Gun Stocks

I don’t know why I care about this.  I guess because I’m interested in what moves stock prices, narratives invented around stock prices, and how things get reported?

This effect seems to me to be exaggerated.

Motley Fool notes:

The market for firearms is highly fragmented, with many names — Glock, Colt, Beretta  — privately owned, located abroad, or both. This can making investing in guns tricky. One of the easiest ways for an investor to gain exposure to this market, though, is through buying shares of industry leader American Outdoor Brands.

American Outdoor Brands is a nicer name than “Smith & Wesson”

Yesterday they were up 3.21%.

I asked a financial friend if he thought that was significant:

3%? Not very

The other big gun stock is Sturm, Ruger – RGR.

Yesterday they were up 3.48%.  Today they’re up another 1.78%.

Is that meaningful?  Maybe?  A tiny bit?

Soaring?

There is an initial burst in stock price immediately when trading opened, but that was mostly corrected by the end of the day.

Why do we tell ourselves this story?

I guess because it’s shocking these companies aren’t at all harmed when their product or a competitor’s products are used to shoot hundreds of people.

We tell this story because it’s twisted and we like twisted stories.

Even the Norwegian Sovereign Wealth Fund owns a buncha gun stock:

 

 


Fascinated by: Ray Dalio

Ray Dalio, billionaire founder of Bridgewater Associates, one of the world’s largest hedge funds.

That’s a 30 minute video he made about how the economy works, nbd.

A brilliant person with an atypical mind who lays out their worldview in a kind of manifesto can pretty much always get my attention.

Three of his Dalio’s beliefs:

  • “algorithmic decision-making is coming at you fast”
  • evolution is good
  • to achieve success you must face and accept harsh realities

You can read his Principles online.  Soon they are coming out in book form, I’ve pre-ordered.   Here’s a sample, from the Principles website, which is www.principles.com:

A lot to think about in Ray Dalio’s Principles.

BUT: let’s limit our discussion today to one moment in his TED Talk above.  We’re going to talk about a joke and the audience reaction to it.

You’ll have to watch about one minute of the talk.  Start at 14:30.

Dalio is describing a complex system where everyone in his company rates each other and is radically transparent with each other.  Everyone can rate each other, in different areas.  Even a lowly employee can rate Ray, creating charts like this:

At 14:46 he says that because of this, at Bridgewater there is no politics.

Which: Ray Dalio is 100x smarter than me, but I’ll bet ten dollars there are indeed politics at Bridgewater Associates, probably insane, high-order, wildly weird politics.

Anyway.

At 15:13 Ray Dalio makes a joke.  This being his TED talk, no doubt a joke he had practiced.  Radical transparency, he says, doesn’t apply to everything.

You don’t have to tell somebody their bald spot is growing or their baby’s ugly.

People laugh a little bit.  Dalio continues.

I’m talking about the important things.

People laugh a LOT.

Dalio seems even thrown by how much the audience laughs at the second part, not the intended punchline.

Why?

The audience laughs because Dalio is missing the point.

Dalio inadvertently reveals he doesn’t know what the important things are to most people.

What are “the important things?” Making sound investment decisions? Tweaking the algorithm properly? Workplace communication?

Whatever, yes, in theory.

But really?  No. To most humans whether your bald spot is growing and whether your baby is ugly are the important things.  It would hurt way worse to be told either of those than that you’re ineffectively communicating in the meeting.  That pain is a measure of importance.

The audience is expressing laughter / disbelief at the fact Dalio assumes workplace discussion is more important than stuff like whether your baby is ugly.

Perhaps Ray Dalio doesn’t get it because he’s trained himself not to feel that kind of sensitivity.  That’s one of the points of Principles, to train your mind to get that nonsense out of the way.  It’s served him very well as an investor.

But it’s a little robotic, and a little detached, and a little inhuman.

If I worked for Dalio, I suspect I’d rate him low in the category of “empathy / compassion / understanding for what matters to people / sensitivity.”

But then, are those categories even in the algorithm?

Oh btw James Comey used to work for Ray Dalio, and also Dalio recently recommended allocating 5-10% of assets to gold.

speaking of

algorithm

source: Wiki user Fulvio Spada

looked it up at Online Etymology, my new fave site.

algorithm (n.)Look up algorithm at Dictionary.com1690s, “Arabic system of computation,” from French algorithme, refashioned (under mistaken connection with Greek arithmos “number”) from Old French algorisme “the Arabic numeral system” (13c.), from Medieval Latin algorismus, a mangled transliteration of Arabic al-Khwarizmi “native of Khwarazm” (modern Khiva in Uzbekistan), surname of the mathematician whose works introduced sophisticated mathematics to the West (see algebra). The earlier form in Middle English was algorism (early 13c.), from Old French. Meaning broadened to any method of computation; from mid-20c. especially with reference to computing.

