Copper is a key industrial metal. But it’s also at the heart of the long term trend towards electrification. Irrespective of whether we have a global recession or not, demand for copper and other battery metals is likely to increase substantially over the medium to long term. We’re not economists, but we’re pretty sure that when supply is shrinking and demand is increasing, the price will eventually go up. Possibly by a lot.
This month in (financial) history.
In July 1852, giant US bank Wells Fargo & Co was founded in San Francisco to support miners in the gold rush. Henry Wells and William Fargo started out purchasing gold dust from miners in exchange for paper bank drafts. By 1858, they had expanded with a delivery service, transporting letters, packages and gold nuggets on their fleet of branded wagons. Its stagecoach lines eventually covered over 3,000 miles of western US, and in 1888 became the first coast-to-coast express company. In the 20th century, the company spun off its delivery segment and began growing as a local, then regional, then national bank.
In July 1995, Spyglass became the first-ever publicly traded internet software company. Spyglass licensed the early internet browser, Mosaic. The stock was up more than 200% on its first day of trading. Just months before the Spyglass IPO, Netscape Communications had released its Netscape Navigator browser.
Microsoft quickly recognised the value in web browser software and licensed Mosaic as the basis for its Internet Explorer browser. The deal between Microsoft and Spyglass stipulated that Spyglass would receive a base quarterly fee for the Mosaic license plus a royalty from Microsoft’s Internet Explorer revenue. Microsoft then bundled Internet Explorer and provided it as a free add-on for it’s Windows 95 software. Thus, since it made no direct revenues on Internet Explorer, Microsoft paid only the minimum quarterly fee to Spyglass. In 1997, Spyglass threatened Microsoft with a contractual audit, and Microsoft eventually settled the dispute for $8 million. In March 2000, OpenTV acquired Spyglass at almost the exact peak in the dot-com bubble in a stock swap deal worth $2.5 billion.
And finally, in July 1997, the corporate assets of ZZZZ Best Co (pronounced “zee best”) are sold at bankruptcy auction for $62,000. Less than four months earlier, the company had a stock-market value of roughly $300 million, and the stock had more than quadrupled since in initial public offering in 1986. ZZZZ Best was supposedly a carpet-cleaning company, founded by 21-year-old whiz kid Barry Minkow while he was still at high school. But it turned out ZZZZ Best had virtually no customers, revenues or assets. Minkow had set up an elaborate system of phantom offices and phony account records. At one point, he even bribed a building owner to pretend in the presence of an auditor that ZZZZ Best was cleaning his carpets. These days, ZZZZ Best survives only as a case study for auditing students.
Minkow eventually served five years in prison for his crimes. But that’s not the end of the story. After being released from jail, Barry became a pastor and fraud investigator in San Diego, and spoke at churches and schools about ethics! This came to an end in 2011, when he admitted to helping deliberately drive down the stock price of homebuilder Lennar and was ordered back to prison for five more years. Three years later, Minkow admitted to defrauding his own church and was sentenced to an additional five years behind bars. The 2018 US film, Con Man, is based on Minkow’s life. Barry makes an appearance in the film.
Vaguely interesting facts.
- Cicadas have been known to confuse the roar of power tools for mating calls and sometimes swarm people mowing their lawn.
- IKEA uses about 1 percent of the world’s timber every year, making it (probably) the largest consumer of wood on earth.
- Chewing gum boosts concentration by increasing the flow of oxygen to regions of the brain responsible for attention.
- In 19th-century Ireland, locals carved jack-o’-lanterns out of turnips instead of pumpkins.
- Bacon fat was used to make explosives during World War II. *
* During World War II, The American Fat Salvage Committee was created (we are not making this up) to urge housewives to save all the excess fat left over from cooking and donate it to the army to help them produce explosives.Housewives were directed to strain the left over fats and store them. Once a pound or more was collected, it could be handed over to any one of 250,000 participating butchers, meat dealers or frozen food plants who would then turn the fat over to the army. The donor would get four cents a pound for the fat. One pound of fat supposedly contained enough glycerin to make about a pound of explosives. To popularize the message, Disney created a film in 1942 called “Out of the Frying Pan and into the Firing Line”. It starred Minnie Mouse and her dog, Pluto, and you can see it here:
And finally…we’ll let you into a secret.
Fast food company KFC is on Twitter. No surprise there.