Author: A.T.

Two Potentially Undervalued Stocks

But first . . .

PITCHFORKS FOLLOW UP

The Patriotic Millionaires‘ new book, Pay the People! Why Fair Pay Is Great For Business And For America, has been chosen by Malcom Gladwell and the Next Big Idea Book Club for their December must-read list. Nick Kristof is touting it as well.

It begins:

Seventy-one percent of Americans think the economy is rigged against them. We have news for them: they are right. Over decades, politicians of both parties coddled the political donor class, screwed working people, and broke the social contract by passing laws that structured the economy in such a way that the wealth created by millions of working people was driven into the hands of a tiny number of very rich people.  In 1973, the top 1% took home 9% of the income in the country. In 2023, the top 1% took home 26.5% of the country’s income. One researcher estimated that since 1981, as much as $50 trillion has moved from the bottom 90% to the top 1%. What happened in the United States is pretty simple. As Americans worked harder and the economy grew, working people stopped getting their fair share and the richest among us made out like bandits. They did it with the help of expensive lobbyists and enabling politicians, and they destabilized the entire country in the process.

And now . . .

ILLIQUID STOCKS

BKUT jumped 29% yesterday morning, from $520 to $673, on volume of — are you ready for this? — 2 shares.

We don’t own any.

But we do own BKUTK, its non-voting twin, suggested in this 2012 post and re-suggested in March . . . for two reasons:

> At 7 times earnings and less than half book value, it seems ridiculously cheap.

> Our non-voting shares — though otherwise identical — generally sell at a nutty discount to the voting shares.  Yesterday, they were $475 bid, $510 asked.  So you could have paid $510 — or $673 for the exact same thing, minus the right to vote.

If your goal were to gain control of the bank, the voting shares are all you’d care about.  But that’s not likely your goal, and the $18.50 annual dividend is the same; and whatever improvements the new controlling shareholders made would accrue to both classes of stock.

UPDATE:  In a dramatic late afternoon selloff, BKUT collapsed from $673 to $570 — on volume of 4 more shares.  (BKUTK remained steady at $510.)

SPECULATIVE STOCKS

If BKUTK is the quintessential illiquid “value” stock, to be bought only with money you can truly afford to lose (but almost surely won’t), then PRKR is the quintessential speculative stock, to be bought only with money you can truly afford to lose (because you really might).

PRKR believes Qualcomm owes it a vast amount of money plus a vast amount of interest (and, in an ideal world, treble punitive damages, which I believe are 100% deserved but 2% likely to be awarded).  As I and others have written, the stock could be worth 5X or 10X its current 94 cents a share.

I’m not sure how much news we can expect between now and the trial.  One thing to hope for is the announcement of a trial date.  That could boost the stock a little (fully disclosure: I have such an outsized position in this one, I will take advantage of opportunities to prune back from what is now a preposterously large bet to more like a merely really, really large bet).

In the meantime, I found this article esoteric but encouraging.  It relates to a petition PRKR filed with the United States Supreme Court, asking that the Federal Patent Appeals Court be required to say more than just one word when denying an appeal.  If a plaintiff’s appeal is denied, and the Court has given it due consideration, how about a sentence or two explaining why it was denied?  That’s what most federal appeals courts do; why not this one?

As you know, the Supreme Court accepts very few — I think fewer than 1% — of the cases it’s asked to hear.  So the odds of their taking this one are low; and even if they did and PRKR won, that win would have no direct effect I can think of on the company’s several active lawsuits (the biggest being against Qualcomm).  So this is not a huge deal.  But as you’ll note from the article, this petition has now garnered no fewer than eight amicus briefs — most petitions to the Court get none or just one or two — and the publicity among people in the patent world, let alone a favorable ruling from the Supreme Court, it seems to me, help to make clear that PRKR is not a “patent troll,” but rather a serious inventor with serious patents that — thus far — has fallen victim to a legal system that greatly disadvantages the very kind of invention and innovation that helped make the country great.

So — “it can’t hurt.”

Have a great weekend!

If you’re really rich and can, thus, afford Broadway, two shows that I think will leave you smiling: Death Becomes Her and Maybe Happy Ending.

 

Pitchforks

I have frequently linked to Nick Hanauer’s “pitchforks” warning.

It is so worth reading if you haven’t; and hard not to think, 10 years on, that the first pitchfork just came — appallingly and unforgivably, but perhaps understandably — in the form of a 3D-printed ghost gun.

