Posted on in Links

Links – 009 (Sunday)

1. The number of 15-year-old male students in Sweden who don’t speak the mother tongue jumped from 5.7% in 2016 to 11.1% in 2019. (Article in Swedish, but Google translate does a good enough job)

2. BART’s sharp turn in Oakland was built to avoid a hardware store.

3. Duck feet!

4. Decoupling, US-China edition.

5. Outsiders, on the top 8 CEOs of the 20th century by value returned to shareholders.

…a very select group of men and women who understood, among other things, that:

  • Capital allocation is a CEO’s most important job.
  • What counts in the long run is the increase in per share value, not overall growth or size.
  • Cash flow, not reported earnings, is what determines longterm value
  • Decentralized organizations release entrepreneurial energy and keep both costs and “rancor” down.
  • Independent thinking is essential to long-term success, and interactions with outside advisers (Wall Street, the press, etc.) can be distracting and time-consuming.
  • Sometimes, the best investment opportunity is your own stock.
  • With acquisitions, patience is a virtue… as is occasional boldness.

If you’re skeptical:

…on average they outperformed the S&P by over twenty times and their peers by over seven times…

Posted on in Blog posts

Airframe IP spillover effects into engines

From a working NBER paper by Walker Hanlon and Taylor Jaworski:

Our main empirical analysis documents two patterns consistent with the theory. First, after IP protection became available to American airframe producers, the rate of improvement for key performance measures accelerated. This is apparent either when focusing only on changes within the United States over time or comparing the United States to other countries. Prior to 1926, innovation in airframes was typically slower in the United States than in comparison countries; after 1926, the rate of innovation was faster. This suggests that providing IP protection had a positive effect on technological progress in airframes, as predicted by the theory. Second, we find that the rate of innovation in aero-engines slowed after 1926. Again, this pattern appears when looking at the United States over time, as well as relative to available comparisons countries. Since there was no change in the availability of IP protection for engine technology, we attribute this slowdown in the United States to the spillover effects of granting IP protection to airframe producers.

Posted on in Links

Links – 006 (Monday)

Czech-Chinese relations.

Mark Fisher on ancient texts in modern politics.

The strangeness of Berlin. “So what’s attractive about Berlin is precisely what’s missing in the cities that are beautiful. It’s not perfect and it cares not to be. Walking through its streets and thinking about the place is unsettling; you don’t know if something strange and unfortunate is going to happen next. That gives it an incredible vibrancy, a freedom that comes from knowing that it doesn’t have to be gorgeous or be beholden to the aesthetic past.”

Stock markets in the rise of the Nazi party. “After the summer of 1932, the rising tide of Germany’s recovering economy lifted all boats. Following the “seizure of power,” investors may have cheered the appearance of a more broadly based government. In addition, those firms that supported the Nazis financially or had business leaders with strong links to the NSDAP on their boards experienced share-price increases many times larger than the general rise in the market… The modal return on Nazi-affiliated firms was about 8 log points higher than for unconnected firms.”

Posted on in Blog posts

Who killed the railroads?

This has been bothering me for a while now. I don’t fully buy the argument that cars outright destroyed the US railroad industry between 1900-1930. Passenger rail, maybe, but railroad conditions and use had steeply declined by the 1920s, (less than?) a decade after the Model T and the implementation of the assembly line at Ford(1). By the time the rails were being ripped out to build roads, they were in terrible, sometimes unusable, condition.

I haven’t read a whole lot on the development of trucks, but my assumption is that cargo trucking didn’t develop as fast as commercial auto. Roads were pretty bad until the 20s, when Thomas Harris MacDonald took over the Bureau of Public Roads. It couldn’t have been the shipping container, either, because that wasn’t widespread until after the 1950s.

So, what gives? What additionally led to the decline of railroads? Did their use decline even during World War I (adjusting for wartime passenger rates)? Did road building actually speed up the decline of railroads much more than I had assumed? Is my understanding of the whole thing wrong?

If you have any recommendations to answer any of the above, please let me know!

(1) Contrary to popular belief, Ford did not invent the assembly line. The idea was implemented by William Klann, a Ford production manager, after visiting a Chicago butcher shop.