The Digest #219
Roth IRA Conversions, Net-Nets, Margin of Safety, SpaceX's Triumph, The Dystopia of Smartphones, Sam Zell, UK Bargains, Gregorys Coffee, Free Speech, Dopamine, Addiction, and more ...
Quote of the Week
“Distractions are the assassins of great work. You don’t need more time; you need more focus. Time expands when we eliminate interruptions—our attention, not the clock, ultimately limits what we can achieve.”
Articles
Roth IRA Conversions For Early Retirees, October 9, 2024. If marginal tax rates rise in the coming decades, it could prove advantageous to convert Traditional IRAs to Roth IRAs in 2024 or 2025 while current tax rates remain in place. However, there are many complexities that need to be considered before converting. (The Rational Walk)
, October 8, 2024. It is common to read that Benjamin Graham’s net-net investing strategy is obsolete, but this is not the case. While most net-nets revealed by screeners have serious problems that could make them value traps, the enterprising investor managing small amounts of capital can still employ this strategy successfully today. (Dirt Cheap Stocks)I found George Risk Industries in early 2010. It was a very safe net-net. I wrote about it and watched it for months before deciding that it lacked a catalyst, so I did not buy shares. I revisited George Risk in a detailed article in 2022 but by then it was not a net-net. George Risk traded at $4.25 when I found it in 2010. It trades at $15.23 today. The company has paid $6.55 in dividends since 2010. This is not a spectacular result, but there was very little risk of permanent loss of capital.
Chapter 20 of The Intelligent Investor: Margin of Safety by
, October 8, 2024. One of the reasons Ben Graham liked net-nets is because this is a statistical condition that often proves to be fertile ground for solid returns with minimal risk of loss of capital. In other words, there is a built in margin of safety. Kingswell’s article comments on Graham’s margin of safety concept. Also, he somehow worked in a reference to George Costanza so now you have to click the link! (Kingswell)TreasuryDirect to Bond Buyers: Moving Your Money Could Take a Year by Imani Moise, October 9, 2024. Alternate Link. The only way to purchase United States Savings Bonds is through the archaic Treasury Direct website, but the site also sells marketable securities (Treasury Bills, Notes, and Bonds). The problem is that one cannot sell marketable securities on Treasury Direct and transferring them to a brokerage can apparently take up to a year! There is no good reason to buy Treasury Bills, Notes, and Bonds on Treasury Direct. Many brokerages, including Fidelity and Vanguard, offer Treasury securities at auction with no commission. (WSJ)
Why I Brought My Toddler to Watch SpaceX’s Flying Skyscraper by Tim Urban, October 14, 2024. “It’s hard to wrap your head around SpaceX’s mission. If they actually succeed in putting a single human on Mars, let alone their goal of a million people, it will be one of the major milestones in not just human history but life history—on par with the moment animals first began to walk on land. Whether or not they end up pulling it off, space is officially exciting again.” (The Free Press)
Watch SpaceX Catch A Starship Booster In Air, October 13, 2024. This video shows the reusable Super Heavy booster being caught by “chopsticks” on the launch tower. An incredible feat of engineering that Elon Musk and his team deserve great credit for. For the first time in many years (actually many decades), I am optimistic about the future of human space travel. (YouTube)
NASA’s Europa Clipper Sails Toward Ocean Moon of Jupiter, October 14, 2024. “NASA’s Europa Clipper has embarked on its long voyage to Jupiter, where it will investigate Europa, a moon with an enormous subsurface ocean that may have conditions to support life. The spacecraft launched aboard a SpaceX Falcon Heavy rocket …” (NASA)
8 Ways of Connecting a Smartphone Can't Deliver by
, October 13, 2024. Smartphones promise “connectivity” but often deliver isolation: “Your smartphone can order an Uber driver or delivery pizza, but it can’t give you a glorious sunset or gratitude or a trusted friend—or any other form of genuine connectedness. At best, the phone can serve as a tool. But, too often, it’s a distraction instead. Or—increasingly in the Age of AI—a deception, offering fake constructs that imitate real human connection.” (The Honest Broker)A Message From the Past (Thoughts on Nostalgia) by Morgan Housel, October 14, 2024. Often the past was not as great as we like to remember, which is the valid point made in this article. But sometimes nostalgia is warranted. For example, I purchased a home in the Silicon Valley in 1998 at the age of twenty-five. My income was good but hardly spectacular. I doubt many young people can do the same today. The American Dream was definitely in reach for young people in my generation who worked hard. This is simply no longer true in many parts of the country today. (Collaborative Fund)
Podcasts
Inside the Contrarian Mind of Sam Zell, October 8, 2024. 50 minutes. David Senra talks about what he learned from reading Money Talks, Bullsh*t Walks: Inside the Contrarian Mind of Billionaire Mogul Sam Zell by Ben Johnson. (Founders Podcast)
Bargains in the UK Stock Market, October 7, 2024. 1 hour, 15 minutes. “In this episode, co-hosts Elliot Turner and John Mihaljevic welcome special guest Daniel Prather to discuss investment opportunities in the UK stock market. Daniel shares the investment theses behind three of his favorite ideas.” (This Week in Intelligent Investing)
Gregorys Coffee: From Bean to Dream, October 9, 2024. 1 hour, 38 minutes. “This is a look into what it takes to open up a coffee shop and the economics behind it. We get into what it's like to innovate in an industry where innovation can last a week before a competitor releases the same thing on their menu. Greg shares all of the challenges around going from one store to a second store to scaling into what Gregorys is today.” (Business Breakdowns)
Misinformation and the Three Languages of Politics, October 14, 2024. 1 hour, 2 minutes. Free speech is under intense assault, with would-be censors attempting to justify their actions by claiming that they must eliminate “misinformation” for the sake of society. This is a good discussion regarding threats to free speech. (Econ Talk)
Dopamine and Addiction, October 14, 2024. 2 hours, 34 minutes. “Anna Lembke outlines the risk factors for addiction, including inherited and nurture-based risks, explores the rise of addictions in younger generations, and discusses effective ways to address these issues with children. Additionally, she touches on healthy coping strategies, the evolution of the marshmallow experiment, and provides insights into GLP-1 agonists as a possible tool for addiction treatment. Finally, she reflects on the value of 12-step programs and how she navigates the emotional challenges of her work.” (Peter Attia Drive)
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