Author Archives: theusernamewhichismine

From a shareholder’s perspective, losses from stock compensation are still loses

Yesterday I talked about the economics of Ginkgo Bioworks’ ($DNA) synthetic biology business. In that post, I mentioned that Ginkgo had a loss of 650,000,000 dollars in the third quarter of 2022, against an expected annual revenue of just 500,000,000 dollars for the full year of 2022. What I didn’t mention was that a lot of that revenue was stock-based compensation, and I’m sure the $DNA boosters would be furious at me for not saying so.

When some companies release their earnings reports, they’ll focus on the “non-GAAP” number instead of the GAAP. GAAP stands for “generally accepted accounting practices” and so a non-GAAP number is obtained by using non-generally accepted accounting aka “funny math.” For our purposes today, note that GAAP considers stock based compensation as an expense, just like wages, and all expenses must be tallied up to obtain the profit or loss for the company as a whole. But for some folks this isn’t ideal, after all stock isn’t “cash,” you can’t go bankrupt by running out of it, so why should the company have to count it as an expense? For that reason, a common non-GAAP trick is to simply remove the stock based compensation to make the numbers look better. This isn’t breaking any laws, you have to make the GAAP numbers available for anyone who wants them but nothing precludes you from focusing on the non-GAAP numbers in your press release and earnings call. Lying is illegal, but optimism isn’t. This is important for $DNA as most of their expenses in Q3 were from stock based compensation: they lost 650,000,000 dollars in GAAP earnings, but only 100,000,000 dollars when stock based compensation is removed.

For a Ginkgo booster that 100,000,000 number is the only important one. Who cares about stock? They have 1.2 billion in cash and are losing 100 million a quarter, so they can keep doing this for 12 quarters (3 years) with no problems whatsoever, and by that point they’ll be profitable so cash-on-hand doesn’t matter, right? But for an investor the stock is still very important because without a dividend the value of your stock going up is the only way you’ll make money on a company. When 500,000,000 dollars worth of stock are given to the C-suite and senior execs, that dilutes how much of the company you own with your few shares of stock. Assuming the company’s total value stays the same, you now own a smaller slice of the same size pie so the total value of your slice has gone down. Even if the folks don’t sells their stock (and trust me, they always do), the threat of that sale will also have downward pressure on the stock price as skittish investors sell off so as not to become bagholders for the C-suite. That 500,000,000 dollars still represents a loss of value to the investors and should be treated as such.

There are a lot of ways a company can pay for things, and they all have their pros and cons. A company can sell stock, or hand over stock in exchange for something, a company can use the cash it has or it can take out loans and use those instead. Then a company can do a lot of different things with the revenue that comes in, it back buy back stock (or hand out a dividend, functionally the same) pay off its loans, or let the cash pile up for use later. There are many different reasons for a company to do any of these but they all involve the movement of value to different places. A company with a wildly overvalued stock price could benefit from selling share because the cash is worth more than the (transient) value of the stock. A company in a high interest rate environment could benefit from paying down its loans more than from sitting on cash, etc etc. But stock is a thing of value, it’s a source of money that the company controls, and handing that value over to the C-suite dilutes its value for every other investor. That’s why I only like to talk about the GAAP numbers for companies.

Ginkgo Bioworks: the economics of genetic engineering

Yesterday I discussed the science of genetic engineering, or at least its application to synthetic biology. Today I’d like to discuss how Ginkgo Bioworks is trying to monetize genetic engineering and gain all the value of its total addressable market.

To recap, genetic engineering is used for the production of biological molecules. If you have a drug for curing a disease you’ll need to produce mass quantities of it to both get through clinical trials and sell to patients down the road. In modern cases, that drug will usually be produced in specially made genetically modified organisms, and then purified out of those organisms using a specific purification pathway. The end result is a pure drug, which is something that the FDA demands and patients really want as it cuts down on variability and potential side effects. This is the business that Ginkgo Bioworks wants to get into, they want to be the ones producing those genetically modified organisms and validated those purification pathways. The organism and the pathway then become akin to intellectual property (IP) for the production pathway of that drug. So say you’re a company that own a drug but has no ability to produce it at scale, Ginkgo will develop a production pathway and charge you the lowest possible price for doing so (making zero profit themselves). They do this because their IP specifies a revenue sharing agreement whereby they get a cut should you manage to sell your drug in the future. This system is what gave Ginkgo such a ridiculous valuation based on TAM, if they can be the lowest-cost provider of drug production pathways, then every single company will want to contract with them, and so they’ll get revenue from every single drug on the market.

The problem is… that’s not how it seems to have worked. First, Ginkgo wants to drive down the cost of producing these production pathways, but they’re competing with companies that already work at economies of scale far greater than them. Let’s start with just the first step of the producing a production pathway: you had to get DNA for your drug and insert it into an organism. There are already many companies that will do this job for you if you’re willing to pay up. Those companies include heavy hitters like Genescript (market cap of more than 3x what Ginkgo was at its peak) and Thermo Fisher (the 600lb gorilla of this sector). These companies have driven down the cost of DNA, genetically modified organisms, and other tools to the point that Ginkgo doesn’t seem much like competition. Now Thermo Fisher And Genescript to my knowledge won’t make an entire pathway for you, but they will you a large part of the pathway for dirt cheap and then sell you the tools to finish it up yourself. But that still means that for many of the steps, Ginkgo is competing with companies that are far larger than it which are better able to deploy economies of scale than it. So Ginkgo might not even be offering you the best price possible when you compare with using some of the big boys instead. And remember they need to be offering the best price possible as they don’t even make money by selling you this process, instead they need to entice you to sign the deal where they get a portion of your future revenue.

