271: Media & Tech Content Spend, Lithium Nationalism, Crowdstrike, Bill Ackman, SpaceX Starlink, Unreal 5, Scuttleblurb, Oil & Gas Pipelines, and Neal Stephenson
271: Media & Tech Content Spend, Lithium Nationalism, Crowdstrike, Bill Ackman, SpaceX Starlink, Unreal 5, Scuttleblurb, Oil & Gas Pipelines, and Neal Stephenson
"the return-on-brain-damage profile"
The fastest way to starve a horse is to assign two people to feed it.
—Unknown
💸 I paid my taxes this weekend.
It made me think of how the psychology of paying taxes for salaried employees and self-employed people is *so different*.
If taxes are taken out of your paycheck, it’s almost like that money never existed. If you get a refund at the end of the year, it feels like a bonus, free money!
If all the money makes it to your bank account and then you have to send a huge chunk of it to the gov’t, it feels very much like your money, it’s very real.
I bet this explains a fair amount of the divergence in views on taxation between the two groups.
If everyone paid taxes like the self-employed, we’d probably see a lot more public scrutiny on taxation, and if everyone had taxes collected at the source and never saw that money, we’d see even less of it.
☢️ I don’t know how you’d do it as far as methodology is concerned, but I suspect that if you could ask a lot of ‘average people’ (whatever ‘average’ means, this is a different topic…) what they think is going on inside a nuclear power plant — without any leading questions, 100% neutral inquiry, even if they don’t really know, just try to tease out what they half-consciously imagine is going on there, even if it’s really vague and just their best guess — I bet that most believe there’s a small nuclear explosion in there, like a miniature atomic bomb, that is being controlled/contained by the plant, and that this is what produces power.
In other words, I’m not sure most people realize how different power plants and nuclear bombs are, and maybe educating them would help with public support/perception.
This is especially important since there are many groups who are doing the opposite and trying very hard to mislead the public into thinking all kinds of incorrect things about this technology that could make the world cleaner, safer, and more prosperous.
🎹 During an interview with Rick Rubin, Neil Young mentioned that his piano is in a central spot in his house so that to get from one place to the other, he’s always walking by the instrument.
You never know when inspiration will strike, but you certainly increase the odds of creating/catching a good creative moment if you increase the frequency of opportunities to play.
This doesn’t just apply to music.
If you want to read more, create better conditions to read (books laying around, a comfortable reading spot in an area of your house where you like to hang out during downtimes, etc).
If you want to exercise more, there are lots of ways to create habits and reduce friction to do so. If you want to eat better, make sure your favorite healthy foods are always available and try to resist the temptation to buy snacks, etc.
Not that I’m a pro at applying this advice to *every* aspect of my life, but it definitely makes things easier when I do.
💚 🥃 Been a while since I gave you an update on metrics:
This steamboat (⛴) almost has a crew of 7,000! We may have to upgrade to an aircraft carrier at some point 🤔
It may not be super-obvious on the fully zoomed-out graph above, but in the past couple of weeks, there’s been a nice acceleration of new free subs: Welcome to all the fresh faces on board! 👋
That’s the good news.
The bad news is that paid supporters didn’t keep pace, so we’re back at 4.69% supporters and 95.31% of totally free subs.
(I still owe you an AMA podcast for the first time we crossed 5% — since then, I did 3 other podcasts with guests and have more planned, so that took all my podcasting bandwidth… I just need to find some extra time in between regular writing and those conversations to do a solo recording project. It’ll happen, don’t worry!).
A Word From Our Sponsor: 📈 Revealera 📊
Revealera provides data and insights for investors into hiring trends for 3,500+ public/private companies + technology popularity trends for 500+ SaaS/Cloud Products.
We give investors insights into:
Job Openings trends: Insights into a company’s growth prospects.
Technology Popularity Trends: Insights into how widely products like Datadog, AWS, Splunk, etc, are gaining adoption.
Vendor Sign-ups (Currently Alpha) tracks the # of companies, as well as the specific companies, that have signed up for SaaS products such as Zoom in near real-time.
Visit Revealera.com for a ✨free✨ trial/demo.
Investing & Business
🎬 🎥 Are you not entertained? 🍿🎞
h/t Nick (🔐)
Bill Ackman swears off activist short-selling
From his 2021 letter:
We have also on a few rare occasions engaged in the “noisiest” form of activism, activist short selling, although this has been limited to two high-profile activist short engagements. Despite our limited participation in this investment strategy, it has generated enormous media attention for Pershing Square. In addition to massive amounts of media hits, our two short activist investments managed to inspire a book and a movie. Fortunately for all of us, and as importantly for our reputation as a supportive constructive owner, we have permanently retired from this line of work.
I guess the return-on-brain-damage profile doesn’t make sense anymore… 🧠🔨
🥫 House Rule: Always try the generic version 🍯
My wife and I have a rule that we always try the generic or cheap version of food staples, like peanut butter, ketchup, mustard, etc.
For some stuff, I pay up because I know it makes a big difference in my life, like smartphones or computers. But for a lot of other things, I think it's worth trying the cheaper alternatives. Worst case scenario, you don't like it and you switch.
