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On November 30, 2017, OAL commented on Navigating the Storm: SEACOR and the Jones Act :

Interesting, well researched piece. ‘Stroke of the pen’ risk can be difficult to manage as an operator and even harder to value as an investor. Rather than being comfortable with the current regulatory environment, I agree with the author that SEACOR should position itself with longer term investments that would enable the company to continue thriving in an environment without the protections afforded by the Jones Act. One way to achieve this industry positioning is to purposefully lower margins in the near/medium term to fund the R&D spend that would enable the development of more cost effective assets. In addition to remaining competitive inside of the US, the resulting cost effectiveness would also increase SEACOR’s long term competitiveness in international trade.

On November 30, 2017, OAL commented on The Emergence of Off the Grid Agriculture :

Very interesting piece about creative ways to solve environmental issues. A key question that comes to my mind is whether or not government support for solar projects is sustainable in the long term. In order to fund these types of solar projects, the government will need to raise additional funds or reallocate existing ones. This poses the question of whether or not the net impact of the solar projects is positive for the broader society/economy. A more realistic long term solution is for the private sector to introduce a more cost effective solar panel. One way to incentivize the development of less expensive solar panels is to provide tax breaks and incentives to the manufacturers rather than subsidies to the consumers

Interesting piece with helpful exhibits. A reaction to one of your questions is whether or not an increased focus on sustainability would have a detrimental impact on corporate profits. 66% of consumers state that they are willing to pay more for sustainable products, but is that enough? And can we be sure that the sustainable products will have the same taste and quality in the long term? Mars executives are responsible for making decisions that maximize shareholder equity. Too much focus on sustainability and too little focus on financials could open up the company to being targeted by activist shareholders like Icahn or JANA. Given activists’ attention to financials, overemphasizing sustainability today could derail the company’s long term commitment to the environment.

A fascinating read that is well written. An important question that this piece brings to mind is to the extent to which Facebook’s advertising efforts will impact its core product offering to consumers – a social network to connect with friends and family. Part of the value proposition that Facebook has to advertisers is the high degree of user engagement. It is imperative for Facebook to protect the strength of this engagement if the Company expects to continue increasing its value proposition to advertisers. Unfortunately, a shift in corporate focus to advertising can come at the expense of the social network, which paradoxically can in turn have negative impacts on ad revenues. Facebook will need to carefully balance its corporate resources to stay true to its original value proposition.

On November 30, 2017, OAL commented on Who is making your next iPhone? :

Another challenge that I see arising from increased complexity in Apple’s supply chain is a disruption to the Company’s regular cadence of phone releases. Consumers have come to expect a new and improved phone every 12 months, and many have adjusted their purchasing trends to reflect such a schedule. This timeline imposes restrictions on Apple’s ability to improve its processes and products. For example, if Apple were to miss an update cycle but Samsung were to put out a revolutionary new phone with substantially better features, will Apple lose long term customers?

Very interesting. One of the most prominent questions that this brings to mind is how quickly new technology will be adopted by consumers. Auto OEMs can control what they offer, but have less control over demand. It may very well be the case that consumers are not comfortable getting into a car that they have no control over. There could also be a difference in speed of adoption between demographics – perhaps younger consumers will be less reluctant to abandon their steering wheels. Finally, will driverless vehicles be more attractive to consumers living in urban/suburban areas, and if so, what percent of the market is truly addressable?