Related previous post: Arthur Schopenhauer quoteHorizon Kinetics: Utilities - Running on Empty: Major Disruption Ahead (LINK)
The attached white paper was originally published in late 2014. However, we feel it sufficiently relevant, despite the modest 10% to 15% decline since year-end, such that it continues to bear reading. The Utilities sector was among the best-performing of 2014. Yet, it is not much represented in Horizon Kinetics strategies, despite the sector’s 3% weight in the S&P 500 Index®. This is not an oversight.
Larry Page on Google and Alphabet (LINK)We believe the Utilities sector is in the midst of a largely unrecognized bubble—a valuation correction of the scale we anticipate has never befallen it before. The source of the valuation risk, aside from any substantive increase in interest rates—which would be no small matter—is a threat to demand. The largest (of a number) of drivers for this drop is the emergence of solar power as a viable source for a meaningful share of the electricity supply. One need only look at the European experience (particularly in Germany) to preview what might occur in the United States as solar power adoption increases.
The SEC filing for the Google announcement of Alphabet (LINK)
Alphabet Lets Google Chase Moonshots and Stay Profitable (LINK)
In an interview with The Financial Times in October, Page said there’s no precedent for the company he wants to build. But it seems he’s taking a page or two from the most successful investor in Wall Street history: Warren Buffett, who runs the vast conglomerate Berkshire Hathaway.
Indeed, Page pointed to Buffet as someone who knows how to lead the kind of company he and Google co-founder Sergey Brin have in mind. And according to The Wall Street Journal, Page went even further in December during a meeting with top shareholders, saying Berkshire Hathaway—which spans everything from insurance to underwear to aerospace supplies—exemplifies how a large, complex company should be run. “Mr. Buffett has a cadre of CEOs running operating companies and doles out capital from the holding company to these businesses based on their performance each year,” the Journal wrote.
Fred Wilson on Google and Alphabet (LINK)China Moves to Devalue Yuan (LINK)
Books of the day (since I felt the urge to watch the Pale Blue Dot video a few times last night):
Pale Blue Dot: A Vision of the Human Future in Space
The Demon-Haunted World: Science as a Candle in the Dark
“Science is not only compatible with spirituality; it is a profound source of spirituality. When we recognize our place in an immensity of light‐years and in the passage of ages, when we grasp the intricacy, beauty, and subtlety of life, then that soaring feeling, that sense of elation and humility combined, is surely spiritual. So are our emotions in the presence of great art or music or literature, or acts of exemplary selfless courage such as those of Mohandas Gandhi or Martin Luther King, Jr. The notion that science and spirituality are somehow mutually exclusive does a disservice to both.”