1/ Elon Musk is like a farmer driving a tractor on a straight one lane road at full speed toward his objective. He sees other farmers coming from the other direction on the same one lane road, but knows he needs to get to the end of the road by a certain time to achieve his goal.
2/ Elon can’t pull over and let the other farmer’s go past him. Too slow. So he has taken his steering wheel from his tractor and thrown it into a field so the other farmers can see what he did. He wants everyone to see he is irrevocably committed so they get out of his way.
3/ This sets up an epic competition with other satellite systems including Amazon's LEO constellation. This competition has all the elements of a great movie. A small team of people that included me set all this in motion at the WRC in 1995. This is fun! cnbc.com/2021/04/19/ama…
4/ In the early days of cellular spectrum was awarded in beauty contests. With satellites there's still a combination of first to file + beauty contest in service rules (which are very important). wsj.com/articles/elon-…
The culture becomes not just winning, but others losing.
5/ Starlink and other satellite providers seek rulings from the FCC and other regulators on issues (eg, orbital altitude; service parameters). Trial by lawyers, lobbyists and public relations results. The WRC in 2023 will be one battleground but it is repeated in each nation.
6/ Rules created by the FCC and other regulators impose requirements that the satellites be "brought into service" by a specific date and that different systems coordinate their system operation to minimize interference. Some systems get a priority of some kind and some don't.
7/ "Amazon must deploy half the low Earth orbit (LEO) constellation by July 2026 under regulatory conditions tied to its license. All the satellites have to be in place by July 2029." spacenews.com/amazon-contrac…
Starlink has deadlines for its constellation too. It is "go time."
8/ As you know, the integration tower will have large mechanical arms that will catch a returning Super Heavy booster. This technique will remove the need for landing legs on the Super Heavy and would also greatly reduce turnaround time between launches. nasaspaceflight.com/2021/04/starsh…
9/ The price Amazon paid per kilogram for Atlas rocket launches for Kuiper would be interesting to know. Waiting for a future rocket that might cost less to get started was not an option given rules about the system bring brought into service. Go big or go home.
10/ How big is big? For one aspect of bigness see the picture:
Reliable reusability is also big on the cost side of the equation.
Speed to place a constellation in orbit so it meets "in service" rules is also big.
There are almost always tradeoffs in space and wireless.
11/ "ULA list price for an Atlas 5 rocket starts at $109M. AMZN did not disclose how many satellites will fly on each Atlas 5 or which rocket configuration will launch Kuiper satellites. spaceflightnow.com/2021/04/19/ama…
Amazon vs SpaceX photo:
12/ Why just SpaceX and Amazon in the previous picture? They are the only satellite constellations targeting consumers. OneWeb, Telesat and other proposed systems target backhaul, enterprise and government customers. Kuiper and Starlink will serve enterprise and governments too.
13/ This is an explanation of how Starcraft enabled SpaceX to be awarded this NASA contract to land humans on the moon (with an eye toward landing them on Mars). Also explains why Blue Origin lost. The contrast between SpaceX and the SLS program is stark.
14/ "Artemis has both classic cost-plus and contracts and new fixed-price contracts for its major components, with jobs distributed around the country....the inevitable outcome for a large project depends on discretionary spending overseen by a representational political system."
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"For many years up until the pandemic I had dinner with Charlie Munger every Tuesday night."
2/ He has said:
"We normally don’t talk about specific companies. Once you achieve a certain notoriety in a certain field, people tend to really copy that. This is not the behavior we want to encourage. Instead of giving people fish, it is much better to teach them how to fish."
3/ "To have a business that generates above average returns over a long period in a compounded fashion is against the natural order of things. Only a small slice of all businesses and companies belong in that category. They are rare."
"Investing is inherently about predicting the future. But predictions can never reach 100% accuracy; they can only fall between zero and something approaching 100%. So when we make a judgement, we need a large buffer. This is called margin of safety."
Michael Mauboussin: "Margin of safety can be restated as a discount to expected value. For every stock there is an intrinsic value, and the deeper the discount the stock price is to intrinsic value, the lower the risk." retailinvestor.org/pdf/MarginOfSa…
2/ That writers have the ability to work for themselves creates a wholesale transfer printing problem for the publication. The better BATNA of writers even benefits writers who stay at the New York Times at salary time. Writers will be paid more. That's a very good thing.
3/ "Substack" is bring used as shorthand by intermediaries who feel threatened by writers selling their work directly to customers. Many types of creators in different types of creative arts are eliminating intermediaries from their value chain. The shift to D2C is unstoppable.
Telesat aims to launch its first batch of 298 satellites built by Thales in early 2023, with partial service in high latitudes later that same year, and full global service in 2023. It is estimated to cost half as much as the $10B SpaceX and Amazon Kuiper."reuters.com/article/busine…
"OneWeb plans to have 648 satellites at 1,200 km in orbit to provide a global service. The most recent launch on March 25 took it up to 146 satellites. The fifth launch will be in June, when OneWeb aims to provide broadband to the whole of the UK." businessinsider.in/tech/news/onew…
Craig Moffett: Using Starship for Starlink satellite launches may be important for SpaceX to meet the FCC's 2027 build requirements. The company could increase its rocket launch cadence to 200 Starlink satellites per month, up from the 120 per month." nasaspaceflight.com/2021/04/starsh…
1/ "The value of a financial asset is the present value of future cash flows. If you don’t believe that, please put this aside and resume your normal daily activities." morganstanley.com/im/publication…
The two previous sentences written by Michael Mauboussin apply to this Twitter thread.
2/ "Intrinsic value is the number that if you were all knowing about the future and you could predict all the cash a business would give you between now and judgement day, discounted at the proper discount rate." Buffett
The predicting the future part is what makes this hard.
3/ "It is important to understand that intrinsic value is not an exact figure, but a range that is based on your assumptions."
Jean-Marie Eveillard
"Anytime anyone gives you some simplified formula for figuring it out, forget it."
When I've pointed out the insanity of VaR before some people say: "No one models Gaussian any more." Experience proves that some still do if they want to justify picking up dimes in front of steam rollers. As Munger says: "Show me the incentives and I'll show you the outcome."
"Fat Tony, a Brooklyn street-smart character, builds his success on the paradox that the only prediction one can safely make is that those who base their business on prediction will eventually blow up. So Fat Tony takes the other side." fooledbyrandomness.com/ECONOMIST2013.…