Ratlinks: September 2019 - Issue #9
Manifest Destiny | Beck | Tariffs! | White Claw | Fantasy Draft Advice | Art of Noticing
September is here.
That means summer is “officially” over and white pants are no longer acceptable. Please put said pants back into cold storage before the fashion police are called. Stop trying to make winter white a thing, Gretchen.
This months issue builds off the central theme that:
In the world of long tail social media, network effects are much less important than interesting networks. - Cal Newport
Thank you for opening this edition and for being a member of the RatLinks community.
Topics this month are varied, hopefully you find one or more compelling:
The American West
Concert Review:
Beck + Cage The Elephant
Do laws apply if you are drinking hard seltzer?
Brief Fantasy Football Draft Advice
Mazel of the Month
Tariffs! So Big So Beautiful!
The Art of Noticing
Goodwill Punting
According to the internet, this issue should take 15 minutes to read in its entirety.
As always, you can return to this issue and find all previous issues at ratlinks.com
NATIONAL PARKS: AMERICA'S BEST IDEA
Go west, young man. Manifest destiny, catch it. Fifty-four forty or fight! There’s a land grab coming. At least that’s what Speilberg told Fievel.
First to Vegas. Played a bit of tennis, visited the Neon Museum and a local public library. Textbook. That’s how you DO Vegas. Boom!
Next we drove towards Zion National Park.
Ken Burn’s documentary claims national parks are America’s best idea. I for one was skeptical.
Have you tried fries? (Actually is that a French invention?)
Have you ever tried cheese fries? (Did Poutine originate in Canada?)
Whatever. You get the idea.
America has a lot of great inventions, but are national parks really the best?
Yes.
Yes.
A thousand times, yes!
In a world of constant partisan bickering, there is one middle ground we can all stand together on. Nature.
Nature is truly awe inspiring, awe filling, really awesome. In short, nature is neat.
$80 buys an annual parks pass granting admission for two. If you are debating getting a pass, instead estimate the cost of Disney World, one day skiing or even just a night out for cocktails.
If you do buy a pass, please note the following:
At sites that charge vehicle entrance fees, the annual pass will cover entrance for one car. The pass covers two pass owners on foot who have signed the pass. If arriving on motorcycles, remember: one signature, one motorcycle; two signatures, two motorcycles.
The National Park Service celebrated its 103rd birthday this past Sunday, August 25. On that day in 1916, President Woodrow Wilson signed the National Park Service Organic Act into law, thereby establishing the National Park Service (NPS).
The National Park System includes 419 sites, covering more than 85 million acres throughout the country. In addition to 61 national parks, the system includes national monuments, national historical parks, national seashores, and more. The newest national park was established in February of this year, with the upgrade of Indiana Dunes from national lake shore to national park.
The NPS is managed by the Department of the Interior, previously headed by Ryan Zinke. Zinke resigned last December after he came under at least 15 investigations, including: inquiries into his connection to a real estate deal involving a company that Interior regulates; whether he bent government rules to allow his wife to ride in government vehicles; and allowing a security detail to travel with him on a vacation to Turkey at considerable taxpayer cost.
Zinke’s replacement is David Bernhardt, who operates a similar agenda as Zinke. Bernhardt differs from Zinke in one way; he carries around a conflict of interest card.
WOW! You are good at scrolling.
Here is a quick summary:
National Parks are amazing. You should make an effort to visit or at least help protect our National Parks. If we allow our greatest national parks to fall into disrepair or be treated as mineral deposits we are squandering one of America’s greatest ideas.
“There is a delight in the hardy life of the open. There are no words that can tell the hidden spirit of the wilderness that can reveal its mystery, its melancholy and its charm. The nation behaves well if it treats the natural resources as assets which it must turn over to the next generation increased and not impaired in value.” - President Theodore Roosevelt
Work with Patagonia to help support our National Parks
Concert Review:
Beck & Cage The Elephant at Forest Hills Stadium: 8/17/2019
Forest Hills Stadium is one of New York City’s best venues. If you haven’t been, you should. Everything works.
The former home of the US Open is an outdoor space rich in history, less than 15 minutes from NYC’s Penn Station via the LIRR. With not a bad seat in the house, the crowd is as raucous as any you find in New York and the bands know it. As a warm summer breeze fills the air, the E train passes by in the distance feeling worlds away.
Thanks to a good friend, I was able to not only see the show, but also experience the after show BBQ with the band.
My night began with a 20 year old usher, dressed in tennis whites, carrying a wooden tennis racket, leading me to a row of toilets. Upon arriving at a handicap port-a-potty, he turned saying “this is where I leave you”, pointing to a door that doubled as the entrance to my seat.
Cage The Elephant
Cage The Elephant co-headlined the show. If you don’t know this band, you should, these guys wail.
Lead singer Matt Shultz is a rock star’s rock star, once described as a potential love child of David Bowie and Mick Jagger.
