Saturday, October 17, 2009

how few people there really are.

When pondering about things such as the *gasp!* swine flu coming through and killing off a significant chunk of the world's population, it is quite natural to think about the number of people that are out there... roughly 6.79 billion. Which does, on the face of things, seem like a ton of people (or rather, about 525 million tons, if each person weighs much more than of 150 lbs.) ;)

Certainly, there are scores of movies, books, and commentators that say present levels of population growth are unsustainable. The say that we are going to run out of food, water, and space. Frankly, these statements are rather... well- they don't make much sense to me...

Something that I have noticed in my recent travels, is how much land there is out there. Quite literally, when you fly to/from Chicago, Denver, Charlotte, or New York, things look pretty dense; for about 5 minutes. After this minimal amount of time, you will then see a vast wasteland of trees, fields, and a few scattered roads. There is a ton of land that doesn't appear to be utilized, for whatever reason (e.g. lack of resources, zoning laws, greenbelts, or lack of people). In my home state of Kentucky, for example, there is a TON of unexploited land that would be perfect for farming.

As another example, roughly 2/5 of the lot that my home sits on is truely utilized by people (that includes the underground utilities); the rest of it, is simply there to annoy me by forcing me spend time, money, and effort on keeping the yard from living up to it's full potential via primary succession.

To further put this in perspective: given that Texas has 261,797 sq. miles of land (water is not counted), you could fit all of the world's ~6.79 billion people into the state, and they would EACH have just a hair under 1075 sq. feet of space (really, it is pretty simple arithmetic). Roughly, this means that there would be about 25,935 people every square mile and just over 10,000 for every square kilometer.

Frankly, this wouldn't be all that bad. After all, I presently reside in a dwelling where I have much less than 1000 sq feet of my own, personal, living space. Despite living in an area where we have super affordable housing and larger than normal yards, in the case of virtually every person that I know, few have 1000 ft of property per person, let alone living space! There just isn't a need for it.

In fact, if you look here, you would see that Tehran has a population density that is about as bad as the UN of Texas would potentially be. If Texas would then be considered a city, by comparison to the others on the list, it would be the 20th most dense city in the world.

Certainly, while this calculation doesn't give any credence to the needs of people to generate electricity, grow food, or even get water, I think that we will be able to figure out what to do. I am sure that we will figure out a way to utilize all the remaining resources in the world and survive as a species...

Off to the Value Investor's Congress I go. :)

Tuesday, October 13, 2009

Economics, Morals, and Drugs

I think that Milton summed up at least 75% of my feelings toward the drug war.

Dinner after the value investor's congress

As some of you know, I will be in NYC next week for the Value Investing Congress. As of right now, some fellow value investors are planning on getting dinner on Tuesday evening and geeking out by talking common stocks and such- if you are game, email me for details.

To any Seeking Alpha editor reading this, I respectfully ask that you don't publish this. Thanks in advance.

Monday, October 12, 2009

British Government to the market: "we're not idiots"

Apparently, the British government is selling off it's assets, in order to fund more spending. My favorite quote from the article was this: "Of course we're not going to sell at the bottom of the market ... we're not idiots,".

Notice how cut up the quote is; between not having the audio of the statement and the way that the ellipses and comma are inserted, it would be possible for the official to of said:

"Of course we're not going to sell at the bottom of the market, we plan on selling at a premium price! After all, doing anything less would be stupid; we're not idiots, and we fully plan on getting the taxpayers a huge ROIC."

"Of course we're not going to sell at the bottom of the market, we are going to sell 5% above the bottom." Then, 5 minutes later, on a different subject: "Of course we're not idiots, Hitler was a terrible person, we are not going to invade France."

While early intervention in the markets has proved profitable for the taxpayers (a la' TARP), we should certainly be open to the fact that things may or may not work out as hoped. After all, not long ago, management of Southwest looked brilliant, then stupid, and now appear to be pretty average for their hedging of oil.

Obviously, only time will tell how this move will be viewed.

Thursday, October 8, 2009

What is a trillion bucks?

A great video for the lay about inflation... In addition, it is reason why you should do your part to get Rand Paul elected. =D

One has to wonder about the growth potential of McDonalds


In this article you have to wonder about the growth potential of MCD. In light of reading the article's stating that the greatest distance you will drive to get to a McDonald's in the continental US is roughly 145 miles, I realized that in the event I am in the 'Middleofnoweheresouthdakota', I am probably less than 2 hours from squelching a Big Mac attack. While the company can certainly grow in other areas, such as China or even delve into other businesses, a P/E of ~15 and a PEG (on Yahoo Finance) of 1.62 are thought provoking as a mental exercise, but cheap my no means (when compared to other food chains, especially).

Disclosure: I own no shares of MCD. This is not investment advice, only something that I thought interesting enough to pass on.

Tuesday, October 6, 2009

I am scared.



Really, this idea of a 'V' shaped recovery that is being thrown around simply seems to be too good to be true. Hell, if oil isn't completely traded in dollars, that wouldn't help anything either; despite that fact that we prolly deserve the smack in the face that a move of that nature would be. While the above picture certainly isn't any evidence that the market will be going up or down in the future, it is interesting to see how things have happened, when compared with other crashes.

Frankly, I am presently pretty nervous, as there are not nearly as many compelling valuations when compared with virtually any other point in the past year... We were all spoiled with a plethora of companies that were selling for under 5x sustainable cash flow and/or less than cash minus all liabilities. Until sales of antacids fall, in the Kingdom of Value Investment, Cash is King, Pricing Power the Queen, and as always, Jim Cramer is most certainly the Jester.