Then there’s the fact that their business model relies on successes but self-selects for failures. It’s important to start by remembering that most drugs which go through clinical trials will fail to make any money whatsoever. Ginkgo’s business model is to produce a drug production pathway and sell it for zero profit and bank on the revenue sharing portion to make them money, but they of course understand that most of these revenue sharing agreements won’t make any revenue. But then what type of drug discovery company will even take such an agreement? A large drug company (Johnson and Johnson, Pfizer) already has the in-house tools produce a drug production pathway, they have little reason to enter a revenue sharing agreement especially when Ginkgo’s cost might compare unfavorably with just buying stuff from Thermo Fisher and doing the rest themselves. A small drug company is exactly the type Ginkgo needs to go after, but what type of small drug company? A small company that has lots of money and a product they are very certain is a hit also will be dissuaded by the revenue-sharing agreement, why fork over so much future revenue unnecessarily? On the other hand a small drug company will less money, or a drug company that has a product it isn’t sure of, those would be the kind of customers who would willingly bet on Ginkgo, but they are also the customers who will be least likely to succeed at bringing their drug through clinical trials. If they have no money they could easily go bust before they make it, and if they’re unsure of their drug then it probably means their scientists know it’s a long shot. So Ginkgo’s business model is forcing it to self-select and take on the customers who are least likely to make it a lot of money through the revenue sharing agreement.

And that’s important because the revenue sharing is supposed to be how the company will grow larger, and until it grows larger it can never compete with the big boys on economies of scale, therefor never address it’s total addressable market because there will always be big companies for whom it’s cheaper not to even work with Ginkgo. This is a chicken and egg problem, they need to grow large to reach economies of scale and drive down the cost of their services, and they need to drive down the cost of their services to make it more enticing to sign those revenue sharing agreements, but as long as their services are still higher they’re stuck in a holding pattern. It’s important to note that at this point that Ginkgo had a loss-from-operations of about 650,000,000 dollars in Q3 2022 alone. They are expected to have total 2022 Revenue of around 500,000,000 dollars. They lost more in a single quarter then their expected year-long revenue and that trend shows no sign of changing. Their cash on hand at the end of all this was 1.3 billion dollars, and with plenty of stock to sell and loans to take out, they can continue this business for a while yet. I’ll talk more in a future post about their burn rate and their losses, but it’s important to note that this is where the company is: growing but not necessarily at at rate that will let it achieve lift-off. It needs find some way to make its revenue-sharing business model work, either by driving down their costs so much that other companies have to use their services or by somehow enticing more winners instead of losers to use their services. The only part of the firm that is close to break-even is the “biosecurity” arm a COVID-monitering and diagnostic service that will likely fade as the salience of COVID continues to fade. Perhaps they can pivot to new avenues of biosecurity, flu monitoring? Either way this work is much lower margin than the synthetic biology revolution that was supposed to propel their TAM, and stock price, into the stratosphere.

Ginkgo Bioworks: the science of genetic engineering

Last time I discussed Gingko Bioworks ($DNA) and how their absurd valuation over this past year was in part due to valuing them by their TAM (Total Addressable Market) on the assumption that they’d grow rapidly to meet it. Today I’d like to lay down exactly what Gingko does so that tomorrow I can discuss why I think they’ve been failing. Full disclosure: I’ll be writing this post assuming my audience is non-scientists, so if anything I write is obvious to you since you studied it yourself, feel free to skip ahead.

Gingko is in the industry of synthetic biology, which is just an application of genetic engineering. In synthetic biology, you manufacture biological things (proteins, cells, other molecules) in order to perform a specific job. The classic example of this is producing insulin for sale to diabetics. Prior to synthetic biology, insulin could only be procured from the living organisms that produced it, this was usually cows and pigs, who produce small amounts of it in their daily lives. Since the total amount of insulin you got from butchering a cow was tiny, the cost was astronomical. But insulin gets produced because it is coded for by a piece of DNA called a gene, and by cloning the gene for human insulin into a bacteria cell you can grow up huge colonies of those cells and extract the insulin from them instead. This revolutionized the development of insulin, and led to a steady reduction in prices to the point that today insulin can be purchased for just 25$ at Walmart. But how exactly does the cloning and gene editing work? And how does Ginkgo hope to make money off of it?

To start with we should understand the central dogma of Biology: DNA codes for RNA, RNA codes for proteins. If you give a cell a piece of DNA, it can make RNA based on that, and then make proteins based on that RNA. Since insulin is a small protein, producing it is relatively straight forward: insert a piece of DNA into the cell which codes for the RNA which codes for insulin, and in a relatively short amount of time the cell will use the DNA you gave it to produce the insulin you wanted. But of course first you have to get the DNA for insulin and put it into your cell, and these are no small problems!

