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From the article: Lockheed shares fell 0.6 percent to $175.02 amid a broad market selloff. Shouldn't the market be a little more excited about this?

by mrisse 12y ago

jerf 12y ago
It's dangerous to read the market's mind, but my guess is that there isn't enough information for anyone to believe that this is anything more than a PR puff piece. As much as I want to believe it I can't find any evidence myself, either. At this point I'm pretty much at the "show me the over-unity reactor" phase. There's so many research paths to fusion right now that are all "promising", but until one of them actually builds something that works in the real world I'm not personally interested in hearing any more vague promises. By all means fund them and keep working on them! I'm just not interested in the PR pieces any more. Give me a report about how it's working.
patrickk 12y ago
Most likely algorithms trading on technical indicators, nothing to do with this news. Short term price movements are almost total noise.
fsloth 12y ago
I was wondering the same thing. People have claimed to have working fusion reactors just in a few years if they only could have some more funding for so long that anyone who claims to offer a production capable fusion reactor loses their credibility completely until they actually produce one. Skunkworks have as an organization an amazing engineering track record of implementing ground breaking technologies. I wonder what their current status is. Anyone have an inside scoop whether their game is still as sharp?
jcfrei 12y ago
The general consumer sentiment and state of the economy are much more important even for a company such as Lockheed (slow economy > less profits > less taxes > less DoD spending) than unproven (as of now) claims about yet another fusion reactor.
mikeyouse 12y ago
Quick and dirty; Lockheed has a market beta of 0.7 -- So it's correlated with the general market fairly strongly. On aggregate, if the market increases or decreases by 1%, you'd expect Lockheed to follow the market by 0.7%. Today most of the major indices are down ~1%, Lockheed is down 0.4%, so you could attribute that 0.3% deviation from the expected number as reactor news. 0.3% of Lockheed's market cap represents about $170M today. It's obviously not this straightforward, but if I were a shitty journalist, I could make the case that this is actually a pretty good result since commercialization will likely be a decade away, it will take a ton of resources and investment to get there, and there's a high chance of failure. A shitty DCF with a ramp to $500M/year in R&D, 75% margins on sales, and a $10B/year business in perpetuity comes out to $170M NPV with a ~31% discount rate --- Not too unrealistic.

From the article: Lockheed shares fell 0.6 percent to $175.02 amid a broad market selloff. Shouldn't the market be a little more excited about this?

by mrisse 12y ago

From the article: Lockheed shares fell 0.6 percent to $175.02 amid a broad market selloff. Shouldn't the market be a little more excited about this?

jerf 12y ago

It's dangerous to read the market's mind, but my guess is that there isn't enough information for anyone to believe that this is anything more than a PR puff piece. As much as I want to believe it I can't find any evidence myself, either. At this point I'm pretty much at the "show me the over-unity reactor" phase. There's so many research paths to fusion right now that are all "promising", but until one of them actually builds something that works in the real world I'm not personally interested in hearing any more vague promises. By all means fund them and keep working on them! I'm just not interested in the PR pieces any more. Give me a report about how it's working.

patrickk 12y ago

Most likely algorithms trading on technical indicators, nothing to do with this news. Short term price movements are almost total noise.

fsloth 12y ago

I was wondering the same thing. People have claimed to have working fusion reactors just in a few years if they only could have some more funding for so long that anyone who claims to offer a production capable fusion reactor loses their credibility completely until they actually produce one. Skunkworks have as an organization an amazing engineering track record of implementing ground breaking technologies. I wonder what their current status is. Anyone have an inside scoop whether their game is still as sharp?

jcfrei 12y ago

The general consumer sentiment and state of the economy are much more important even for a company such as Lockheed (slow economy > less profits > less taxes > less DoD spending) than unproven (as of now) claims about yet another fusion reactor.

mikeyouse 12y ago

Quick and dirty; Lockheed has a market beta of 0.7 -- So it's correlated with the general market fairly strongly. On aggregate, if the market increases or decreases by 1%, you'd expect Lockheed to follow the market by 0.7%. Today most of the major indices are down ~1%, Lockheed is down 0.4%, so you could attribute that 0.3% deviation from the expected number as reactor news. 0.3% of Lockheed's market cap represents about $170M today. It's obviously not this straightforward, but if I were a shitty journalist, I could make the case that this is actually a pretty good result since commercialization will likely be a decade away, it will take a ton of resources and investment to get there, and there's a high chance of failure. A shitty DCF with a ramp to $500M/year in R&D, 75% margins on sales, and a $10B/year business in perpetuity comes out to $170M NPV with a ~31% discount rate --- Not too unrealistic.