An awful lot of people are singing the murderer’s praises — literally (and this is just one example).  A lot of others are taking the opportunity to put the tragedy into perspective — this way (60 seconds) and this way (90 seconds, from Pastor Paul Drees).

It’s not clear to me that, despite their winning the votes of many who are hurting badly, Trump and his fellow billionaires are attuned to — or much care about — their pain and frustrations.

From the Patriotic Millionaires newsletter (worth reading in full):

Perhaps the biggest signal that Trump’s presidency is going to be a good time for billionaires is the fact that he has tapped a number of them to work directly in his administration.

[If confirmed], the total net worth of Trump’s Cabinet would be $11.8 billion, [100 times] the worth – $118 million – of President Biden’s current Cabinet.

And when you include non-Cabinet members like Musk, Ramaswamy, and Stephens, the figure balloons to $382.2 billion – which is more than the GDP of 172 countries.

Trump has made it no secret that he intends to deliver, and deliver big, for the wealthy.

The stock market has already rallied in anticipation. Between November 4th (the day before the election) and November 12th, America’s 815 billionaires saw their fortunes jump by $276 billion.

Musk gave $250 million to Trump’s election effort and is already reaping his reward. Reports are out that, today, Musk became the first person to top $400 billion in wealth – a 66% increase since Trump’s election.

Two weeks after the election, MSNBC ran the headline, “Could Trump and his billionaire buddies turn America into an oligarchy?” Unfortunately, if billionaires have this much wealth, influence, and power even before Trump returns to the White House, we’re already living in an oligarchy. The question should be how much worse will it get.

If you’re a millionaire — one of you recently clocked in at $45 million — you might want to consider joining the Patriotic Millionaires.  If not — if you’re a normal person — you might want to chip in $25 to support their work and get their newsletter.

I love capitalism, when sensibly regulated, and love and admire more than one billionaire myself.  The ones I know support fair taxation.  This guy is not one of them: How One of the World’s Richest Men Is Avoiding $8 Billion in Taxes.

Let us hope that ghost gun was the last pitchfork, not the first.

A MUST-READ BONUS

Don’t Let Donald Trump Take Your Soul, Too — former Trump official Tim Miller on not becoming a nihilist.  (Oh, and look — he even uses The Economist’s word of the year, kakistocracy!)

 

It’s The Economy, Stupid

Courtesy of the White House:

After decades of trickle-down economics that slashed taxes for the wealthy, diminished public investments, offshored jobs and factories, destroyed unions, and ripped at the social safety net, President Biden has written a new playbook that’s growing the economy from the middle out and the bottom up . . .

. . . delivering the strongest recovery in the world, and laying a strong foundation for years to come by:

  • Investing in our infrastructure, manufacturing, scientific development, and communities that have been left behind after decades of neglect;
  • Giving working families and the middle class the chance to get ahead by creating good jobs with family-sustaining wages and by supporting unions;
  • Lowering costs and giving smaller businesses a fair chance to compete.

Over the last four years, we have made remarkable progress:

  • Over 16 million jobs created—the most in a single presidential term in American history—with jobs created every single month;
  • The lowest average unemployment rate of any administration in 50 years;
  • A record 20 million new business applications;
  • A doubling of union petitions;
  • The smallest racial wealth gap in 20 years;
  • More Americans with health insurance than ever before;
  • The stock market at record highs and 401(k)s up;
  • More than $1 trillion in announced private sector investments in clean energy and advanced manufacturing in America;
  • Lowering inflation while supporting a strong labor market—with inflation down faster and lower than almost any other advanced economy, and incomes up almost $4,000 more than prices.

To see all this in pictures — with links to The Wall Street Journal, The Economist, et al — click here.  (And share?)

BONUS

Tales from the Transition.

Amazing.

 

What She Deserves

Robert Reich on What Liz Cheney deserves from Joe Biden:

She doesn’t need a pardon from Biden because Trump’s claim wouldn’t last an instant in federal court. What she deserves from Biden is a Presidential Medal of Freedom.

→ So true.

And speaking of democracy defenders . . .

Kris M.:  “I was excited to read (listen to) On Freedom but about a quarter of the way through I switched to another book.  It requires more reflection than I can give it when I’m mucking my horses’ stalls and filling hay bags.  My plan is to buy a paper copy and use my eyes, so that I can give it undivided attention.  One book that does make great listening: Professor Corey Brettschneider’s The Presidents and the People: Five Leaders Who Threatened Democracy and the Citizens Who Fought to Defend It.  I found it inspiring; it made me more hopeful and ready to do my part, however tiny a bit part that may be.  (And, it completely changed my impression of John Adams, which had been mostly formed by David McCullough’s biography.)”