So how do you put a piece of DNA into a cell and force the cell to make proteins off of it? Well to start with the DNA has to be readable and usable by the cell you’re going to put it into, for example if has to have the right kind of introns and exons or the cell won’t use it right. Most DNA contains both exons and introns, the exons are the parts that will actually code for a protein, the introns get removed through splicing and have their own special properties we’ll talk about some other day. The important part here is that bacteria do not participate in splicing and non-human eukaryotes (yeast cells, insect cells, non-human mammal cells) splice differently than humans do. If you want your DNA to actually code for insulin, you need to use only the exons and none of the introns and you also need to ensure the cell doesn’t try to splice away your exons anyway. Let’s also note that DNA won’t even be used by a cell if it doesn’t come with a promoter, a string of DNA at the beginning of a gene that tells the cell “please turn me into RNA.” Humans have different promoters in our genes than other organisms, so you’ll need to add a promoter that works for the cell type you’re using (bacteria, insect, yeast, mammalian). Then there’s the fact that DNA (really the RNA but let’s skip a step here) is read in 3-letter codes called codons. Each codon matches to a certain tRNA, and each tRNA comes with an amino acid attached. But not all tRNAs are created equal, some organism have more or less of a certain tRNA and so will create protein more or less efficiently if you give them certain codons. Codon optimization is another tool used for making sure your piece of DNA gets efficiently transcribed and translated into a protein by using the right codons in the right cells. All these factors (exons, promoters, codons) need to be altered so that your DNA can be used by the cell you are going to put it in.

OK, so you’ve altered your DNA a whole bunch so that it codes for insulin once it’s inside a cell. Now you just have to get it there. With bacteria the system is moderately simple, many bacteria have evolved mechanisms so that they will willingly pick up just about any piece of DNA they find when subjected to major stresses (heat, electrocution). So you zap some bacteria in a tube along with your DNA of interest and some of them will pick it up. Then if your DNA has a selection marker for antibiotic resistance and you grow them up on antibiotic plates, the ones that survive are the ones who picked up your DNA and can now be grown up to start making proteins. But that’s just bacteria, a lot of drugs would be better produced in higher-order eukaryotes because those organisms are more biochemically similar to us. Eukaryotes however have a nucleus that is a barrier to foreign DNA, so you have to be extra clever (sometimes using retroviruses or CRISPR) to get your DNA into a eukaryote and make them make your insulin. And that’s just for insulin, something we figured out decades ago! There’s always new proteins or modified versions of old proteins being tested as new drugs, and every single one of them goes through this process in order to be produced using synthetic biology.

Changing the sequence of DNA you’re using, removing the introns so it only has the exons, changing the promoter, optomizing the codons, getting the DNA into cells, all these are time consuming to do and validate. I won’t get into the specifics of how they’re done, but some low level researchers may work on just this in the lab for the entirety of their junior research career (before they get their own project). This is not a simple process, and is definitely an area where Ginkgo thinks they can make a splash. The problem is that they won’t be the first and only player, there are already a number of companies out there who will do this job for you. Academic labs generally don’t use those services because it’s too expensive, and private sector labs already have competitors to choose from besides Ginkgo Bioworks. There is definitely a market here, but it’s a competitive one.

But remember, this is still just about getting the cell to make a protein! We still then need to purify the protein out of those cells in order to sell it and use it! And this too is no small problem, the USA and other countries all have regulations requiring that drugs sold to consumers must meet certain standards of quality and purity, each batch must be identical so the drug will work the same way each time, and the drug must be at the highest possible purity so no contaminants can mask or alter its effect. So purifying the protein out of your cells is another problem that Ginkgo and other companies need to solve when they are doing synthetic biology. I’ll talk about purifying some other time but with how much I wrote above about just getting the right DNA into cells so that they can produce insulin, I hope you can appreciate that this is a long and involved process. This is the work that Ginkgo Bioworks wants to do, they want to do all this in exchange for money and take over the synthetic biology industry. But their business model is strange indeed, all this work (getting the right DNA, getting it into cells, producing protein, purifying protein) will be done in what they call the foundry and they want to run that part of the business at cost meaning it won’t run a profit and will sell its services for the lowest possible amount to remain breakeven. So how does Ginkgo expect to make a profit? Tune in next time where I explain the wonderful world of IP and revenue sharing, and how that is the part of their business that I think Ginkgo has failed at.

Ginkgo Bioworks: what is the point of Total Addressable Market (TAM)?

Ginkgo Bioworks ($DNA) is a stock that I’ve heard a hell of a lot about. The idea of “DNA as a programming language” is something a lot of stocks and hype-mongers trade on, because it promises the insane growth of the Tech industry but with whole new markets where you can get in on the bottom floor. What if you could invest in Apple, Amazon, and Google in the 90s? Well now you can by investing in $DNA and other biotechs like it. Their tech is supposed to be the future, and is supposed to make us all a lot of money (if we invest in it).

Part of the appeal of investing in “DNA as a programming language” comes down to the concept of “total addressable market” or TAM. TAM is a way to calculate the greatest possible revenue you could ever achieve, by bringing your product to every person on earth who wants it and charging them a fair price. Valuation based on TAM aren’t necessarily ridiculous, Facebook is used by just about 1 out of every 2 people on earth these days, so if you had gone back to 2008 you could have realized just how monstrous Facebook would become by looking at their TAM (and deciding Facebook and not MySpace would win the war). So investing based on TAM might have made you money if you’d thrown it at Facebook. Sure, these days Facebook only gets a few bucks in ad revenue per person, that’s still several billion every year. So bringing your product to every single person in this wonderful world of ours, all 8 billion people, is almost guaranteed to make you some money.

