealists*) . . . but if you or someone you love might someday be paralyzed from a spinal cord injury, you won’t care where the cure comes from. You will walk again! JFK ON SECRECY AND THE PRESS As President Obama calls for a national discussion on the balance between privacy and security, these words from President Kennedy resonate. Not that I think President Kennedy would likely have made choices much different from those President Obama has made. (And boy would he be dismayed by the dumbing down of the traditional news media.) But they help inform the discussion. COOKING LIKE A GUY™ Bob Redpath: “You wrote, ‘As soon as I can figure out a manly way to make a souffle.’ I think it’s called scrambled eggs — in a mug in the microwave.” ☞ Good point. READING THE TIMES TOMORROW If I know my New York Times, we will find a replica of the Declaration of Independence on tomorrow’s back page. What better way to start the day? And to reflect on the millions who sacrificed so much to give us our lives, liberty, and freedom to pursue happiness — to be ourselves. One such person is this former Navy Seal, who fought for her country and pursued her own happiness, as recounted in her just published Warrior Princess: A U.S. Navy SEAL’s Journey to Coming out Transgender. *I’m awful. I just won’t let it go. But for a reason! I think it is a message we liberals (and pragmatic idealists) must constantly refresh — “don’t let the perfect be the enemy of the good” — because it applies in almost any political situation and always will. Strive for the perfect, for sure; but make the practical compromises required for progress. Otherwise, all you get is self-righteous victimhood — and, when the stakes are as high as they were in 2000, calamity.
Who Is SELLING Borealis? July 2, 2013 SIGA Jim Leff: “Per yesterday’s post . . . at this point, I’m neither ‘very confident’ [like Mr. Hudson] nor ‘very hopeful’ [like you] about the lawsuit. I certainly know what ‘should’ happen, and Glenn Hudson outlined some of that in his Seeking Alpha article. But the Delaware Supreme Court surprised me by making new law in their ruling, and the case has returned to the hands of a judge who already made one outrageous ruling. So the end result is anything but clear. Anyone who’s in SIGA to wager on this legal outcome is taking a speculative bet when a smart one lies just beyond it. Even if the baby were to remain split 50/50, half a gold mine is still a fantastic outcome. I’m both confident and hopeful that we’ll win either way. What I can’t tell you is the timing. I retain my near-Borealis level of patience.” ☞ Ah, well, I’ll get to Borealis in a second, but a bit more on SIGA. One big thing I don’t know is the value of what else the company has in development. But its entire market cap is currently just $150 million, and my own sense of these things is that this is too low. So I happily sit on a lot of this stock with money I can truly afford to lose . . . even as, with money I am all but itching to lose (not much, but some), I yesterday bought December $4 calls at 30 cents each. Which means I’ll probably lose my 30 cents. At the same time, I did something normally insane: I sold some December $3 puts. Someone paid me 55 cents each for the right to “put” SIGA shares to me at $3 any time between now and December 21. If the stock is $3 or above in six months, I get to keep that 55 cents; otherwise, I wind up owning yet more shares at a net cost of $2.45 each — the $3 I will have to pay less the 55 cents I’ve already received. There are limits to how much SIGA I want to own, even at a price as cheap as $2.45. But I haven’t reached those limits, and I just couldn’t resist. Please take me seriously when I say that normal, healthy investors are best advised simply to own some of the common shares and leave it at that. Options trading — let alone “naked” options trading — can wreck lives. BOREF I bought a bit more after the Paris air show, when it turned out Honeywell/Safran had not signed up any airline customers after all, as they hinted they would announce they had . . . and when I read of some potential disadvantages of their system. I paid about $10.50 for the shares . . . and as I did I wondered — as I basically have for a decade — who is selling? People do die, so their estates could understandably be selling shares when they do. And I have one friend who forgot to pay his taxes and had his brokerage account “garnished” (with a radish cut in the shape of a rose?) which led his broker to sell 231 shares without even asking. But surely death and taxes can’t account for most of the daily volume in Borealis, modest though it is. Presumably, most of the people who own the shares have some clue as to the speculative nature of the holding (or why would they have bought in the first place?) . . . why would they be getting out now? One theory is that most of those shareholders aren’t selling — that short-sellers are. Not your garden variety, “oh, I think this is a dog, I’ll short some,” short-sellers — why would anyone expose themselves to the risk? — but, rather, market makers who, the theory goes, don’t even know which specific stocks they’re shorting . . . and don’t bother to “borrow” the shares before they sell them . . . they just meet demand for hundreds of different dodgy little stocks by selling the shares without owning or borrowing them (“naked” short-selling), as orchestrated automatically by some computer algorithm premised on back-tested data that shows that, over time, most of the companies they’re shorting will just disappear. As so many dodgy little companies do. It sounds risky (and, if they hold their naked short positions overnight, let alone for years, illegal). But it’s not as though insane (and possibly criminal) things don’t sometimes happen on Wall Street when the temptation is there. Packaging sub-prime mortgages into triple-A rated collateralized mortgage obligations springs to mind. If this is what’s happening — computer-generated short-selling of dodgy little companies — then the market makers get use of the cash they are paid for shares they don’t own; and if once in a while they get hammered (losing $20 bucks each on 100,000 shares, say) — well, what’s the occasional $2 million loss to a big market maker who’s got the odds right? There’s a site called buyins.net that tracks stuff like this, for a fee, and I was sorely tempted to pay that fee to see what they’d come up with on BOREF. But, on reflection, why bother? WheelTug will eventually either be very valuable or not. In the meantime, if naked short-selling is keeping the price of the stock artificially low, that’s good for the buyers. And, for the foreseeable future, I’m a buyer.