The man from Khwarizmi.

Wiki:

Few details of al-Khwārizmī’s life are known with certainty.

He worked in Baghdad as a scholar at the House of Wisdom established by Caliph al-Ma’mūn, where he studied the sciences and mathematics, which included the translation of Greek and Sanskrit scientific manuscripts.

 


Warren Buffett

New Berkshire Hathaway letter is out.  Free insight and humor for capitalism’s cheery uncle, a great read every year, even if I understand at most 1/12 of it.

wb-1

 

Sunny American optimism:

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The infectious, enthusiastic amateur style of writing reminds me of Bill James:

wb-3

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Some of the companies Berkshire owns:

wb5

coke

9.3% of your Coke is Berkshire’s.

An unlikely hero:

wb6

Jack Bogle founded Vanguard, and created a simple, low cost index fund for everyday investors.

bogle

found that at JL Collins impressive website.

Buffett tells you, in simple terms, how to get rich:

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Why people don’t do that:

wb8

On the other hand here’s the S&P 500 chart since 1980:

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Doesn’t look like a washtubs moment to me.

Over at marketplace.org, Allan Sloan points out some of the things Buffett leaves out:

Allan Sloan: Two things are missing. One was how wonderful the management of Wells Fargo was, which he wrote the previous year. The second thing is he lavished praise on this company called 3G, what’s known as a private equity company, from Brazil, which manages a company called Kraft Heinz, which is Berkshire Hathaway’s biggest investment. And what it does is it goes around, it buys companies — now with the help of a lot of financing from Berkshire Hathaway — it fires zillions of people, the profits go up, and then after a while, it goes out and buys another company and does the same thing.

Buffett makes me think of Andrew Carnegie, a zillionaire of a hundred years ago who also had some kind of public conscience.  If some percentage billionaires weren’t also lovable characters like Buffett, would capitalism collapse?  Does his dad humor, like Carnegie’s library building, plug a dyke that holds back revolution?

carnegie

At the Berkshire Hathaway shareholders conference, you can challenge table tennis champ Ariel Hsing:


Buffett

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Warren Buffett’s advice always sounds simple, which isn’t the same as easy to follow.
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Loved the doc about him on HBO.  The first scene is him advising high school kids to take care of their minds and bodies.  The second scene is him in the drive-through line at McDonald’s.


Perspective worth hearing

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saw this letter to the editor of the Financial Times on somebody’s Twitter.


Inside the La Croix wars: FIZZ vs Glaucus Research

la-croix

We have the best correspondents here at Helytimes.  Anonymous Soda Lover tips us off to the story of FIZZ vs Glaucus Research.

FIZZ is the stock ticker symbol of National Beverage Company, which makes La Croix, the popular sparkling water, Joe Mande enemy, and indispensable hydration agent at Hollywood writers’ rooms:

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Myself, I prefer the Perrier slim can, because it is thin and tall like me:

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Plus a smaller amount of fluid to become hot in your hand.

But one way or another: Hollywood and indeed America and the world is full of addicts and compulsives who have to consume something constantly.  The beer-like but zero-cal zero sugar La Croix fills that hole.  Thus, there is an endless market for La Croix.

And indeed, look at National Beverage’s stock price over the last two years:

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I cut out what happened this week, when this news came out:

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Shares of National Beverage plunged as much as 15 percent on Wednesday after Glaucus Research revealed a short position in the company.

The short selling firm valued the parent company of LaCroix sparkling water at $16.15 per share, more than 65 percent below the stock’s Tuesday closing price of $46.48.

Glaucus’ note alleges that National Beverage “manipulates its reported earnings” as its “reported financial performance is inexplicable.”

Later on Wednesday, National Beverage issued a statement calling the report “false and defamatory.” The stock recovered its losses and ended the day down 8 percent.

“We believe that this ‘report’ was intended to severely manipulate our stock price downward in support of short sellers, whose short position has dramatically increased over recent weeks,” the company said.

First of all, “Glaucus”?  Their name comes from the glaucus.  Not the ancient Greek sea god:

800px-bartholoma%cc%88us_spranger_006

But the freakish pelagic gastropod, also known as the blue sea slug:

blue_sea_slug_-_glaucus_atlanticus_and_glaucus_marginatus_the_small_one_6779229197

From Glaucus Research’s website:

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Glaucus Research, based in Newport Beach, CA, has a rep for bringing the hammer down on fraudulent mid and small-cap Chinese companies.  But this week, they dropped a report on FIZZ.