Ginkgo and DNA-based companies like it have some eye-watering TAMs because DNA and biotech is so fundamental to everything the world economy does. Agriculture? Modern crops are all engineered (yes, even your GMO-free crops are engineered, they just use different techniques to get around people’s prejudices). Health? Modern medicines are all engineered and grown in cell culture vats. Commodities? Biochemists are already working on using engineered proteins to create all sorts of industrial chemicals, or to clean up industrial waste, so that’s yet another avenue for biotech revenue. There are endless possibilities for using proteins and cells in industry, so there are endless amounts of money you could conceivably make bringing your product to these industries. But what Ginkgo brings isn’t any particular protein, or any particular cell, they supposedly bring a platform to create all proteins, and all cells at a lower cost than anyone else. Ginkgo wants to be a shovel salesman in the Biotech gold rush, and they think they can sell shovels to every company on earth. Whether you’re a Big Pharma company producing drugs, an AgriTech selling seeds to farmers, or even a mega-factory trying to comply with the EU’s industrial pollution directives, biotechnology can help you and Ginkgo can help biotechnology.

Here’s what Ginkgo says it does: say you want to make a drug and get FDA approval to sell it to sick people. Your drug needs to meet the highest standards of quality control, every batch needs to be identical to the others in all the right ways so that what the sick people get is the same every time. Any sort of variation can be deadly in these cases, and the FDA looks very disapprovingly at variation for this reason. But producing a drug at scale is hard and expensive, even at the relatively modest scale needed for phase 1-3 clinical trials. This is supposed to be where Ginkgo comes in. They’ll create a modified cell for you which makes the drug all on its own. They’ll produce a purification pathway that is easy to use and gets consistent results. Then you can grow up that yeast cell into massive colonies (easy enough, yeast eat anything) and harvest them to purify the drug they are producing (again, this should work).

The problem is this pipeline doesn’t necessary lead them to the TAM-style valuation that once sent their stock price skyrocketing. Most drug products start by being produced in an academic lab at ultra-small scale, and for these purposes making the cells and purification pathways yourself is actually the cheaper option vs paying a big company to do it for you. Once you have a cell and a purification that sort-of works, you publish it and it gets picked up by some massive biotech that wants to monetize it. Now this company isn’t starting from a base of nothing, the work that the academic lab already published will probably be a very strong base from which the company can make its own cells and purification pathway (with only minor tweaks to what the academic lab did). And because it’s so easy to do this, again it rarely makes sense for a big company to partner with Ginkgo to do these things, especially when it’s not just the cost but also Ginkgo’s business model you have to deal with. See, when Ginkgo does something for a Biotech company, they don’t just as for money upfront. Ginkgo writes contracts that say that if you use the cells and purification pathways they create, then they will get a certain percentage of your revenue or profit (negotiable, of course). This was sold as an unbeatable deal that would catapult Ginkgo to the stratosphere and help them reach the valuation predicted by their TAM, understanding why this deal is failing is key to understanding why Ginkgo is failing.

I’ll talk more about the specifics of Ginkgo’s deal and why I think they will never manage to address their theoretical TAM in another blog post. For now, reflect on the fact that $DNA is in the exclusive club of stocks that lost over 85% of their value in the last year, $CVNA is another. I think both businesses were predicated on a business model that was more science fiction than fact.

Why can’t I seem to finish a game of Dyson Sphere Program?

I’ve talked a couple of times about Dyson Sphere Program on this blog, and while I’ve enjoyed my time with it immensely, I’ve never managed to actually sit down and finish a game of it. This post will be a sort of ramble on why a game so similar to Factorio just doesn’t do it for me the way Factorio does.

To start with, I’ve already talked about how I feel the game doesn’t “scale up” in the same way Factorio does. Later research goals in Factorio cost exponentially more than earlier ones, but in Dyson Sphere Program the relationship seems more additive or multiplicative than exponential. Then there’s the difficulty with blueprints, I can’t have a nice big blueprint that does everything I want anywhere I want it because since planets have to be spheres, the gridlines get broken up closer to the poles. This means a blueprint developed for the equator doesn’t work at the poles and vice versa, and means it’s not nearly as fun to make and place my blueprints for a big mega-base.

I’m also not to keen on constantly having to move between planets. In Dyson Sphere Program you have different planets that you’re collecting resources from, which should be really fun but the time it takes you to GET to those different planets is very boring. They couldn’t have realistic space travel ala Kerbal Space Program, but they also didn’t do enough to make space travel interesting in and of itself. So sitting there for a few minutes while you travel to another planet is just boring, and you HAVE to keep going back and forth because there’s no way to build things on one planet while you’re standing on another. This was something Factorio dealt with very well, running around was also boring in Factorio but once you build radars everywhere you could go into your map and change things anywhere that you had radar coverage without ever having to move your character. It was fun, it worked, and Dyson Sphere Program should have incorporated it so I don’t have to trek back and forth between planets just to make minor changes.

The lack of enemies is another thing I think I’ve talked about but it bears repeating because in Factorio the enemies actually did a lot for the game. Their attacks kept you on your toes, pushing back their bases gave you something to do while waiting for research, and it was a very fun structural problem to try to figure out how you were going to make everything you wanted to make while still protecting it. Factorio gives you an infinite canvas to build on, but gives you constraints in that you must protect everything from the enemies. That’s more interesting to me than an infinite canvas with no constraints.

