Friday, June 16, 2023

"Cobalt Blue"

We too had some fun with cobalt, unfortunately not seeing any similar opportunities at the moment. Fortunately we are adherents of the Warren Buffet methodology of strategic planning:

First the background, from the 1984 Chairman's Letter:
"...Using my academic voice, I have told you in the past of the drag that a mushrooming capital base exerts upon rates of return. Unfortunately, my academic voice is now giving way to a reportorial voice. Our historical 22% rate is just that - history. To earn even 15% annually over the next decade (assuming we continue to follow our present dividend policy, about which more will be said later in this letter) we would need profits aggregating about $3.9 billion. Accomplishing this will require a few big ideas - small ones just won’t do. Charlie Munger, my partner in general management, and I do not have any such ideas at present, but our experience has been that they pop up occasionally. (How’s that for a strategic plan?)..."
And here's Warren, from his letter to shareholders, 1985, with the the dénouement:
...You may remember the wildly upbeat message of last year’s report: nothing much was in the works but our experience had been that something big popped up occasionally. This carefully- crafted corporate strategy paid off in 1985. Later sections of this report discuss (a) our purchase of a major position in Capital Cities/ABC, (b) our acquisition of Scott & Fetzer, (c) our entry into a large, extended term participation in the insurance business of Fireman’s Fund, and (d) our sale of our stock in General Foods....

And from Delancey Place, June 7

Today's selection -- from Color: A Natural History of the Palette by Victoria Finlay.  

For artists and artisans of the old world in Europe, the vibrant colors they prized were often rare and difficult to come by. The most prized source of blue was the ultramarine shade from Afghanistan. The second most prized was “cobalt blue” from Persia:

“Half the ultramarine in the world must have passed through Bamiyan, and along parallel roads to the north and south. And there was another blue that travelled through the town the other way, from Persia and through into China.

It was not quite so valuable, but it was almost as valued. It came from mines in Persia -- now Iran -- and in English it was called ‘cobalt.’ Calling it ‘cobalt’ is rather like calling it ‘goblin’: in German folk legend Kobald was the name of a vicious sprite, who lived in the earth and resented intruders. It is a decent metal on its own, but it attracts a nasty companion in the form of arsenic, so the European silver miners who often came across it hated it, gave it the name of a gremlin, and for centuries they threw it away before it ate their feet and attacked their lungs. 

It was not simply the arsenic which made it seem a mysterious force: in the seventeenth century people discovered its propensity to change color on heating and used it in invisible inks; when the plain paper was held over a fire it would magically turn green where secret messages had been traced.....

A sample of cobalt blue pigment
A sample of commercial cobalt blue pigment


May 2019
Bezos, Andreessen and Gates Looking For Cobalt In Canada

Not them personally, can you imagine? Tramping around northern Saskatchewan?

Jeff: Bill, does this rock look blue to you?
Bill: I can't see it, let me get my glasses.
Marc: Guys, have I told you all the things I've wanted to tweet since I quit Twitter?
Jeff and Bill: Oh Gawd
No, it's a company they're invested in....