Ferg's Finds
This is a short weekly email that covers a few things I’ve found interesting during the week.
Articles
Always worth a read: Horizon Kinetics 1st Quarter 2023 Commentary
Podcast
I love listening to the old crusties who have been through a few cycles: Sam Zell - The Grave Dancer on Private REITs, the Macro Landscape, & Timeless Investing Wisdom
Quote
“You don’t make your fathers mistakes, you make your grandfathers”
Tweet
Nothing new in this Tweet, but good reinforcement none the less.
Charts
It’s not difficult to work out how this gets reconciled.
Print the difference (regardless of where inflation is at).
Contrarian Sign
They nailed the top in Brazil, I’m thinking they’ve probably got this one with a few years of hindsight.
Something I'm Pondering
When does the reality of solar deflation get acknowledged? (and the crazy projections dialled back).
You can only generate so much electricity in the middle of the day before it becomes worthless, which we now see in California and South Australia.
Roughly ~20% is the limit before you send prices negative, with solar at 19.2% of electricity generation in California and 22.4% in South Australia (5.2% large-scale solar and 17.6% rooftop solar).
Recommend reading this article given it was written in July 14, 2021:
The lurking threat to solar power’s growth
“So far, heavy solar subsidies and the rapidly declining cost of solar power has offset the falling value of solar in California. So long as it gets ever cheaper to build and operate solar power plants, value deflation is less of a problem.
But it’s likely to get harder and harder to pull off that trick, as the state’s share of solar generation continues to climb. If the cost declines for building and installing solar panels tapers off, California’s solar deflation could pull ahead in the race against falling costs as soon as 2022 and climb upward from there, the report finds. At that point, wholesale pricing would be below the subsidized costs of solar in California, undermining the pure economic rationale for building more plants, Hausfather notes.”
I hope you’re all having a great week.
Cheers,
Ferg
P.S. With all the craze around ChatGPT, I thought I'd have a play with it and some of its offshoots (finchat.io being the most promising) to see if it could be useful in my investment process.
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