Glaucus alleges all manner of mischief by FIZZ CEO Nick Caporella.  At Helytimes we really believe that the first step in evaluating a company is seeing a picture of the CEO.  Unfortunately, we can’t find a confirmed pick of Mr. Caporella.

It appears that Nick Caporella personally owns 74% of FIZZ.

We do find this on FIZZ’s website:

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Caporella’s letters have been weird before:

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This non-English might make more sense when you remember FIZZ also makes Faygo, drink of choice of the Insane Clown Posse:

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Now listen.  It’s not often that we at Helytimes recommend reading a 56 page report on the finances of a company, but this one is worth a look.  For example, have a look at Caporella’s letters to prospective National Beverage Co. buyer Asahi, in which he refers to himself as Nick-San.

nick-san

Or what about this business about his “little jewel box”?:

aircraft-maintenace

 

FIZZ has hit back hard.  They counterattack at the website ReadTheTrueFacts.com.

Glaucus Research is straight-up about the fact that they are short La Croix and thus benefit if the stock goes way down.  From Wiki’s page about the glaucus atlanticus:

The Glaucus atlanticus is able to swallow the venomous nematocysts from siphonophores such as the Portuguese man o’ war, and store them in the extremities of its finger-like cerata.Picking up the animal can result in a painful sting, with symptoms similar to those caused by the Portuguese man o’ war.

You can find the latest on FIZZ here.  As of this writing, price is $43.32.  Glaucus values it at $16.15.

We’ll be watching this battle with interest, with a refreshing Perrier slim can, made by good ol’ Nestlé, in our hand.

 


Nestle

nestle

In the Swabian dialect, “Nestle” is a small bird’s nest.

So says the Wiki for Henri Nestle.  I was reading about Nestle because I was trying to learn who owns the spring sources for the major bottled waters in the United States.

Here are our popular waters, by sales in billions of $$:

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Dasani and Aquafina are literally just purified municipal tap water with salt added:

Dasani uses tap water from local municipal water supplies, filters it using the process of reverse osmosis, and adds trace amounts of minerals, including magnesium sulfate (Epsom salt), potassium chloride and table salt (sodium chloride).

Nestle Pure Life as I understand it comes from springs in Canada:

Nestlé’s Aberfoyle Springs plant currently bottles two different waters: the on-site Aberfoyle spring water, and spring water tankered in from Cedar Valley Spring in Erin, Ontario. In addition, spring water is botted on-site in Hope, British Columbia. In the United States, Nestlé Pure Life is a purified (filtered) water.

Next is Poland Spring, owned by Nestle.  Vitaminwater I don’t care about.

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and:

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Fiji water is owned by David Brooks’ buddies:

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How about local SoCal water sources, like Arrowhead?:

ArrowHead Mtn Spring Water

Nestle again!

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Here’s an interesting one: Crystal Geyser, the source of which is up on the 395, in bleak country near the Owens Lake, source of LA tap water:

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The owner there is:

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We had to check in with Anonymous Investor on that one:

I never heard of Otsuka before, but just browsed through their 2015 annual report.

Lots of interesting stuff here.  Most of their business (67%) is pharmaceuticals. And the lion’s share of that came from Abilify.  When Abilify went generic in 2015, their earnings dropped off a cliff, although they still managed to stay profitable.

Crystal Geyser is a tiny sliver of their business.  It’s part of their “consumer products” segment. An honor it shares with “Bon Curry,” a line of instant curries–

http://www.amazon.com/Bon-Curry-Gold-180g-pieces/dp/B00BXW9SAM

–and a Gatorade knockoff called “Match”.

http://www.amazon.com/Otsuka-Foods-MATCH-1-5LPETX8-pieces/dp/B010S5VRNK

All together, the consumer products division comprises only 2.8% of the company’s total sales.

So if you buy the stock, what you are getting is mostly the drug business.

Anyway.  If you wish to own fresh springs, the way to do it seems to be to buy Nestle stock, as Joshua Kennon enthusiastically advises.  Nestle also owns Perrier, whose slim cans I’m getting into.

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You should never buy a stock though without looking at a picture of the company’s CEO.  What do we think of Paul Bulcke?

Paul Bulcke

On August 30, 2012, Bulcke claimed that water is not a human right and should be privatized. He was quoted as saying “”If something isn’t given a value, people tend to waste it. Water is our most useful resource, but those using it often don’t even cover the costs of its infrastructure. Fresh water is being massively overused at nature’s expense, but it seems only a global crisis will make us realise the importance of the issue. What is environmentally unsustainable today will become socially unsustainable in the future,

(hmm, that quote is sourced on wiki to this article:

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but I don’t see it).

File this under our ongoing interest in “sources.”