Cage brought the heat, at first thought to be the reason for the constant wardrobe changes. In reality, the lead singer was progressively removing multiple layers of clothing, concluding with a nearly naked lead singer crowd surfing into the middle of the roaring crowd.
BECK
Beck has been around forever and for good reason. Beck is a generational talent who transcends multiple genres: rock, rap, country even dance. He opened with “Loser” a song that MTV deemed “buzz worthy” over 25 years ago.
You may also know Beck from the time he and his “crew” once tried to party with Tyga. It didn’t go so well.
As Beck closed with “Where It’s At”, enough confetti was shot into the crowd that it looked like light flurries. Any attempt to have a snowball fight was quickly dashed as a warm gust reminded everyone, it doesn’t snow in August in New York.
Photo credit: Ellen Qbertplaya c/o BrooklynVegan.com
Trains, Trains or Automobiles
After the show, three routes home presented themselves:
LIRR
Subway
Taxi, Uber or Lyft
The LIRR appeared to be the best, as both the fastest and cheapest route home. Unfortunately, it was not. An issue with the third rail, caused an hour train stoppage. While the delay began to irritate others, I instead thought through the irritation. Quickly realizing with my family already asleep, this stoppage only slightly delayed me getting to bed. Realizing my only objective was simply to get home and get to sleep, I let out a relaxing breath.
Upon disembarking from the train, this objective was further complicated. I bumped into a co-worker who invited me to get a drink. Within minutes of arriving at a bar, we ran into my cousin. Both these events caused me to stay out much later than I should have, but I digress.
Mass transit and aging infrastructure are a growing problem with no clear solution in sight.
As New Jersey’s rail-pocalypse grows ever closer, it is worth re-highlighting the April edition of Ratlinks - “April O'Neill For Real?”
Doomsday is coming for New Jersey rail riders.
The Hudson River Tunnel the connects almost all rail traffic between NJ & NY is crumbling. If just one of the tunnels goes down, traffic would go from 24 trains an hour to six.
The Hudson River Tunnel connects 20% of America’s GDP. If it couldn’t run, America would lose $100 million every day, according to the Northeast Corridor Commission. At the broadest level, the national economy would lose $16 billion over a four-year span, equivalent to the loss of 33,000 jobs a year.
If you are a New Jersey homeowner, a tunnel failure will cost the state $22 billion in property values.
Non-Sequitur
Alco-Pop
No one drinks beer anymore.
Alcoholic seltzers are all the rage, led by top selling brand White Claw.
The success of White Claw, I believe is driven by their unofficial slogan (see below):
If you work for a content hungry media company in need of a new move idea, look no further.
Take the bizarrely popular concept of The Purge, but in this lawless version, everyone is also drunk off seltzer.
Coming this winter to a theater near you: THE BINGE
Draft Day
For those looking for a fantasy football tip, heed the wise words of Hall of Fame coach and commentator John Madden:
“Usually the team that scores the most points wins the game.”
While my knowledge of football has declined over the years, I still know a thing or two.
In middle rounds of a snake draft, pick up conductor John Williams. That guy knows how to score.
Mazel! of the Month
A mazel of the month to:
Former Rhode Island Country Club Champion, NYC corporate league basketball MVP and universal life minister, Father Drew Harker on his engagement to the always lovely Clare Lugli.
Yana and David Ratner on the birth of their first child, the extremely handsome, Michael “Micki” Ratner.
Mazel!
Please email: evan@ratlinks.com with subject MOTM for your mazel to be featured.
How Tariffs Work / Why Tariffs Might Not Work:
This month there was a lot of hullabaloo about China devaluing their currency, the Yuan. As a result of increased US Tariffs, the Yuan/USD exchange rate moved past the significant 7 Yuan per US Dollar level.
Do you understand enough about big beautiful tariffs in order to have a quasi-superficial, yet tremendous conversation at a fabulous cocktail party?
Why does it matter how many Yuan it takes to buy a dollar?
If you want to know more read on, if not skip this section.
The entry below is adapted from Zachary Karabell’s article: Listen, Here’s Why the Value of China’s Yuan Really Matters originally published on Wired.com
Currency moves are a wild card that few have focused on, which have the power to nullify the economic consequences of Trump’s tariffs and intensify the political conflict
Here’s the basic math:
If a US importer buys $100 worth of goods from China when the exchange rate is 6.3 yuan to the dollar, that’s 630 yuan.
If the exchange rate changes to 7, as it just did, then the US importer only needs $90 for the same purchase. If that import is then subject to a 10 percent tariff, the two cancel each other out and the cost to the importer remains basically the same.
The recent fall in the value of the yuan was interpreted by Washington as a deliberate move by Beijing to nullify the threatened new tariffs.
If exchange rates move enough, the tariffs become largely symbolic, acting as a tax on American importers but not inflicting enough harm to force American companies to move production out of China, or to prompt the Chinese government to meet US demands.
