Roundup #4: 15th Anniversary Edition

Greetings FutureBlind readers!

This month marks the 15th anniversary of my first post on the FutureBlind blog. This is such a long time in the internet age that I feel like an old man now. I started the blog in college as a place for my thoughts on investing and business case studies. What I’ve written about over the years has morphed along with my interests, and I continue to enjoy putting my thoughts out there. I’ll keep going as long as I’m able to and hope readers continue to find it enjoyable! 😄

In this roundup edition:

  • Essay: Take the Iterative Path — How SpaceX innovates by moving fast and blowing things up.
  • 🖼 The AI art renaissance — What kinds of crazy applications will the AI art models lead to?
  • ⚡️ Energy! — Energy superabundance and Mark Nelson on nuclear.
  • 🚀 Space updates — Will we see SLS and Starship launch the same month?
  • 🧪 What negatives does technology cause? — How do we distinguish potential risks of new tech?
  • 🔦 Company Spotlights — Rocket Lab and Perimeter Solutions.
  • 🔗 Interesting Links — All about Polaroid, why American can’t build, and the little ways the world works.
  • 📚 Book notes — How Innovation Works, Where Good Ideas Come From
Continue reading “Roundup #4: 15th Anniversary Edition”

BreitBurn Energy Update

This is a selection from my Q2 letter to the partners of Braewick Holdings. Braewick currently has a position in BreitBurn Energy (BBEP). I posted about our first investment in BreitBurn two years ago.

BreitBurn is essentially a physical oil and gas hedge fund. They invest in properties that have proven reserves, and receive a return on that investment through extracting and selling the oil & gas at market rates. Like a hedge fund, they limit market risk by purchasing various hedges on future prices. Unlike most hedge funds, they have direct involvement in the operations of each of their holdings. Excess returns are achieved through the following methods:

  1. Opportunistic reserve purchases (low price-to-value, or “value investing”)
  2. Good hedging strategy (market timing + exploiting contango in futures prices)
  3. Operational efficiency (keeping costs low and extracting extra reserves)

Units of BreitBurn are currently yielding about 11%, and I believe this yield is safe for multiple years out. In other words, I believe that through a combination of the above methods, value per unit will increase at least 11% per annum.

Here’s their most recent presentation.

Oil pump