Constantly needing to refuel your character (a robot), as well as needing to physically be in the places you want to build, work together to make me not enjoy the endgame. I don’t like running around making sure I have enough fuel or am standing near a charging station, and I don’t like building a giant conveyor belt across a tundra planet if it means I have to march across the planet myself to make sure it gets built. Having the bots build actually makes building long belts go a lot more slowly in this game than it did in Factorio where at least you could build a belt at your running speed.

Unclear benefits to building the actual Dyson Sphere. The Dyson Sphere in literature and science is an idea of harnessing the nearly unlimited energy of a star to do our bidding, and yet I got all the way to the final Research cube and never found myself with the kind of unsolvable power troubles that seemed to require a Dyson Sphere. I built one for kicks (it’s also unclear where you’re supposed to build the launchers but whatever), but I feel like I’d have been just as well or better served building more and more solar grids across the surface of the planet. Land was super plentiful and why should I spent more to build solar grids in space when I could just build solar grids on the ground. The efficiency gains (if there even were any) weren’t worth it and the energy gains for running your planet-wide base weren’t so great that I felt I needed it.

So overall Dyson Sphere Program is still a very fun game, and it’s a somewhat unique way to combine Factorio with space travel. But I’m feeling less and less confident in recommending it to others considering I can’t even bring myself to finish it.

When everything is a psyop, nothing is

Don’t read this one if you don’t like divisive politics

Psyop, meaning psychological operation, has felt like the word of the decade in political circles. Intro paragraphs are boring so I’ll cut right to the chase: just because America’s enemies support a cause, doesn’t mean that cause is bad or wrong. The USSR both rhetorically and covertly supported America’s Civil Rights Movement because they saw it as a way to take America down a peg. Yet morally the Civil Rights Movement was good regardless of who supported it. These days it seems you can’t have any political event without claims that Russia or China is supporting it and therefore it’s tainted and evil. This sort of closed-minded thinking short circuits any reasonable discussion and turns it into nationalistic chest beating instead because “you don’t support, Russia, do you?”

What’s most disturbing is how this type of Cold War thinking has infected the Liberal spaces which you’d think would be immune to it (given how much it was used against them just a decade and a half ago). I often find it sickening how I can find supposedly “Liberal” voices calling for the death of Edward Snowden on the grounds that he (*checks notes*) alerted Americans to the fact that the NSA was illegally wiretapping Americans without any oversight whatsoever. It seems that because all this happened on Obama’s watch, it has to be beyond criticism, and since Snowden fled to Russia, it means his actions prior to his flight are all evil by association. Regardless of the fact that Snowden is now a Kremlin asset who toes the party line for his own safety (a rather common situation in fascist dictatorships like Russia), his actions he took while in America shed light on the exact kind of mass surveillance program which was supposed to be closed after Bush left office, but which continued on regardless under a more Liberal president.

Then there’s the claims that the 2016 election was illegitimate since Russia’s intelligence agency launched a concerted campaign in support of Trump, nevermind that they also launched a concerted campaign in support of Black Lives Matter, the fact that Trump was helped by Russian psyops is proof of his illegitimacy, and proof that he was bought and paid for by Putin.

I’m no fan of Trump and have never voted for him, and I think Snowden’s actions in carrying water for Putin are disgraceful and themselves warrant prosecution. But it’s pretty short sighted to try to de-legitimize Trumps (undemocratic) victory in 2016 by pointing out that he was helped by Russia, when that notion just as easily de-legitimizes numerous causes that we should support. Trump was a bad president because of the things he did and the causes he supported, not because of who supported him. And it’s disgraceful to try to justify the USA’s zealous pursuit of Edward Snowden for leaking actual unconstitutional actions by the NSA based on the fact that his actions helped Russia. In this case, the interests of Putinist Russia and of the American citizens coincide if only by chance, Russia wanted to (again) take America down a peg and American citizens should want our fundamental rights to be respected. The fact that an action or a group or an individual is supported rhetorically or covertly by Russia is no reason to think that the cause or the individual themselves is a Russian asset, otherwise should we have tossed civil rights and BLM in the bin?

Small point: why is Ford stock such a bad deal?

In my first post on Cult of the Lamb, I offhandedly mentioned that it was retailing for the price of two shares of Ford ($F) stock, and that it was the better deal. This led to one friend asking me: “wait, why is Ford stock not a great deal?”

For the last 40-odd years Ford (and most American car companies) went through a mini-death spiral.  Profit margins shrank badly and caused them to lose a lot of value.  On top of it Ford is a “dividend king” stock, it pretty much always pays a hefty dividend which means investors like to hold it but you shouldn’t expect it to increase in value because money handed to the investors is money not being used to grow the company

Still, it’s true that Ford is down about 40% year to date while the broader stock market is down only 20% (Meta aka Facebook is down 60%, if you want to see what a disaster looks like).  Probably a lot of that is a combination of inflation (real wages are down 3.2% this year, and there was 0% real wage growth in 2021 due to inflation) and also the fact that EVs/plug in hybrids are the future and Ford barely does that.  Tesla is an all EV company and Toyota has become an all Hybrid company, both of them are expected to grow their revenue next year while Ford is expected to shrink.  Tesla was dummy overvalued in 2021 but it’s still a growing company and that counts for a lot.