Read This, Then That
WOW you read that book. I’m so impressed - No One Ever
In an effort to be more effective and efficient, rather than just highlight a book in the hopes you read it, I will now attempt to link to an article, panda or podcast about the book in order to save you precious time.
It is not that we have a short time to live, but that we waste a lot of it - Seneca
With that said, do you realize you aren’t really paying attention?
You lack focus. You are distracted.
Who isn’t.
Did you read the above paragraph?
Sure you did.
Did you notice the word panda 🐼 ?
That is why, this month, I read the Art of Noticing by Rob Walker.
The Art of Noticing is a guidebook of sorts. The book has 131 activities to help you “notice your surroundings, to be mindful of the world you’re navigating, and to give yourself permission to slow down and just … observe.”
One of my favorite activities from the book, is the game Buy, Burn or Steal.
It works best at a museum. Upon entering a gallery you and a friend each pick three works: one to buy, one to burn, one to steal.
“There’s nothing more important than the stuff you notice that no one else does,” Mr. Walker said. “That’s where every single innovation begins; that’s where all creativity begins. It’s honoring what you notice, what you tune into and what you care about.”
Too busy to read the book? Read any of these comprehensive articles about the book instead: TinkerLab | NYTimes | Newsweek
As always, you can see all the books I am reading here.
Last month our book club read Raised In Captivity by Chuck Klosterman, inspiring the below short story entitled Goodwill Punting.
Goodwill Punting
Do you ever think about the act of stealing?
Not philosophically. This is no morality debate.
Actually physically taking something that doesn’t belong to you.
Would you ever do that?
Do you ever think about joining a band of thieves for a little midnight smash and grab?
What about handing a note to a bank teller with pantyhose over your face or maybe just picking someones pocket?
Of course not. Right? Why would you ever do that?
What if there is no way for you to get busted? What if there was no crime, no downside and your success would be the cause of celebration?
We are talking newspapers articles, magazines covers.
How does that all sound?
Would you do it then?
I only have one question for you:
Do you know what happens when someone overpays for something in a really big way?
Do you know what goodwill is? No, I'm not talking about the biblical feeling towards your neighbor.
Let’s start with a fundamental question - How do you properly value anything?
Tell me, what is Coca-Cola really worth? What about Rockefeller Center? The Mona Lisa? Get the idea. Let’s get to work.
First create a singular concept that glows red hot. A real super nova of an idea. One that if you stare directly in to could and will cause blindness.
You know how mosquitoes are drawn to the light only to get zapped.
Good. That’s the ideal.
Build a buzz so big and bright that it draws in its surroundings. Becoming all anyone thinks about, focuses on, covets.
The heat it gives off, those intangibles, cry out for someone big and important to call and not just say I want it, but I need it.
You push back. This asset is unique. It’s one of one. It’s paradigm shifting. It doesn’t belong as part of conglomerate.
They promise not to screw it up.
The dance continues, both side aware of the futility and eventuality.
Leading to the purchaser paying well north of the functional value. They are happy to. They want it all. The heat and light that is being radiated. The extra. They need it all.
They promise not to screw it up.
It might be expensive, it might be dilutive to earnings, it might not fit classical valuation frameworks. It does not matter.
Excuses will be had to justify the purchase. The acquiring board will claim it will help their market multiple. The purchase will allow access to new untapped markets with unlimited potential; millennials, internet of things, EMEA, whatever the buzzword of the day is.
All that excess, all the intangible heat and light created, that's goodwill ready to be accounted for, amortized over time and eventually written off.
What happens next?
After a period of time, you up and leave, fulfilling your commitment, taking your new found money and going home.
Soon the super nova doesn’t glow as bright.
Maybe the buyer realizes his folly.
Maybe, he, a representative or three get fired.
Maybe you get offered his job.
You politely decline.
Knowing surely someone has to take the blame and that someone shan’t be you.
What about the money? Does anyone pay the money back?
This is where it gets good.
Whose money are we talking about?
You mean all the value paid for the transitive property. The transfer of the heat and light to the duller object.
Goodwill isn't real. It's just an accounting convention, a ledger entry, that can be reversed.
It once was real money, but not anymore. It's excess that vanished into someone’s pocket at a point in the past. As long as fraud wasn't involved, hopefully you are wearing those pants.
If you can make a few billion dollars disappear off a balance sheet of a multi-national company, you deserve to be celebrated. You are better than Houdini.
When the rest of us ride the train home from a tedious job, fantasies about stealing a candy bar are quickly dashed. Instead, our focus returns to an article about a mega merger that will breathe new life into a stogie corporation.
The joke is on us.
Next week we will be discussing the binomial method for option valuation. Please read pages 150-225 in the Brealey and Myers 10th edition textbook.
The students stood up and filed out of class wondering aloud - maybe there is some value in taking fundamentals of finance this semester.
