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Huge Demand for Berkshire’s NV Energy

Resolution for the $1 investment that cost Berkshire $535 million

Background: Excerpt from pp. 776-77 of The Complete Financial History of Berkshire Hathaway

Tim Melvin on Value After Hours

I just became a paying subscriber to and recommend it.

This Week in Berkshire History

October 31, 2002: Berkshire acquires CTB International, a manufacturer of equipment and systems for the poultry, hog, egg production, and grain industries.

October 31, 2002: Berkshire acquires The Pampered Chef, LTD, the largest branded kitchenware company and the largest direct seller of housewares in the U.S.

October 31, 2019: Berkshire’s Marmon acquires Colson Medical companies.

Charlie’s Corner: Mental Models

I’m trying something new here. I’ve been thinking about better organizing my mental models for a while, and I recently committed to using Obsidian for the task.

Sidenote: These podcasts featuring Obsidian CEO Steph Ango were fun: Cortex Podcast and the Dialectic Podcast. I also enjoyed his concise essays, which I try to emulate below.

In any event, this is, in my mind, a cozy corner of a library where I share deeper, non-investing thoughts with you, dear reader. It could be a one-time thing, or something more, but here goes…

The X-BOW Ship

Mental Models: Physics/Newton’s 2nd Law, Math/Inversion

Note: The primary mental models are listed above, and I explore those and secondary models below.

This article about the X-BOW hull sparked a fun exploration of mental models and pairs well with the physics book I’m currently reading.

The standard geometry of a ship’s flared hull works great in most cases. The flare adds buoyancy by displacing a nonlinear amount of water as the ship sinks into a wave, returning it quickly to the surface.

But in really rough waters, such as the North Sea, normal ships face a problem. The restoring push overcorrects, causing the recovering ship to slam into the next wave in what’s known as bow flare slamming. The resulting forces can cause damage to the ship and crew.

In the early 2000s, the lead designer of the Ulstein Group noticed that offshore vessels rode more smoothly when driven stern-first (backwards) in rough seas. The company took that idea and designed a ship with an inverted bow hull that slices through waves. Because its submerged volume increases linearly, forces are distributed more evenly, and most bow slamming is eliminated.

There were other, second-order effects too. The X-BOW can operate at higher speeds through rough seas than conventional ships and consumes less fuel.

Primary Models:

Physics/Newton’s Second Law: The slamming effect of the standard hull is momentum (p=mv) reversed over a short period of time. The X-BOW i. doesn’t allow the same amount of momentum to accumulate and ii. reverses it over a longer period of time, reducing the peak force.
Math/Inversion: The designer saw ships riding better in reverse and applied the geometry of the stern to the bow.

Secondary Models:

Math/Calculus: The displaced volume is the hull’s waterline cross-sectional area integrated over depth, which is why the flared hull results in nonlinear growth.
Engineering/Feedback loops: The slamming effect is caused by overcorrection.
Biology/Second-order effects: This comes from Garrett Hardin‘s ecology. “We can never do merely one thing.”
Biology/Evolution: The flared hull became the standard because it worked well in most instances. (Related idea: Lindy Effect)

Note: Buoyancy is a result of gravity, pressure, and Newton’s laws, not a primary model in itself.

That’s it for this week. Hit reply and let me know what you think. What have you been reading that’s worth sharing? Let me know in the comments.

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