So Ford as a company is worth less than it was in the 80s and it doesn’t have a plan to fix that.  It still pays a 4% dividend but so does a government bond these days and bonds are risk free.  If you buy Ford you’re hoping it goes up but you can’t really expect it to since revenue is shrinking.  You’re praying someone at the company figures this out and shakes things up.  If they could figure it out they might go somewhere.  Toyota produces 3x the amount of cars Ford does, but Ford produces 3x the amount that Tesla does.  5 years ago I remember thinking Tesla was a scam because Tesla produced less than 1/40 of the cars Ford did, but as I told you I was wrong in my bet against Musk (really I was in an echo chamber) because Tesla has grown and Ford has shrunk.  People buy Tesla stock expecting it to keep growing, people buy Ford stock hoping it stops shrinking.  Ultimately Ford’s history this century doesn’t make that seem like a good bet.

Final thoughts on Cult of the Lamb

A couple of days ago I said I’d gotten into playing Cult of the Lamb. Well I finished it and as of right now you can buy it for 20% of until December 12th. Note: the game isn’t really about story, but there are total spoilers below.

As I said in my previous post the plot was pretty much what you would expect from the outset, the Evil God you’re serving is your final boss fight after you’ve defeated the False Gods who tried to kill you at the beginning of the game. Let’s put some names to these characters: the Evil God you serve is called “The One Who Waits” while the False Gods you fight are the four “Bishops of the Old Faith”. The only sizzle to the plot is the tiny bit of interest that Bishop #3 is scared of you instead of angry and murder-y towards you like Bishops #1 and #2, and that Bishop #4 basically knows you’re going to kill them all and isn’t too upset about it when you speak to her. They throw a tiny interesting twist that The One Who Waits was originally Bishop #5, but they were so proud of that revelation that they have Bishop #4 repeat it to you verbatim about three different times, killing its gravity.

The Bishops are vaguely themed after a couple of different things, but this theming in incredibly bare-bones. The first 3 Bishops are all obviously deformed, #1 has his eyes removed, #2 has her throat slit, #3 has his ears removed. The in-game achievements then spell this theming out for you as “See no Evil, Speak no Evil, Hear no Evil.” Bishop #4 has a head wound, so “Think no Evil,” and The One Who Waits gives you an achievement for “Do no Evil” to complete the set. Cute. Then they’re vaguely themed after the Four Horsemen of the Apocalypse, only here it’s War, Famine, Pestilence, and Entropy/Change. Bishop #2 (Famine) will make your cultists starve when you meet her, Bishop #3 (Pestilence) will sicken them and Bishop #4 (Entropy/Change) will turn them against you so you have no choice but to kill them.

By the way, I’m saying “Bishop #whatever” here because I genuinely don’t remember these guys’ names, they were not really key to my enjoyment of the game.

The only sizzle the this story is that The One Who Waits and Bishop #4 were an item long ago. The One Who Waits was the god of Death, the ultimate inevitability. But his association with Bishop #4 (who’s dominion was Entropy/Change) screwed him up somehow, you can’t change what’s inevitable but he damn well tried to. This led to the others imprisoning him and killing off all lambs (I guess?) so he could never return. But again Bishop #4 is all about Entropy/Change (it honestly wasn’t clear to me which) and so she knows this situation won’t last, knows that she’ll get killed by the Lamb (your protagonist), and even knows the Lamb will kill The One Who Waits, which indeed you do at the end of the game.

So that’s the story of the thing. I’m pretty sure my few paragraphs are about as long as all the dialogue in the game because story really isn’t the focus here, gameplay is.

As for the gameplay, remember I discussed last time that the game is really made up of 2 separate games that vaguely tie together: you have a cult who you have to manage and who reward you with better weapons, and you go dungeon diving with your better weapons to get items and cult members to expand your cult.

Unfortunately the cult ran out of fun things for me way before the dungeon diving combat sections. I had bought every weapon/card upgrade in the game by the time I’d killed Bishop #3, but I still had #4 and The One Who Waits so I kind of ignored the cult and focused on them. This was to my detriment, I hadn’t noticed that each dungeon you entered had a minimum number of cultists required to let you enter, for dungeons 1, 2 and 3 I had had exactly the minimum number and so I actually thought this wasn’t a minimum requirement, it was just the game alerting me to how many cultist I had at the moment. But Dungeon #5 requires 20 cultists so after getting all geared up to kill The One Who Waits I suddenly had to run around and find 6 new cultists in order to proceed.

Like I said managing the cult just isn’t fun enough on its own to justify it’s gameplay when it isn’t providing you those sweet combat level-ups. This isn’t a Rimworld sort of game, the cultists don’t have enough personality or enough uniqueness to really make you care about them. And the good or evil rules you can lay down for your cult are quite interesting in how they can make your cult more efficient, but they grow stale over time.

Remember, I had a rule where I could murder anyone in the cult at any time and all my cult members gained faith when elderly members were murdered. That was a fun little synergy, as was throwing a Feast when Bishop #2 made all my cultists starve. But the cult system isn’t interesting or challenging enough to keep that fun going for the length of the game, which is unfortunate.

The combat sections however are quite fun for the entire length of the game, especially as you start getting into the weird and unique late-game benefits you can acquire. To remind you of how the combat works: you enter a dungeon and get a random weapon and a random magic spell with which to kill your enemies. As you continue through the dungeon you’ll find rooms containing either cards or new weapons/magic for you to choose from.

