Good Reading -- February 2021
Philip C. Ordway
Facts & Figures
“At least 3,000 preliminary daily record cold temperatures, including cold daily highs and cold overnight minimums, were tied or broken at sites that have at least 75 or more years of data during the Feb. 12-16 period, NOAA found. Of these, there were 79 all-time cold records.”
Approximately five minutes — the amount of time ERCOT grid operators in Texas had to respond, just before 2:00 AM on Feb. 15th, to avert a total collapse of the system that would have left the entire state without electricity for weeks or months. (Source: ERCOT/ WSJ)
One of the core principles of market regulation in the U.S. is transparency—give investors information and let them decide. The GameStop drama was nothing if not transparent.
“You can sell garbage to the public as long as you say to the public, ‘This is garbage and you’d be an idiot to buy it, but would you like to buy it?’” said Harvey Pitt, a former SEC chairman.
What appears to have happened in recent weeks is that a massive wave of retail investors answered, “Yes,” to that question.
The problem, all in all, is not related to disclosure. The problem is related to the question of whether the public can be protected against itself by emphasizing the absurdity of the price level for second- and third-grade stocks which have had enormous advance in price, with very little value behind them in many cases. I don’t know if there is any solution. I don’t know how gamblers, people who call themselves investors but who are really speculators, can be protected against the combination of greed and folly. That is my favorite three-word phrase, “greed and folly.” The S.E.C. is just beginning some hearings to see whether the method of offering new securities could be changed somewhat. I suppose they would have to say in big red letter words, THIS STOCK IS NOT WORTH WHAT IT IS SELLING FOR. I don’t know if that would make any difference, either. They have the ability to sell the stock, and somebody says, “What the hell, it is going up anyway."
Ben Graham, in 1972, courtesy of Jason Zweig
I hate this luring of people into engaging in speculative orgies. [Robinhood] may call it investing, but that’s all bullsh*t.
The Big Picture: The Fight for the Future of Movies — This is an engaging history of the film industry with quite a few interesting details. (Thank you to Adam S. for the gift!)
The Grid: The Fraying Wires Between Americans and Our Energy Future — I’d been meaning to read this for a while and just happened to get it from the library in early February. Quite the timing. As a non-expert this book raises some questions, but it also does a good job explaining the history and nuance of the situation. It’s a crucial topic, as we’ve just seen. See also this article, The Texas Freeze: Why the Power Grid Failed, or this one about the massive cumulative increase in electric bills in recent years, even before the crazy storm-related price spikes. And score another one for unintended consequences and the power of incentives.
One Up: Competition, Creativity, and the Global Business of Video Games — This is a good piece of business history and research. I’d recommend it to anyone interested in the industry but also to others more interested in a good look at the development of a specific sector. (I picked this up thanks to this recommendation; more resources here.) Articles
Why Does the Pandemic Seem to Be Hitting Some Countries Harder Than Others? — This is an excellent article addressing one of the central mysteries of the Covid-19 pandemic. Importantly, it does not take an arrogant, omniscient angle; just the opposite. The covid-19 pandemic will teach us many lessons—about virological surveillance, immunology, vaccine development, and social policy, among other topics. One of the lessons concerns not just epidemiology but also epistemology: the theory of how we know what we know. Epidemiology isn’t physics. Human bodies are not Newtonian bodies. When it comes to a crisis that combines social and biological forces, we’ll do well to acknowledge the causal patchwork. What’s needed isn’t Ockham’s razor but Ockham’s quilt. Above all, what’s needed is humility in the face of an intricately evolving body of evidence.
The Terrifying Warning Lurking in the Earth’s Ancient Rock Record — The author should complain to whoever wrote the atrocious title. There is plenty to argue with here either way, too. But in this long article there are plenty of thought-provoking points.
Astronomer Avi Loeb Says Aliens Have Visited, and He’s Not Kidding — Another terrible title for an interesting (if imperfect and somewhat controversial) subject and article. I haven’t read the book in question but this interview is intriguing in good ways and bad. My sources — yes, I have astrophysicist sources! — tell me there is a whole lot more to this on both sides.