Best case, you save 20-30% on that thing *for decades*, at no real loss of enjoyment. Over multiple items, it all adds up.
🔋Lithium Nationalism 🪫
Andrés Manuel López Obrador has moved swiftly to nationalise Mexico’s lithium reserves [...]
“The lithium is ours,” López Obrador crowed at his news conference on Tuesday, recalling “the oil is ours” refrain from the country’s 1938 expropriation of the oil industry from foreign companies. That act is still seen as a landmark expression of sovereignty by Mexican nationalists.
Bolivia has made lithium a state monopoly and Chile is planning to set up a state-owned lithium company. [...]
The new law will establish a “decentralised” agency for the development of lithium. It also states: “The exploration, exploitation and use of lithium is declared to be of public utility, for which no concessions, licences, contracts, permits, allocations or authorisations will be granted.”
Mexico’s lithium potential remains a matter of debate. Lithium production is complex and costly because the metal is highly reactive. It is extracted from brine or from rocks, depending on the region. [...]
Mining experts expressed scepticism over the government’s move into a capital-intensive sector such as lithium, noting Mexico’s failure to establish a successful state-run uranium company in the 1980s. (Source)
Great, so it looks like Mexico, Bolivia, and Chile are likely to produce less lithium than they otherwise would going forward…
Seems to me that if they want to make money from their lithium deposits, they can tax the mining, create royalties, etc.
But having a government-run system of exploiting it rather than leaving that up to those who know how to do it seems like a way to produce smaller amounts and make less money for the government over the long-term, as these entities are likely to bloat into political piggybanks and re-election employment programs…
But I’m just pattern-matching, I’m no expert on this ¯\_(ツ)_/¯
🔥 Interview: David Kim aka Scuttleblurb 🔥
Friend-of-the-show and Extra-Deluxe supporter (💚💚💚💚💚 🥃) David Kim did an interview for a South-Korean publication:
Some highlights (I almost wanted to quote the whole thing):
Keep in mind that sound investing has as much to do with judgment and synthesis as it does information gathering. Do enough of these calls and you’ll realize that everyone is blindfolded and touching a different part of the elephant. Part of an analyst’s job is to weigh to different perspectives and roll them up into as accurate an understanding of the company as you can. Saying you’ve spent countless hours doing this many calls is a quantifiable measure of progress. By contrast, synthesis, dispassionate analysis, and resource management are somewhat abstract skills, not something you can really brag to allocators about. But the lens through which you interpret information and how you balance your time across different opportunities are so important.
I once heard an investor say that they take research on a company to the point of diminishing returns…and then push even further. But there are some downsides to this impressive-sounding rigor. The world is an unpredictable place. No matter how well you know a company, there will always be something that takes you by surprise. Deep diligence can lead to unjustified conviction or lull you into a false sense of security. Reluctant to admit to wasted effort, you may dismiss counterarguments and rationalize negative developments. And the time spent taking your knowledge from 99.01 to 99.02 on company A might have been better spent going from 0 to 10 on companies B and C…so even if you have the mental flexibility to change your mind and exit an insanely well researched position, you may find yourself lacking replacement candidates as you literally don’t know what you’re missing. The balance between exploration and exploitation is unique to each person. As for me, I want to be in maybe the 80th to 90th percentile of knowledge on each of the companies I own. But finding myself in the 99th percentile may be a sign that I’m not optimally allocating my scare time.
Such good points in this.
You don’t know what’s worth spending time on at the start, so you extend tentacles every which way. As you gather more knowledge about each, you prune some branches and intensify pursuit of others, and then extend this approach down to avenues of inquiry within each company.
This is the universal dilemma of exploration vs exploitation.
In a world full of specialists, I feel like generalists (as I try to be) can help inject a bit of exploration and randomness into the lives of people who may have a hard time wandering outside their field because the internal pressures to focus on that one thing are so high.
There are interesting ideas at the intersection of fields that rarely touch…
In investing, writing is very often a tool of persuasion. An analyst does their research, determines the stock is a BUY, and crafts a narrative consistent with that rating, which often leads them to diminish contrary views. I write to understand, not to persuade. Scuttleblurb is a research journal. It’s a place for me to think out loud and figure things out. My thoughts should be structured coherently but they need not coalesce into an airtight consistent thesis that argues why you should buy or sell a particular stock.
Interview: George Kurtz, Founder & CEO of Crowdstrike
More a friendly conversation than an adversarial interview (do these still exist?), but it’s a good 101 overview if you’re not familiar with the company.
Oil & Gas Pipelines from Russia to Europe
Friend-of-the-show Doomberg (🟩 🐓) puts the european gas crisis in perspective:
How much gas does Europe buy from Russia? Most estimates peg the annual amount to about 155 billion cubic meters. There are 35.3 cubic feet in a cubic meter, and there are 365 days in a year, thus Europe has a 15 bcf/d gap to fill by turning off the Russian spigot [(155 x 35.3)/365 = 15 bcf/d]. [...]
At a rate of 15 bcf/d, Europe relies on Russia for the equivalent of 30% of the entire global LNG export market. [...]
