Interesting Finds: Issue #24

Godzilla, YOLO Investing and Grape-Nuts

Each week, I curate and spotlight the most curious content I find. This week highlights 3 Interesting Finds about Godzilla, YOLO Investing and Grape-Nuts.

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Godzilla vs Nuclear War

Godzilla is an incredible 67 year old Japanese franchise that is known around the world. It all started with the original movie release in 1954 and since then has grossed over $1.3B in the box office. In 1996, the franchise received a Lifetime Achievement award from MTV showing how far it’s came from the limited release in Japan 42 years prior. Another fun fact is that it is the world’s longest running film-franchise with 30 movies over 67 years.

If you want to nerd out more on the box office performance of each film since 1954, checkout The Box Office History of the Godzilla Franchise.

However, the real Interesting Find here is the origination of Godzilla which was inspired by the nuclear bombings of Hiroshima and Nagasaki. From Wikipedia:

With the nuclear bombings of Hiroshima and Nagasaki and the Lucky Dragon 5 incident still fresh in the Japanese consciousness, Godzilla was conceived as a metaphor for nuclear weapons. Others have suggested that Godzilla is a metaphor for the United States, a giant beast woken from its slumber which then takes terrible vengeance on Japan. As the film series expanded, some stories took on less serious undertones, portraying Godzilla as an antihero, or a lesser threat who defends humanity. Later films address themes including Japan's forgetfulness over its imperial past, natural disasters and the human condition.

Furthermore, there was this::

To emphasise the monster's relationship with the atomic bomb, its skin texture was inspired by the keloid scars seen on survivors in Hiroshima.

Grape-Nuts vs. 2021

Everywhere you look these days, there’s some consumer product shortages whether it be computer graphic cards or Playstation 5. The latest victim is Grape-Nuts cereal. Yes, that Grape-Nuts.

According to CNN, there is a serious shortage of Grape-Nuts due to supply chain impact globally:

Though sales of cereal in general were struggling for years, they've grown during the pandemic as customers eat breakfast at home and reach for comfort foods.

From 2015 to 2019, the US ready-to-eat cereal market dipped between one and two percent each year, according to data from Euromonitor International. From 2019 to 2020, the market grew by nearly 20% to about $10.6 billion.

The Grape-Nuts shortage comes as demand for consumer goods has put a strain on supply chains, leading to shortages.

All that said, people who can't get enough of Grape-Nuts can breathe a sigh of relief. Fans can be rest-assured that "we have absolutely no plans to discontinue Grape-Nuts cereal," DeRock said.

Martin Shrekli vs YOLO

Martin Shkreli is a convicted felon and ex-CEO of a pharmaceutical company. Quick primer from Wikipedia:

In September 2015, Shkreli was widely criticized when Turing obtained the manufacturing license for the antiparasitic drug Daraprim and raised its price by a factor of 56 (from US$13.50 to $750 per pill). In 2017, Shkreli was charged and convicted in federal court on two counts of securities fraud and one count of conspiring to commit securities fraud, unrelated to the Daraprim controversy. He was sentenced to seven years in federal prison and up to $7.4 million in fines

Back in Issue #4, I mentioned this Interesting Find about Wu-Tang and the infamous Martin Shkreli:

🎬 Musician and filmmaker The RZA (of Wu-Tang Clan fame) and Brad Pitt’s production company Plan B are creating a Netflix movie that tells the story of infamous ex-big Pharma CEO Martin Shkreli and the drama surrounding his $2M purchase of an unreleased Wu-Tang album. The album has an 88 year copyright making it impossible to commercialize it until 2103.

Well Martin Shrekli is back in the news in a weird way.

Unless you’ve been living under a rock, you’ve been hearing about this stock market madness about Gamestop and the investors from the “WallstreetBets” (WSB) subreddit. If not, Bloomberg has you covered with a summary.

Apparently, Shkreli was one of the admins/moderatprs of the WSB subreddit years ago. Sheel Mohnot discovered a post from him 4 years ago which is oddly relevant given the Gamestop madness where he was giving advice about “YOLO investing”:

YOLO BAN

I propose a general stop to using the phrase "yolo".

Investing is an art, sometimes a science, which is focused on the careful allocation of risk units in exchange for reward units. The smart investor understands that he is always taking some sort of risk, even in Treasury bonds. That intelligent investor has made a careful assessment of the expected return and has thought through the risk being "worth it".

The "YOLO" term undermines the central point of investing. While it is tautological that one only lives once, your capital may die a premature and permanent death. This "roll the dice" mentality is amateurish: I have never heard it in 15 years on Wall Street.

Investing can be exciting, and that can be a good thing. But simply searching for thrills is unwise. You can Bloomberg search for stocks with the highest implied volatility and flip coins on binary events and earnings announcements for a living, if you'd like. It doesn't lead to outsized returns.

Last year I made a very big bet on a biotech company called Celladon, earning over $20,0000,000 in my personal account. I was pleased but this was not a "YOLO" moment. I thought carefully about the embarrassment and ramifications of LOSING $20,000,000. I researched the situation for months until I felt comfortable I knew more about this company's drug than the company did. I was right and slept sound. No YOLO.

Becoming wealthy is difficult and requires immense patience. This "yolo" attitude discourages this perspective. Remember that the world's best fundamental (non-quantitative, non-insider trading) investors are making 15% returns (at best) in the current era. You will need a large starting capital base to become wealthy. Those investors are not simply in stodgy old-line stocks that prevent their returns from being large. They are appropriately (usually inappropriately, actually) measuring the tradeoff of risk units for return units and trying to make as much money as possible. No hedge fund manager would deny themselves a 100% year, but most do as the necessary risk to achieve that kind of return will subject a portfolio to disappearing.

I hope these thoughts are helpful as you pursue your investment careers.

Martin Shkreli

Oddly good advice from a now convicted criminal. Thanks Martin?