Jim L.: “You’ve stopped linking to DNC.  I assume this is due to the horrifying news of mishandled DNC funds (which would have been far less scrutinized had Kamala won).  I can’t be your only reader who’d love to hear your perspective on the topic.  It’s an awful time to be a (strongly anti-MAGA) Centrist, dismayed by all the nonsense.”

→ Never fear, Jim – I’ll be linking to the DNC again before you know it.

In a presidential year, the DNC only nominally controls its funds – it’s the campaign that mostly runs the show.  With hindsight, some money could doubtless have been more wisely spent, some contracts more aggressively negotiated.  But in the heat of a 107-day campaign to save democracy (as many saw it), some bad judgments and bad deals were likely inevitable.

(And it would have cost nothing to go on Joe Rogan.  All so easy in hindsight.)

To put the scale of the campaign’s spending in context — $1.5 billion or so — Americans spend more than that every 107 days . . . on ketchup.  But still — I hear you.

As to your being a centrist . . . hats off to you.  Most Americans, I think, basically are — a little to the left or the right.

If only we had ranked-choice voting, moderates would have a far better chance of winning and “the sensible center” would once again have a powerful voice.

 

It Does No Good To Be Depressed

The Guardian calls On Freedom, Tim Snyder’s just-published encore to On Tyranny, his #1 New York Times best-seller, “A rigorous and visionary argument . . . Buy or borrow this book, read it, take it to heart.”  I’m buying it.

The Economist has chosen kakistocracy — “a government run by the worst, least qualified, or most unscrupulous citizens” — to be its word of the year. 

With a pathological liar narcissist convicted felon and adjudicated rapist about to take office and seeking to put this man in charge of the Defense Department, could there have been any other choice?

The Scariest horror film of the year:  Stop the Steal.  My bad for not linking to it before the election.  January 6th — a religious war.  Which brings us back to Pete Hegseth, a religious warrior himself.

All that said:

It does no good to be depressed. 

Every day is a gift.  (We have hot water!)

What could do some good:

> Join an Indivisible chapter.

> Read their Practical Guide to Democracy on the Brink.

> Deposit $100 or $1,000 or $10,000 every month into an account you’ll be using soon to help win back the House and Senate.

> Post actively on social media (thoughtfully, respectfully, accurately) . . . criticizing when criticism is due; pushing back when the other side takes credit for Democratic accomplishments, like infrastructure projects Trump’s team voted unanimously against or the low unemployment and inflation he will have inherited.

Have a great week.

 

Your Excellent Feedback

But first my two cents:

Joe should have waited for Hunter’s sentences to be handed down later this month . . .

. . . which might have been nothing more than community service and an acknowledgement that criminal charges are almost never brought for either of these crimes, and thus the normal “sentence” for committing them is . . . no sentence at all.

If one of the sentences had involved prison, Joe might then have commuted it — but not issued a pardon.

Or Hunter might have done a truly patriotic thing and prevailed on his dad not to pardon him.  He might have said:  “Let’s not let them equate my transgressions with theirs, Dad.  Bashing cops in the head, trying to subvert the election, and maybe hang the vice president, is nothing like failing to file your taxes.  I can spend a few months in jail for my country.”

Either way — what was the rush?

Two more cents for the PRKR shareholders among us:  Diving into the ParkerVision Litigation Against Qualcomm.

And now your excellent feedback to yesterday’s post, Why We Lost: The Elephant In The Bathroom.

Steve S.:  “Another important reason: Biden should have stuck to being a transitional president which most of us believed meant a one-term president. Had he done so, there would have been ample time for whoever was the nominee to put together a campaign that dealt with all of the issues you cited.”

Norm O.:  “You forgot Covid frustration. People suffered mightily with shutdowns and school closures.  If you had two in a family working to make ends meet, and one had to stay home with kids, or if you had seven in a family stuck for a year or more in a tiny apartment 24/7, your lives were upended, and the sense was that the scientists, doctors, elites — and Democrats — were insensitive, just spouting ‘It’s the science!’  Dems think actions speak for themselves. No empathy. That was a huge part of the revolt against elites, the establishment, the experts. Trump exploited that brilliantly.”

