Interesting Research

[BUM]

I enjoy researching things I enjoy, or things that bug me. I can't stick with the DD required for some new widgit manufacturer. Also I have a problem liking stocks relating to stuff I used to sell, e.g. I used to sell memory chips so I THINK I know something about the memory business - so I spend too much time with Micron and Celestica. Here is what I'm pouring over now.

Battery technology - In the 70's I lived in Danbury, CT. A guy told me they were going to build a Duracell plant there and that some day homes would have 100 times the number of batteries installed today. I thought he was nuts - now look. So the technology is advancing. More power (amp/hours) in smaller, lighter, cheaper packages. Zinc, Alkaline, Lithium Ion, Nickel Metal Hydride are all under pressure to be better and cheaper. Too early for picks yet, but ABAT.OB is currently under my microscope. Any others?

Submarine signs - My dad is consulting for an outfit making glow-in-the-dark paint for signage. I'm told the navy spec is 3 days for a sign in a stairwell to remain visible during an outtage. No problem for this stuff. My brother got hold of some of this goo and painted on his deep sea fishing lures... works for that too!

Hurricane Bonds (Sidecars?) Re-insurance - I'm upset by the new high wind and hail insurance premiums I have to pay for our NC townhouse-by-the-sea. How can I invest in the the other side? These insurers are taking lots and lots of my hard earned pre-ER cash AND increasing deductibles by 5X! Gotta get some of that back!

 

[Brat]

Pcp

One firm I have known for years is Precision Cast Parts. They have matured into a well managed company that just joined the S & P. While the structural (large parts) part of the business is their base, I see growth going forward in small parts.

Disclosure: I hold no stock in this business (my mutual funds may, but not me). I have had contact with the business but not for several years.

 

[Nords]

Too early for picks yet, but ABAT.OB is currently under my microscope. Any others?

Tempting. My nephew the Army Ranger tells me that during the Iraq invastion the logistics system couldn't keep up with the battery demand. Before going out on a mission just about everyone would dump their installed batteries (no matter how new) and put in a fresh set-- GPS units, transceivers, night goggles, whatever. Any manufacturer with a GSA or military contract will make money when the next invasion ramps up.

Submarine signs - My dad is consulting for an outfit making glow-in-the-dark paint for signage. I'm told the navy spec is 3 days for a sign in a stairwell to remain visible during an outtage. No problem for this stuff. My brother got hold of some of this goo and painted on his deep sea fishing lures... works for that too!

I've been out of the business for a while and my knowledge may no longer be applicable (we certainly needed to "lighten up", so to speak) but any glow-in-the-dark system usually failed the submarine test in at least one of two ways: it gave off detectable levels of radioactivity (which interfered with monitoring for the nasty stuff) or it was an atmosphere contaminant. You couldn't even a wristwatch with a radium dial onboard. So phosphorescent & fluorescent were usually out of the question. New technology would have a number of intriguing applications.

A typical submarine qualification exam consists of donning an air-fed mask, putting its bag over your head, and giving the XO a guided tour of the boat while showing him what damage control equipment is within your reach. If you don't know where the air-supply manifolds are then you can't plug into them and get enough air to keep talking, and you have to be able to do everything by feel with your memorized knowledge of what's where. The practice will engrave its knowledge pretty deeply into your cerebral cortex-- I'm still able to do this today despite the fact that both of my USETAFISHs are razor blades. So submariners generally don't need no lights.

Hurricane Bonds (Sidecars?) Re-insurance - I'm upset by the new high wind and hail insurance premiums I have to pay for our NC townhouse-by-the-sea. How can I invest in the the other side? These insurers are taking lots and lots of my hard earned pre-ER cash AND increasing deductibles by 5X! Gotta get some of that back!

Berkshire Hathaway. Sure, it's always expensive but it's still selling below intrinsic value. Alice Schroeder's biography of Buffett will be out sometime this year and the ensuing publicity will bounce the price anyway.

 

[BUM]

Hi Nords!

Yup! In The Graduate it was "Plastics", now its batteries. From dump trucks to hearing aids, people change them more often socks. I'm hooked on the technical aspects.

The glow-in-the-dark-signs... I called the old man, he said carriers not subs, sorry.

What about Hurricane bonds, Cat bonds?...anyone?...anyone?

 

[brewer12345]

I would stay away from cat bonds. They are almost certainly confined to the 144A market and there is no way you will be able to properly understand and scope out the risk, unless you happen to be a P&C actuary with access to the latest cat model software.

If you want in on this game, there are two possibilities. One is to buy catastrophe reinsurers. Berkshire fits this definition, as do many Bermuda-domiciled companies that are publicly traded. But take a look at their stock charts in late 2005 before you conclude this is a great idea.

The other possibility is to buy shares of primary insurers doing a lot of cat-exposed business. They don't really have the pricing power they need, but they are really cheap. I have been sniffing over TCHC (heavy exposure to Florida homeowners) and NPTE (same, but with more diversification into attractive specialty niches). Less risky would be ALL, since nothing short of a meteorite strike would likely impact them. But the upside would be less.

 

[BUM]

I would stay away from cat bonds. They are almost certainly confined to the 144A market .

Confined...Not available to the retail market. That explains why I could never get to them. Thanks.