This week’s readings/links:

The coming disruption: Scott Galloway predicts a handful of elite cyborg universities will soon monopolize higher education.

Interesting read; deliberately provocative for sure, but I think he is directionally right in terms of some of his arguments and predictions. While different models can and will coexist, some existing ones will certainly need to evolve. A couple of other thoughts, in no particular order: 

• On enrollment expansion, while one way to do that is to increase the existing class size, another is to keep the class size the same but to overlay multiple classes within the calendar year. Traditional higher education is perhaps one of the few real estate-intensive services that gives seemingly little thought to asset utilization. Consider that students attending universities in the US and UK are probably out of school somewhere between 4-5 months a year, on average. Some would argue that time is necessary for students to reflect, pursue other interests, internships and so on – fair enough. But, as a result, universities also have their campus unutilized or under-utilized for almost half of each year. So why not introduce another track / class of students? For example, with a trimester system of 4 months each, you could enroll 3 classes per year, but only have 2 classes on campus at any one time. One class would be on break or pursuing internships every 4 months. Now, you spread the largely fixed operating costs (e.g. professor salaries, administration) over a larger student body. The incremental teaching hours and administrative work aren’t likely to be burdensome. This also works quite well if you have a largely local or regional student body who can commute to school, as you don’t need to build additional housing capacity. Finally, it gives employers access to interns throughout the year rather than only in the northern hemisphere summer months (where workloads are typically the lightest as many people are on holiday).
• Next, I think that some universities, especially those with more limited resources, would perhaps increase their chances of long-term survival if they were to specialise further instead of trying to be everything to everyone. Competing for students on this “breadth + quality of offering” metric (e.g. we offer more majors, better athletic facilities, nicer dorms) seems to be another reason for the unsustainable cost structures we are seeing across higher education. By the way, students kind of do this already in terms of the primary reason why they pick certain universities: X is good for engineering, Y for football, Z for film school and so on. I think there is certainly value in a multi-disciplinary education, but there’s also no reason this can’t be achieved by allowing students to cross-enroll at partner universities with other specializations.
• Finally, while universities might increasingly partner with technology companies in terms of delivery model, so should they partner more with employers in terms of learning outcomes. For example, employers perhaps ought to be more involved in curriculum development, whether they are regularly providing their feedback/input or even actively developing co-op programs with universities. If the argument is that employers are simply outsourcing part of their filtering process to universities, can that employer-student relationship start earlier? Can you be hired on a training program when you start university, complete your work experience every year in exchange for the employer covering part of your costs, and then retain an option for full-time employment after university (with no obligation to either the student or employer)? Something along the lines of the apprenticeship model that exists in Germany.

Friday night musings: Uranium location spreads, seasonality and what we’re watching now.

For readers who are interested in or are following developments in the uranium market, this is a good piece looking at the potential reasons why we might be seeing wider location spreads vs. historically between the pricing at Cameco’s Port Hope, Converdyn’s Metropolis and Orano’s Comurhex facilities. In the last section, they also briefly discuss why fuel buyers and other market participants might not be electing to play this arbitrage, Yellow Cake plc’s discount to NAV and the Russian Suspension Agreement renegotiation as the catalyst to watch during the second half of this year.

Ashmore: Macroeconomic control regimes.

Keep in mind that Ashmore is an emerging markets investment manager, but Jan Dehn does make an interesting argument about the choices and trade-offs facing investors today, given increasing central bank intervention in developed markets.
In his words, “avoiding these macroeconomic control regimes means earning more in yield and being invested in sustainable stories, but experiencing plenty of volatility. Staying in the control regimes ensures a far less volatile ride, because governments gradually remove more and more of the noise, but returns are low and will diminish further over time and one day the whole thing will come crashing down.” He may be right but, unfortunately, I think we will have larger problems than relative emerging vs. developed market allocations should that day come.

On the topic of central bank intervention, several friends/readers have suggested that I watch Princes of the Yen, which I understand is a based on a book by the economist Richard Werner. It’s available for free on both YouTube (embedded below) and Vimeo. I haven’t seen it yet, but plan to move it further up my list.

Hin Leong Trading: Time to reconsider regulatory framework for private companies (in Singapore).

In light of the Hin Leong fiasco, Professor Mak Yuen Teen argues that while listed companies should continue to be subjected to stricter rules, perhaps it is time to raise the bar for large private companies whose activities affect a large number of stakeholders.
Part of the problem was the Lim family’s corporate structure, which consisted of ~80 private companies, including EPCs. Many operated within a regulatory framework based on minimal disclosures and lower auditing standards. The structuring of the business allowed the family to take on significant risks, while enjoying the limited liability protection of the corporate structure. 

Hugo de Stoop: Euronav upbeat on oil demand, prospects post-storage boom.

Short interview covering the latest developments in crude oil markets, the company’s IMO 2020 strategy and the challenge of operating vessels under quarantine and lockdown measures.