Ferg’s Finds

This is a short weekly email that covers a few things I’ve found interesting during the week.

Article(s)

Physical constraints will matter at some point, particularly when a number of the constraints below have Chinese pinch points.

Last Rounds? Status of Key Munitions at the Iran War Ceasefire

America’s AI Build-Out Hinges on Chinese Electrical Parts

Almost half of the US data centers planned for this year are expected to be delayed or canceled. One big reason is the shortage of electrical equipment, such as transformers, switchgear and batteries.

Though few companies are eager to talk about it, the US has been outsourcing its manufacturing to other countries, primarily China, for decades. That has contributed to a significant shortage of electrical components in the US, says WoodMac’s Boucher.

Gas turbine prices soar 195% as market faces supply-demand crisis

Each blade is grown as a single crystal of nickel superalloy, pulled through a vacuum furnace at 3 mm per minute. A set of blades costs $600,000 and takes 90 weeks to grow. The same metallurgy powers modern jet engines.

Transformer troubles: manufacturing and policy constraints hit US transformer supply

Utilities are, therefore, increasingly turning to the import market to meet project timelines. Today, imports account for an estimated 80% of US power transformer supply and 50% of distribution transformer supply.

Podcast/Video

Loved this: Legendary Trader Paul Tudor Jones on AI Risk, Bubbles and Buffett

Putting Craig and Luke together was brilliant: Shovels, Not Spreadsheets: The Resource Crisis Wall St. Isn’t Pricing – Luke Gromen & Craig Tindale.

Quote

“I've said repeatedly that the 2-year Treasury is what determines the Fed funds rate, not the other way around. And I think we have a chart of the Fed funds rate and the 2-year Treasury yield simultaneously going back to 2004. And it's very obvious that the Fed follows the 2-year.”

-Jeffrey Gundlach (We Don’t Know’ Signals Rising Fed Uncertainty)

Tweet

With the context above, what Paulo is pointing out becomes even scarier.

I’ve seen this pattern over and over, and when it breaks, it breaks big.

This was another great Tweet that points out an issue with this narrative: America Is in the Middle of a Stealth Manufacturing Boom -WSJ

Charts

A bull market that few are looking at.

Something I’m Pondering

I’m pondering if Wall Street will successfully unload all this on retail this year.

The $48 Billion AI IPO Squeeze Wall Street Isn’t Warning You About

S&P Global, FTSE Russell, and Nasdaq are all actively considering “fast-track” rules that would add SpaceX, OpenAI, and Anthropic to their major indices within days of their IPO – bypassing the traditional 12-month seasoning requirement that currently blocks newly public companies from immediate index inclusion.

SpaceX IPO (this was also a great piece: Nasdaq’s Shame)

The Texas reincorporation strips away Delaware's fiduciary protections. Controlled-company status on the Nasdaq eliminates independent board requirements. And retail is being offered up to 30% of the offering (3x the normal allocation) because the institutions who actually do the math are quietly stepping away.

- George Noble via this Tweet

OpenAI IPO: OpenAI will allocate IPO shares to retail investors as it preps for debut, CFO says

Venture Capital for Everyone: USVC - a single basket of high-growth venture capital, for everyone.

But ordinary people can’t invest until it’s old, until it’s no longer interesting, until everybody has access to it. By the time a stock IPOs, most of the alpha is gone. The adventure is gone. Public market investors are literally last in line.

This problem has become farcical in the last decade. Startups are reaching trillion dollar valuations in the private markets while ordinary investors have their noses up to the glass, wondering when they’ll be let in.

-Naval via this Tweet

All I know is I want nothing to do with any of this and am happy hanging out in commodities and emerging markets!

Hope you are all having a great week!

Cheers,

Ferg

P.S. I wrote this piece to outline a few of the rules I stick to religiously to protect myself from a dose of FOMO…