Thanks to the shale revolution, the US now produces approximately 96 bcf/d of natural gas. Of that amount, nearly 12 bcf/d is exported via newly constructed LNG terminals. Said another way, Europe’s Russian natural gas imports represent the equivalent of 125% of the entire current US LNG export capacity. This is a significant number. [...]
While the US is a major global producer of LNG, it is hardly the lone player of size. Qatar and Australia produce similar quantities, and together the “big three” have more than half the global market share. Naturally, the soaring price of LNG is triggering a substantial global supply response. In addition to US growth plans, Qatar is making bold bets with plans to increase its LNG export capacity from approximately 11 bcf/d to 17 bcf/d in the coming years.
Science & Technology
🎮 Unreal Engine 5 Demo: City Playground 🎥
If I could show this to 12-year-old me…. 🤯
Can you imagine what Unreal Engine 6 or 7 will be like?
📡 🛰 SpaceX Starlink vs Russia’s Electromagnetic Warfare
SpaceX founder Elon Musk steered thousands of Starlink terminals to Ukraine after an official sent him a tweet asking for help keeping the besieged country online.
“The next day [after reports about the Russian jamming effort hit the media], Starlink had slung a line of code and fixed it,” Tremper said. “And suddenly that [Russian jamming attack] was not effective anymore. From [the] EW technologist’s perspective, that is fantastic … and how they did that was eye-watering to me.”
The government, on the other hand, has a “significant timeline to make those types of corrections” as it muddles through analyses of what happened, decides how to fix it and gets a contract in place for the fix.
“We need to be able to have that agility,” Tremper said. “We need to be able to change our electromagnetic posture to be able to change, very dynamically, what we’re trying to do without losing capability along the way.” (Source)
🩸🦟 First US trial of genetically modified mosquitoes 🦟🦟
There are few things I hate (🤬) more than mosquitoes.
I’d spend so much more time in nature during the summer months without these little monsters around.
For some reason, I happen to attract them a lot. I always end up with a swarm trying to reenact the x-wing trench run with my head playing the role of the Death Star…
Wild A. aegypti mosquitoes can carry viruses such as chikungunya, dengue, Zika and yellow fever, so scientists have sought ways to reduce their populations. Oxitec’s engineered males carry a gene that is lethal to female offspring. If all goes to plan, when released into the environment, the engineered males should mate with wild females, and their female offspring will die before they can reproduce. Male offspring will carry the gene and pass it on to half of their progeny. As each generation mates, more females die, and the A. aegypti population should dwindle.
Every time I talk about mosquitoes, people love to tell me about how whole ecosystems would collapse without them…
Sounds like a great story — it has that counter-intuitive “ah-ha!” aspect — but don’t worry, the food chain isn’t built on a foundation of mosquitoes, they aren’t land plankton.
The animals and insects that eat them also eat all kinds of other insects, and reducing their populations in areas where humans are doesn’t mean completely removing them from the whole planet (yet).
There are also *a lot* of different species of mosquitoes (hundreds and hundreds), so getting rid of the most dangerous ones only means that other species will fill their now-vacant ecological niches:
Suppressing A. aegypti also won ’t reduce the need for pesticides. A. aegypti makes up only about 4% of the mosquito population in the Keys. The black salt marsh mosquito (Aedes taeniorhynchus) — more of a nuisance than a disease vector — probably represents about 80% of the mosquito population on the islands.
And as a commenter on HN points out: “Aedes Aegypti isn't even a species that's native to the US. It's been brought there by humans... you're trying to return nature to a previous state before humans interfered.”
In this trial, because the gene is only passed on to males, it acts a bit like Zeno’s paradox, about halving with each generation:
the team found that the lethal gene persisted in the wild population for two to three months, or about three generations of mosquito offspring, and then disappeared. No mosquitoes carrying the lethal gene were found beyond 400 metres of the release points, even after several generations.
The Arts & History
🪐 Interview: Neal Stephenson, legendary sci-fi writer 📚
I enjoyed this podcast conversation between Kevin Scott (who happens to be Microsoft’s CTO) and Neal Stephenson:
This is where I admit that I’ve only read Cryptonomicon by Stephenson, but it was enough to make me a fan (the book is chock-full of enough ideas to be worth about 5 books by most other authors).
I’ve been meaning to read Seveneves for a long time, but unfortunately, I haven’t read much fiction since having kids… Hopefully someday soon I can get back on that train!
♟ Garry Kasparov Podcast: ‘Germany's Making a Deadly Mistake’ 🇩🇪 🇷🇺 🇺🇦
Very interesting podcast, to be filed under real-time-history:
Tom Tugendhat is a member of the British Parliament and the Chairman of the Foreign Affairs Committee. He is also a Lieutenant Colonel in the Territorial army and has served in Iraq and Afghanistan in addition to having been the principal advisor to the Chief of the Defense Staff (IE: the Professional Head of the British Armed Services).
Listen to Tom, Garry Kasparov, and Uriel Epshtein discuss how the war in Ukraine is evolving, what countries are supporting Russia, what victory could look like, and how we can achieve it.