Eric M.: “The elephant in the room is none of what you cited.  Since 2014, there has been an information war going on, but the only side fighting has been MAGA. The goal of this war, best but not solely waged by Steve Bannon, is not to advance one party, but something more strategic — to shift American culture to the right and create an irrational cult around that shift.  The methods include psychological warfare techniques paired with social media and right-wing-controlled traditional media.  The strategy and tactics of this prolonged initiative are made plain in the book Mindf*ck and elsewhere.  Until we build campaigns that take a long view . . . leverage psychology to shift how people think rather than focusing narrowly on how they vote . . . and manage (build and dominate) the communication channels, we will continue to fail.”

Paul B.:  “The reason Democrats lose is simple. Republicans pick 2 or 3 subjects and repeat them over and over and over whether or not any of it is true. It is one of marketing’s basic tenets:  A customer needs to hear something seven times to hear it!  Republicans do this! Immigration, inflation, trans! Democrats scatter shot a couple dozen messages.  Any one person is lucky to hear one twice.  Also: Democrats are horrible at taking credit for what they do!  So bad that we allow Republicans to steal that credit! And, lastly, Democrats are so worried about fairness that they will make a statement but then hedge it with some qualifier that steals from the original statement!”

Bryan N.:  “I agree with your reasons but would add the lack of response to Republican attack ads.  We saw it in 2020 with GOP ads running in Florida, endlessly, that showed Biden, Castro, and Maduro ‘together’ and labeled them socialists. The ads said ‘socialist’ over and over. There was no pointed response from the Dems. This year, if you watched football, you saw the anti-trans ads over and over with no response. It was the same strategy: Push the same button over and over, harder and harder.”

→ You are exactly right.  We should have countered — over and over — with a former football star, or maybe Arnold Schwarzenegger, saying:

Hey – let’s leave the issue of trans athletes to the coaches, not the politicians.  OK?  The NCAA is all over this with a sensible approach you can read for yourself.  [A QR code appears.]  Trump just wants to distract you from his plans to enrich billionaires and stick it to working families. [Another QR code, linking to Project 2025]  Enjoy the game!

(Hindsight is so easy, isn’t it?)

Michael H.: “When I was in public high school in L.A., you were given ‘points’ based on age, height and weight if you wanted to play interscholastic sports. If you had a lot of points, you had to play Varsity or JV; if you had lower points, you could play B level or C level.  (If you were good enough, you could play up but not down.) Boys and girls played on different teams then but the same principles could apply to resolve the trans issue — and it could be done, as you suggest, on a community by community or league by league basis.  PS — The trans community spokespersons need to stop saying that anyone who disagrees with them is guilty of ‘genocide’!”

Dan W.: “I’ve long wondered why no one brings up the analogy of a wrestler who is missing a leg. (Not as uncommon as you’d think.) Let’s say he normally would compete in the 152-pound category, but based on his actual weight he competes against 126-pounders. Plus, he has two other advantages: He’s learned to compensate throughout his life and has developed more upper body strength than his competitors. Plus – crucially – he practices every day against wrestlers with two legs. His opponent has never wrestled anyone with one leg before, though – so he has no way to figure out what to do when, for example, the leg he always goes after for a takedown is not there.”

Jane A.: “Our country throughout its history seems to swing from one extreme to the other, passing the middle only on its way to one extreme or another.   America so far has not inherently been a country of moderation. Perhaps we’re still too young.  And it’s also possible that our 2-party, dialectic system feeds into that.  Do we need a centrist third party?  For now, I hope the Democratic Party continues to move in the direction of being the party of competence and common sense.  We support the right values and good solutions.  We just need to sell them a whole lot better.”

→ The solution, I think, is not a third party but, rather, open primaries and ranked-choice voting.  To win, you’d have to appeal to the great common-sense middle.  That would empower moderates, disempower the extremes.

David Z: “W.O.K.E. = World Of Kindness & Empathy.  That’s it.  None of our candidates actually ran on it but the thugs kept demagogue-ing it anyway.  They spent a fortune on ads about pronouns and trans healthcare in prisons.”

BONUS

The Republican false-flag effort to turn off Kamala Harris voters worked really well.  Trump got just a few more votes than he had in 2020, when he lost by 7 million to Biden.  But enough Democrats stayed home to put him back on the throne.

Joe Klein on weakness being our weakness — and other important points to ponder.