You keep talking of VG investors. Isn't VG wholly owned by the Virgin Group?
If so, it probably isn't a significant expense for the parent company.
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On Fri, 4/6/18, William Claybaugh <wclaybaugh2@xxxxxxxxx> wrote:
Subject: [AR] Re: VSS Unity powered flight
To: arocket@xxxxxxxxxxxxx
Date: Friday, April 6, 2018, 8:50 PM
Henry:
I generally use the 10 year treasury
rate at the time of investment for discounting; that is the
lowest risk alternative investment. Corporate investors
often use their cost of capital, which is always much higher
than the treasury rate.
That said, VG’s investors would be
better off today if they had put their money in a
non-interest bearing checking account; they would only have
lost 1-2% per year....
Bill
On Fri, Apr 6, 2018 at
8:36 PM Henry Vanderbilt <hvanderbilt@xxxxxxxxxxxxxx>
wrote:
Meanwhile, the competition for a
prudent investor includes 10-year
T-bills at around 2.8%, and a very volatile stock market at
an average
P/E over the last year of 23.5 and over the last 10 31.7.
IOW, ~3-4%
earnings, plus of course any potential cap gains (currently
extremely
uncertain over the medium term.)
Which is mainly to question some of your detail assumptions,
not your
overall methodology. The investment benchmarks to beat
aren't currently
(or likely in the medium-term) nearly as high as the
longer-term numbers
you indicate.
Even so, yes, VG having spent something north of $600m to
achieve its
limited results to date is not encouraging.
Entirely aside from that, I'm inclined to question VG as
an investment
based on their dogged pursuit of large nitrous hybrids in
the face of
still-after-ten-years unresolved technical uncertainties.
At least until I see uncut video of a full-duration flight
burn with no
obvious evidence of serious roughness or instability.
(Possibly they've
solved all that, mind, and I do wish them the best. But
viable
full-performance propulsion hasn't been publicly
demonstrated yet.)
Henry
On 4/6/2018 6:01 PM, William Claybaugh wrote:
Please read more carefully: *in the long run* 10 yeartreasury bills
yield 7% *on average*.
A prudent investor buys when they are above average andholds to
maturity; I fondly remember the 17% t-bills of the late1970’s....
Bill
On Fri, Apr 6, 2018 at 6:55 PM Paul Mueller <paul.mueller.iii@xxxxxxxxx
<mailto:paul.mueller.iii@xxxxxxxxx>>wrote:
I thought T-bills were about 4% and equitiesabout 7% (and hardly
safe). Those banks and mortgage companies mustbe pretty dumb to
loan for 30 years at 4.5% (and have to deal withthe occasional
foreclosure) if they could get 7% guaranteedfrom T-bills in only 10
years. Doesn't pass the sniff test to me. Weare both talking APRs,
right?
On Fri, Apr 6, 2018 at 5:45 PM, WilliamClaybaugh
<wclaybaugh2@xxxxxxxxx<mailto:wclaybaugh2@xxxxxxxxx>>
Paul:
In the long run, ten year treasury bondsaverage 7%. Equities
average 11-12%.
It is way past too late for the investorsin VG to get there
money back; that is just math that you cando yourself: some
things are knowable in advance.
Bill
On Fri, Apr 6, 2018 at 3:25 PM PaulMueller
<paul.mueller.iii@xxxxxxxxx<mailto:paul.mueller.iii@xxxxxxxxx>>
wrote:
I'm aware of the concept of timevalue of money. 7% is a
pretty good return, especially for"safe" investments (even
after interest rates finally went uprecently after about a
decade of being paltry). I guess weshould all buy houses
and get mortgages at 4.5% interest,rent them out, and then
take the rent money and invest it at7%. Pretty sweet deal!
It took 7 years for Amazon togenerate a profit, and it's
doing OK from what I hear. I'mnot saying that VG will be
commercially successful, just sayingit's still too early to
KNOW that it will fail.
Changing out fuel grains can be moreof a hassle than
loading liquid propellants, but notnecessarily. They will
probably need some flight-lineinfrastructure to do it,
similar to what the AF uses to load2000-lb bombs (and
bigger) onto aircraft. I don'tsee that as a show-stopper
but it will probably take some timeto develop a mature
operational process. Liquidpropellants also have hassles of
their own...ground infrastructure ortanker trucks (limited
to smaller vehicles). Nitrous can bemore of a hassle than
LOX, but at least it can be storedand transported without
loss. Once again, a good operationalprocess may take some
time to develop.
On Fri, Apr 6, 2018 at 2:15 PM,Henry Spencer
<hspencer@xxxxxxxxxxxxx<mailto:hspencer@xxxxxxxxxxxxx>>
On Fri, 6 Apr 2018, PaulMueller wrote:
I'm also not clearon what is inherently wrong with
their
concept...horizontallaunch, reusable first stage
(WhiteKnight),suborbital
only, hybrid propulsion,nitrous oxide oxidizer,
feathering,horizontal
runway landing? Or acombination of these? Or
something elseentirely?
I can't speak for Rand,but I would guess it's hybrid
propulsion, with a side orderof nitrous oxide oxidizer.
:-) The rationale for thechoice of propulsion system
was weak from the start, gotweaker with a fatal nitrous
accident, got weaker stillwith all the fuel
difficulties they've beenhaving, and definitely isn't
going to hold up well insustained use.
A nitrous hybrid mightperhaps, arguably, have been the
preferred way to win theX-Prize. But anybody's who's
got to load a new multi-tonfuel grain into the vehicle
for every flight is notplanning for a serious flight
rate. To make money, you*want* a serious flight rate,
and that puts a *big* premiumon a vehicle design whose
only consumables are liquidsyou pour into tanks.
There are some other issueswith things like CG
management, but the sheerawkwardness of refueling is
probably at the top of the"why big hybrids are a bad
idea for reusables"list.
Henry