The cards are pretty sweet, giving you things like extra health, extra damage, or the ability to drop a bomb whenever you dodge-roll. The weapons can be too, with unique abilities like poison, stealing health, or summoning ghosts. One late-game item you can equip though is a new robe which gives you 4 cards at the start of the dungeon but no new cards during the dungeon. The trade-off is clear as getting these super-powers early might be worth having slightly less of them overall, but what wasn’t clear was that this ability also dramatically lowers the number of new weapons you get as the weapon rooms are removed also. I mostly liked using Axes, Hammers, or if I had to Swords. I didn’t like the Daggers or the Gloves, but since I had so few new weapons when using that robe I kept getting stuck with weapons I didn’t like which was unfortunate.

I want to talk more about the combat but I feel I just don’t have the gaming vocabulary to do it justice since I play so few games of this type. I like that the enemies often glow when they’re about to make an attack, as it helps you learn their attack pattern and dodgeroll out of the way. I like that you can cancel an attack into a dodgeroll or a dodgeroll into an attack at any time. I do not like that you can’t cancel a magic spell this way, and find it weird that when aiming magic spells the game slows down time to help you out a bit.

The early game enemies are all about learning their patterns and dodgerolling at the right time. Later enemies start throwing out loads of projectiles (is this what folks call “Bullet Hell“?) which require you to focus on the projectiles and dodgeroll through them to escape. Nearly every attack is telegraphed in this game, so I’m sure speedrunners and the like can learn to play the whole game without taking damage.

I think the boss fights are interesting, they all have a similar gimmick of combining a massive number of projectiles with a massive number of minor enemies plus a big enemy boss, all of which makes it hard to know what you need to concentrate on and makes it easier to take hits. Still the boss fights against the 4 Bishops felt tangibly easier that the dungeons and minibosses that preceded them, I wonder if this was a deliberate move on the part of the devs to make the Bishops feel climactic while still letting you beat them on your first try and feel powerful in doing so. The one exception is Bishop #5 aka The One Who Waits and that’s because he doesn’t even have a dungeon, you just walk straight into his boss fight. I guess again they wanted that climactic feeling and a dungeon would kind of ruin it.

What few quibbles I have left are mostly minor things that other roguelike enjoyers (this is apparently also classified as a roguelike) probably don’t think are issues. I always hated a run where I got stuck with a weapon I didn’t like (say a Dagger) for too long, and sometimes the cards just are useless for you. But whatever, it was a fun game.

I no longer consider interview offers that don’t come with a salary range

I have a job, but in a market like this there’s no reason not to be looking out for a better one. Studies have shown that the best way to get a raise is to move to a new job, and although there’s costs involved the benefits can be massive, especially as American workers have taken a real-wage paycut of 3.2% this year when factoring in inflation. So I’ll humor any recruiter who wants to talk to me. What I won’t humor is recruiters who aren’t upfront about their salary range. Don’t be fooled, companies never start hiring for a job without already knowing what salary they’re willing to pay, budgets are written and approved long before they even start reaching out for resumes. So every company knows exactly what range of salary they’re willing to pay, but they want to use the asymmetry of a job search to pay less than the market rate for labor.

Usually getting a job requires you to submit a resume, do a few interviews, and then see if you get hired. Companies want salary negotiations to only start after this whole process because they know it’s better for them than the worker. The worker has already spent several hours of their precious time applying to this company, so if they’ve made it to the offer stage they now have to decide whether they’ll accept a low-ball salary offer or go through the whole rigamarole all over again with another company and have no guarantee that that company won’t low-ball them as well. If the salary is transparent from the beginning, then workers won’t waste their time interviewing with companies that are below their salary range and so will be paid what they’re worth.

For shitty companies that pay peanuts, making the salary transparent would kill them. No one would ever interview with them because the price they’re paying for labor is just too cheap. That means the company can’t hire any workers and eventually goes bankrupt and blames “no one wanting to work”. But if salary is not transparent, then shitty companies that pay peanuts can rope in suckers, string them along for some interviews, and then give them a low-ball offer and hope the worker is too tired of interviews to go out and look for something better. Companies that pay good salaries are also harmed by salaries not being transparent because workers don’t actually know if a good company pays well since they can’t reliably compare them to a shitty company.

So if you ever see a company that won’t give you the salary range up front, it’s a shitty company trying to hide how little it pays. Good companies that pay well have every incentive to advertise the fact that they pay well so they can attract the best talent. For that reason, I never speak to companies that don’t tell me the salary range up front.

New game I’m playing: Cult of the Lamb

Cult of the Lamb is an exciting little hack-n-slash mixed with base building game that I’ve been playing a lot of recently. The game opens up with your protagonist (the eponymous Lamb) being sacrificed to prevent the resurrection of an Evil God. Turns out killing the Lamb just sent them straight to Evil God instead, who resurrects the Lamb and tells them to kill all the False Gods who stand before them. From here the resurrected Lamb is handed a sword and some magic to start going nuts, as well as a few servants to build up a cult and become ever more powerful so they can slay their enemies and presumably resurrect the Evil God in turn.

I haven’t finished the game but I assume once you resurrect the Evil God, everything is smiles and happiness forever and the Lamb just retires to running their cult. There’s no way the Evil God is actually the final boss you’ll be killing at the end.

