Marcelo P. Lima Profile picture
Jan 11, 2022 11 tweets 3 min read Read on X
Our nuclear regulator:
- 2,868 employees
- $863m budget
- 47 years in operation
- LICENSE APPROVALS: ZERO
They approved a *design* for a small modular nuclear reactor, and bragged it "only" took 42 months!

It required a 12,000 page application and 2 MILLION pages of "additional documents." Image
My guess is this application cost *at least* $100 million to put together.

Is it any wonder there has been zero progress in nuclear over the last half century?
Can you imagine spending $100 million and waiting half a decade to find out if your regulator overlord will approve the design of your app?

Before you even begin building it, testing, iterating?
Sure, nuclear power plants aren't apps 😅

BUT the point is that the friction, the barriers to even THINKING about innovation in this space are just crazy.

We need to find a better model.
The only reason nuclear is expensive TODAY is because we can't practice and mass-produce reactors. If we churned these things out like iPhones, they'd be damn cheap. Other countries have shown it's possible (and even they don't mass-produce nuclear reactors) Image
To learn more:
vox.com/2016/2/29/1113…
And read the chapter "The Atomic Age" in this book:
On the crazy costs of getting nuclear reactor designs approved:

“The process is very long, very tedious and very expensive,” says Ross Snuggerud, Nuscale’s chief of engineering operations. “There’s a $1.4bn barrier to getting the design approved that the government’s created.”

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More from @MarceloPLima

Mar 4
Guess who would be really happy with Trump’s tariffs?

Warren Buffett

That’s right. In 2003 he wrote an article pointing out our huge trade deficit problem and proposed a solution… tariffs!

🧵 Image
At the time we had ~$400 billion trade deficit and Buffett was so worried, he was betting on foreign currencies, hoping a weakening dollar would ensue Image
Buffett asked the reader to imagine two identical islands, Thriftville and Squanderville. They just produce food. Image
Read 21 tweets
Jun 7, 2023
What’s amazing about Phil Knight’s Shoe Dog is that his company (eventually named Nike) spent so many years on the brink of bankruptcy because of too much debt.

And then, this: “Essentially the American Selling Price law, or ASP, said that import duties on nylon shoes
“must be 20 percent of the manufacturing cost of the shoe—unless there’s a “similar shoe” manufactured by a competitor in the United States. In which case, the duty must be 20 percent of the competitor’s selling price.
“So all our competitors needed to do was make a few shoes in the United States, get them declared “similar,” then price them sky high—and boom. They could send our import duties sky high, too. And that’s just what they did.
Read 5 tweets
Aug 12, 2022
Updating my monthly thread on inflation and inflation expectations. Market participants are still expecting inflation to cool down, judging by 1y, 2y and 5 in 5y inflation swaps:
5 and 10y inflation breakevens are in agreement:
Gasoline prices now have a $3 handle; more work to do in diesel (orange). Unclear how much longer this trend can continue given the persistently high oil price ($92 vs a more "normal" price of ~$60/barrel):
Read 15 tweets
Aug 10, 2022
$SQ (Block) has chosen to vertically integrate to a much greater extent than $SHOP and as a result, gets a lot more revenue and gross profits. Both companies have similar market caps, EVs and GMV/GPV: Image
But look at how much more Block gets out of that "flow" in terms of gross profits, compared to Shopify: Image
Block has grown gross profits per share at a nice clip: Image
Read 6 tweets
Jul 12, 2022
I took a look at ARK's $ROKU model. The base case is a $605 price target by 2026 (current px: $89).

Key assumptions:
- 157m active accounts
- $88 ARPU
- 15% FCF margin
- 44x FCF

Thoughts 👇🏻
I think the number of active accounts is aggressive. It's hard to see the US grow very quickly; it feels somewhat saturated at ~61m accounts?

International should grow fast but...
International ARPU should be materially lower than US ARPU.

Advertising is highly correlated with GDP/capita and every ad business has much lower CPMs internationally than in the US.

I think $88 in ARPU in the US is reachable... but not globally on a blended basis.
Read 4 tweets
Jul 7, 2022
Interesting to see the Coatue slides.

They believe markets will decline another ~20% after earnings revisions come down and every sector declines.

That's possible. They think it's very likely.

On the other hand... 👇🏻
Interesting to see a few contrary opinions:

On May 24 Orlando Bravo went on CNBC and said,

"For us in private equity, as a buyer and operator of software companies, this environment of five times forward revenue is the buying opportunity of a lifetime."
5x revenue is roughly where the aggregate of the SaaS index is right now, perhaps a bit higher.

Note that Bravo's firm acquired SailPoint and Anaplan at ~13x forward revenues ImageImage
Read 11 tweets

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