Empty Fantasies

American Zen teacher Joko Beck in Nothing Special:

Most of our difficulties, our hopes, and our worries are empty fantasies. Nothing has ever existed except this moment. That’s all there is. That’s all we are. Yet most human beings spend 50 to 90 percent or more of their time in their imagination, living in fantasy. We think about what has happened to us, what might have happened, how we feel about it, how we should be different, how others should be different, how it’s all a shame, and on and on; it’s all fantasy, all imagination. Memory is imagination. Every memory that we stick to devastates our life.

Mindfulness is Enlightenment

Vietnamese-born monk and writer Thich Nhat Hanh writes in Zen Keys (1994):

I remember a short conversation between the Buddha and a philosopher of his time.

“I have heard that Buddhism is a doctrine of enlightenment. What is your method? What do you practice every day?”

“We walk, we eat, we wash ourselves, we sit down.”

“What is so special about that? Everyone walks, eats, washes, sits down…”

“Sir, when we walk, we are aware that we are walking; when we eat, we are aware that we are eating… When others walk, eat, wash, or sit down, they are generally not aware of what they are doing.”

Looking in the Distance

Scottish agnostic cleric and writer Richard Holloway writes in Doubts and Loves: What is Left of Christianity (2001):

By definition, religions of salvation are in the bandage business, they have come to heal our wounds. They do not sit alongside us in the chair looking in the distance, comparing points of view; they want to protect us from what we might discover for ourselves, by telling us what the official view is and how dangerous it will be for us if we don’t accept it. Or to mix the metaphor slightly, they want to sell us their special spectacles, which have been theologically tested by experts to give us maximum power for long-distance looking. Given the extraordinary energy and vitality of the human species, none of this should surprise us, but buyers should always beware of sellers.

All of Humanity Against the Coronavirus Pandemic

Bill Gates offers an authoritative assessment of the first modern pandemic and explores scientific advances needed to stop COVID-19:

The coronavirus pandemic pits all of humanity against the virus. The damage to health, wealth, and well-being has already been enormous. This is like a world war, except in this case, we’re all on the same side. Everyone can work together to learn about the disease and develop tools to fight it. I see global innovation as the key to limiting the damage. This includes innovations in testing, treatments, vaccines, and policies to limit the spread while minimizing the damage to economies and well-being.

A condensed version of this article appeared as this opinion article in the Washington Post.

The Collapse of the Boeing-Embraer Joint Venture

Boeing terminated the proposed joint venture between Boeing and Embraer to design, build, and sell commercial airliners worldwide. Boeing had previously agreed to purchase an 80% stake in Embraer’s commercial aircraft division. Ernest Arvai of the AirInsight group wonders,

Over the weekend, Boeing terminated its agreement with Embraer to acquire the E2 series of commercial jets. Embraer has protested this termination, but this transaction appears now to be like Humpty Dumpty and is unlikely to be put together again. The proposed deal had several potential advantages for each side. Embraer would have obtained the marketing clout of Boeing and the opportunity for the E2 family to be considered in multiple-aircraft deals with Boeing. Boeing would have obtained the excellence in engineering at Embraer, who has introduced 14 new models in 14 years, with a track record for being on-time and on-budget. But in the end, the impact on the aviation market from the coronavirus resulted in market valuation that made the original proposed transaction mispriced.

Scott Hamilton, managing editor of Leeham News and Analysis, calls this a crushing blow to Embraer,

When the JV was announced in 2019, the advantages for Boeing were:

  • Access to EMB engineers at a time when Boeing’s are aging and ready to retire.
  • Access to much lower cost base in Brazil.
  • KC-390 program.
  • Revenue from EMB Commercial services.
  • E2 program, though this is tangential.

The advantages for Embraer were:

  • Access to Boeing’s vast customer base, marketing power, balance sheet (again, pre-virus) and capital markets.
  • Access to work on new airplane programs: NMA (at the time,) Future Small Airplanes (single aisle, either to compete with A220 or larger.)
  • Work for its engineers.
  • A future beyond the struggling E2 and beyond the fanciful turboprop concept.
  • A future for Embraer Commercial Airplanes, which in LNA’s view was increasingly risky.

Airfinance Journal has reported that “Boeing must pay Embraer a termination fee of $100m for the early termination of the venture. Embraer incurred $34.8m in costs associated with the carve out or separation of its commercial aviation business in the third quarter of 2019.”