Anyway this game isn’t anywhere near the kind of thing I usually play, fast paced hack-n-slashers just aren’t my forte, and playing one with a mouse and keyboard probably brands me a heretic in most people’s eyes. Still, it’s a very enjoyable experience with an easy-to-use dodgeroll and a variety of enemy patterns to keep the game interesting. You can cancel sword attacks using the dodgeroll as well (though infuriatingly, not magic attacks) meaning most combat arenas turn into me rolling around like Sonic the Hedgehog on cocaine, hacking and dodging all the while. I actually learned that I get better at the game by taking things a tad slower though (your weapon has knockback and often cancels enemy attacks), so this isn’t always the best strat.

Anyway when you’re not dodgerolling through the cultists of the False Gods, you’re managing your own cult to gather the resources needed to improve and expand your abilities. The two sides of the game (cult running and hacking/slashing) are actually way more disconnected than they seem, the combat bonuses you get from managing your cult are rather modest, but it’s definitely a fun way to take a break in between the hyperactive combat sections. Your cult is made up of cultists you randomly capture or save during combat sections, and as per usual they all need to eat, sleep, and stay healthy, and in return they will believe in you more which unlocks higher tiers of weapons and magic later in the game. But besides these very modest combat benefits, running the cult feels mostly like playing an entirely separate game. That’s not a terrible thing mind, because it’s still a fun game, it just doesn’t have as much combat benefits as it at first seems.

The cult itself includes the usual Rimworld-eque activities of getting food, building beds, and making sure everyone is happy. I’m sure Rimworld wasn’t the first game of this type but it’s the first one I played and so everything reminds me of it. The unique selling point of this game though is that since you’re running a cult, you can make all sorts of arbitrary rules and regulations to make it more efficient or just torment your little cultists. You can hold feasts, you can appoint a tax collector, you can unlock the ability to murder any cultist you want (good for removing dissidents). All these rules can make your cult run just a bit more smoothly which lets your cultists level up more and will allow you to unlock those modest weapon upgrades for the combat I was talking about.

To go back to combat, the last big selling point is the cards and weapons randomizer to keep the runs fresh and interesting. Each time you go on a “crusade” against your enemies, you will enter a dungeon with a randomly selected weapon and magic attack. They all have unique properties so two runs can feel entirely different depending on whether you get the hammer (slow as molasses but deals huge damage) or the dagger (quick strikes, lower damage).

In addition, each weapons can have one of several unique bonuses such as stealing health, poisoning, or unleashing ghosts. You may then randomly find weapon shops in the dungeon where you can exchange your weapons for 1 of 3 others. But in addition to all this you will find card shops that will let you select 1 of 2 random cards for a separate benefit. These cards range from poisoning anyone you hit, to getting some extra health, to swinging your weapon faster or more strongly.

The randomness of which weapons you’ll get combined with which cards you’ll get adds a huge layer of replayability to any run ensuring that no two crusades feel the same. And since you unlock higher level weapons and new cards through the cult, they form the major way that the two areas of gameplay interact.

So the game is really two separate games that are both fun in their own right, but which somewhat combine to become greater than the sum of their parts. If I do have any quibbles they are minor, but for completeness sake:

  • I don’t like how choosing the rules of your cult locks you into that rule and can’t be changed. I also don’t like how you don’t get to see all the possible rules before you pick. In my first playthrough I chose a rule that locked me out of being able to murder cultists on demand, which later became a problem as I had a few dissidents running around and not enough wood to build jail cells to contain them. I then found that I had chosen another set of rules which didn’t actually synergize that well with each other, and that I’d prefer to have picked the “murder anyone” rule because it synergized pretty well with the “cultists gain faith when old members of the cult get murdered” rule as well as some others. I decided that even though it’s against the spirit of these types of games, I’d have a lot more fun by just restarting and choosing different rules
  • Speaking of restarting, I don’t like how the game has unskippable intros and tutorials to start off. Maybe there’s some option to skip them but I didn’t find any, so I had to rewatch the opening cutscenes and replay the opening tutorials before I could get back to where I wanted to be. In a game all about high-octane combat, starting a new game should put as few barriers as possible between you and the “good stuff” so it’s disappointing that this game has so much unskippable faffery to start off with. It’s not that the first sections of the game are bad mind you, they should just be skippable on repeat playthroughs.
  • The story is passable, which is both good and bad. Actually I guess it’s mostly good, since in less than a minute it sets up who you are, your goals, and your enemies, but still it isn’t going to knock anyone’s socks off but then it isn’t trying to.
  • I guess every game now wants to let you customize and name your little Rimworld-esque cultists, but to be honest I’ve never felt so disconnected from them as in this game. In Rimworld and other games, the cultists (colonists in Rimworld) are your main asset and avenue of gameplay. What they do IS what the game is about, so customizing them and watching them grow, level up, and die is fun and tugs on your heartstrings. Here the cultists are mostly devoid of personality and unique attributes, and there aren’t even good ways to wrangle them in the ways I’d like to (you have to talk to them individually to give them specific jobs). So customizing them does nothing for me, I’d much rather customize the Lamb (your protagonist/Avatar of Destruction) and give them a unique name and character model, but alas that’s the one character you can’t change.

Anyway with all that said, it’s a fun little game that’s retailing for the equivalent of 2 shares of Ford ($F) common stock. So if you have 2 shares of $F go ahead and sell them to buy this, because it’s honestly a better use of your money.