Charlie Munger Isn’t Impressed with Donald Trump

Charlie Munger has never been a particular fan of Donald Trump. According to Yahoo! Finance:

“I think [Trump] deserves some credit, but a lot of it just happened,” says Munger, 95, in his first interview after the Berkshire Hathaway Shareholders Meeting…. Munger, a Republican, said the strong economic performance resulted largely from the natural economic cycle and the decisions of Trump’s predecessors in the White House….

In his interview with Yahoo Finance, Munger dismissed criticism of Trump’s efforts to pressure Federal Reserve Chairman Jerome Powell on interest rates.

“I think presidents have always done this,” Munger says.

Munger sharply rebuked Trump’s policy goals at the Fed, arguing that a push to keep benchmark interest rates low will ultimately backfire.

“If you’re a politician in a democracy, of course you want people to print money and spend it,” Munger says. “And of course, it’s not a good idea.”

Is Amazon a Value Stock?

Speaking at the 2019 Berkshire Hathaway annual meeting of shareholders, Warren Buffett on why Amazon could be a value stock:

Yeah. It’s interesting that the term “value investing” came up. Because I can assure you that both managers who — and one of them bought some Amazon stock in the last quarter, which will get reported in another week or ten days — he is a value investor. The idea that value is somehow connected to book value or low price/earnings ratios or anything — as Charlie has said, all investing is value investing. I mean, you’re putting out some money now to get more later on. And you’re making a calculation as to the probabilities of getting that money and when you’ll get it and what interest rates will be in between.

There are many ways to value a security, but as Buffett explained last year, the most important thing investors need to consider is the cash flow characteristics,

In the end, it all goes back to Aesop… a bird in the hand is worth two in the bush… And when we buy Amazon, we try and figure out… whether there’s three or four or five in the bush and how long it’ll take to get to the bush, how certain he is that he’s going to get to the bush, you know, and then who else is going to come and try and take the bush away…the basic equation is that of Aesop. And your success in investing depends on how well you were able to figure out how certain that bush is, how far away it is, and what the worst case is, instead of two birds being there, and only one being there, and the possibilities of four or five or ten or 20 being there.

Bad Advice

In 1887, President Grover Cleveland welcomed an old friend to the White House. Weary of the office, he said to the man’s 5-year-old son, “My little man, I am making a strange wish for you. It is that you may never be president of the United States.”

The boy was President Franklin Roosevelt.

The Strawfoot, a “New Yorker’s American History blog” notes,

Grover Cleveland once had some advice for James Roosevelt’s much younger son, Franklin Delano Roosevelt. When Franklin was five his father took him to meet the outgoing president. Cleveland looked down and gravely said, “My little man, I am making a strange wish for you. It is that you may never be president of the United States.”

The Subways of New York & Coronavirus Epidemic

This National Bureau of Economic Research working paper by Jeffrey E. Harris discusses how the subways of New York seeded the massive Coronavirus epidemic in New York City:

New York City’s multitentacled subway system was a major disseminator—if not the principal transmission vehicle—of Coronavirus infection during the initial takeoff of the massive epidemic that became evident throughout the city during March 2020. The near shutoff of subway ridership in Manhattan—down by over 90 percent at the end of March—correlates strongly with the substantial increase in the doubling time of new cases in this borough. Maps of subway station turnstile entries, superimposed upon zip code-level maps of reported Coronavirus incidence, are strongly consistent with subway-facilitated disease propagation. Local train lines appear to have a higher propensity to transmit infection than express lines. Reciprocal seeding of infection appears to be the best explanation for the emergence of a single hotspot in Midtown West in Manhattan. Bus hubs may have served as secondary transmission routes out to the periphery of the city.

That’s appalling. Subways are resourceful and efficient in numerous ways. It is just regrettable that they are resourceful in this way also.

The Toxic Leadership Habits

Leadership coach and author Lolly Daskal on identifying someone with bad leadership skills:

We all have things we need to work on. Maybe you catch yourself zoning out in meetings, or taking on work that you should be delegating. It’s important to pay attention to those areas and keep them under control. But some habits are worse than others. Here are six of the most destructive—tendencies that, left unchecked, will definitely undermine your authority as a leader and will cause your team to lose faith in you.