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Friday 28 September 2018

Weekly Reading - Some Interesting Stuff

A fascinating account of a brave journalist covering the drug lord El Chapo of the Sinaloa cartel and how he lost his life for sticking to his professional ethics.

Fitness, not body weight, is what matters.
Studies have found that anywhere from one-third to three-quarters of people classified as obese are metabolically healthy. They show no signs of elevated blood pressure, insulin resistance or high cholesterol. Meanwhile, about a quarter of non-overweight people are what epidemiologists call “the lean unhealthy.” A 2016 study that followed participants for an average of 19 years found that unfit skinny people were twice as likely to get diabetes as fit fat people. Habits, no matter your size, are what really matter. Dozens of indicators, from vegetable consumption to regular exercise to grip strength, provide a better snapshot of someone’s health than looking at her from across a room.

The Android is 10 years old. Today it is ubiquitous in the mobile world. A quick look at the journey. Also, what next? Will Android be replaced by Fuchsia?

Ultimately we will have automation in areas where it is incomprehensible today. The question remains, what then will be the role of humans?
The people who command six-figure salaries to negotiate multimillion-dollar deals with major brands are being replaced by software that predicts what shoppers want and how much to charge for it.

A nice article on Haigreve Khaitan, a man who has built one of the largest and most elite law firms in India. Today its client list includes marquee companies such as Mahindra & Mahindra, Reliance Industries, Vedanta, Aditya Birla Group, Welspun, and JSW Steel. There’s also Tesla, BMW India, Harley Davidson, Volkswagen India, and private equity firms Advent, Apax Partners, Blackstone, Arpwood Partners, and Kedara Capital. Of the top 12 bankruptcy/insolvency cases in corporate India today, Khaitan & Co is working on nine, including Essar, Electro Steel, and ABG Shipyards.

Wednesday 26 September 2018

ET Article - Focus on your stocks

Rudyard Kipling’s famous poem “If” started with these lines, which can be extended to investing as well.
If you can keep your head when all about you   
    Are losing theirs and blaming it on you,   
If you can trust yourself when all men doubt you,
    But make allowance for their doubting too;   
If you can wait and not be tired by waiting,
    Or being lied about, don’t deal in lies
The last one week has been very eventful. For an investor with a reasonably long time horizon, one of the most important things to do, is to take a step back (or rather many steps back) in such situations and focus on the really important aspects. 
Today the noise and chatter on news and social media about credit, liquidity, bond rates, asset liability mismatch has risen to a fever pitch. I am not sure if all the commentators really understand the nuances of the problem or if they are just regurgitating what they are seeing and hearing. I for one, sure don’t understand the intricate details of credit and liquidity crunch well enough to have an informed opinion.  I realize that if liquidity is a problem and it gets big enough to cause major harm, then the authorities will step to provide that liquidity. Much the same way that the US Fed did during the 2008 financial crisis. In well functioning economies, financial systems are not allowed to collapse. Too much is at risk for all stakeholders. As Seth Klarman recently mentioned in his lessons from 2008 article, “The government – the ultimate short- term-oriented player – cannot with- stand much pain in the economy or the financial markets. Bailouts and rescues are likely to occur, though not with sufficient predictability for investors to comfortably take advantage. “
There are other macro headwinds like oil prices and currency fluctuations. Some of these feed off on one another.
With that premise, at times like this, it is always better to take a hard look at one’s portfolio holdings and ask himself these three questions: 
1. What really has changed? 
2. How have the changes affected the value of the investments under consideration? 
3. Am I sure that my analysis and understanding of the changes is rational and is not being overly influenced by the immediacy and the severity of the news?
As investors, our job is to understand the business we are invested in. We need to continue to focus on that business and the reasons why we have bought those businesses. Most of the time we get pulled into fruitless macro discussions, without pausing to ask how it impacts the companies we are invested in.
I am a strong believer in Warren Buffett’s statement that he never has an opinion on the stock market because, if he did, it would not be any good, and it might interfere with opinions that are good. I have tracked the short-term market predictions of many investors and have found that they were correct less than half the time. Bottomline is that no one knows what the future holds. And we can’t make an investment case by looking at the macros.
Another learning over the years is that if I have conviction in a particular stock, it is always prudent to buy on the way down in tranches. Most of the time, we wait till the dust settles, but by that time, the prices are back up again. Buying high-conviction stocks at a time of major uncertainty has proven to be a profitable exercise. 
In ending, let me also say that these are times, when it is good to take a break from the markets and catchup on the book that you always wanted to read or the Netflix or Amazon prime show you always wanted to binge watch but never really had the time 😊

This article first appeared in Economic Times ET Markets - https://economictimes.indiatimes.com/markets/stocks/news/credit-liquidity-bonds-but-what-do-they-have-to-do-with-my-stocks/articleshow/65961776.cms

Tuesday 25 September 2018

Book Review: Phil Fisher - Common Stocks and Uncommon Profits

With so much happening in the Indian markets this week, I thought I will revisit one of my favourite investment gurus - Phil Fisher. His seminal classic Common Stocks and Uncommon Profits and Other Writings is a book that every investor should read. 

These are good times to take a step back from the market and read the classics to reinforce our understanding of the long term nature of markets and try to filter out the short term noise from the actual important signals.

Here are Phil Fisher's 8 principles.

Buy into companies that have practical plans for achieving dramatic long-range growth in profits and that have inherent qualities making it difficult for new entrants to share in that growth.
Focus on buying these companies when they are out of favour. That is, when, either because of general market conditions or because the financial community at the moment has misconceptions of its true worth, the stock is selling at prices well under what it will be when its true merit is better understood.

There are a relatively small number of truly outstanding companies. Their shares frequently can’t be bought at attractive prices. Therefore, when favourable prices exist, full advantage should be taken of the situation. Funds should be concentrated on the most desirable opportunities. 
Hold the stock until either (a) there has been a fundamental change in its nature (such as a weakening of management through changed personal), or (b) it has grown to a point where it no longer will be growing faster than the economy as a whole. Only in the most exceptional circumstances, if ever, sell because of forecasts as to what the economy or the stock market is going to do because these changes are too difficult to predict. Never sell the most attractive stocks you own for short-term reasons.

For those primarily seeking major appreciation of their capital, de-emphasize the importance of dividends. The most attractive opportunities are likely to occur in the profitable, but low or no dividend groups. Unusual opportunities are much less likely to be found in situations where a high percentage of profits is paid to stockholders.
Making some mistakes is as much an inherent cost of investment for major gains as making some bad loans is inevitable in even the best run and most profitable lending institution. The important thing is to recognize them as soon as possible, to understand their causes, and to learn how to keep from repeating the mistakes. Willingness to take small losses in some stocks and to let profits grow bigger and bigger in the more promising stocks is a sign of good investment management. Taking small profits in good investments and letting losses grow in bad ones is a sign of abominable investment judgment. A profit should never be taken just for the satisfaction of taking it.
A basic ingredient of outstanding investor is the ability to neither accept blindly whatever may be the dominant opinion in the financial community at the moment nor to reject the prevailing view just to be contrary for the sake of being contrary. Rather, it is to have more knowledge and to apply better judgment, in a thorough evaluation of specific situations, and the moral courage to act “in opposition to the crowd” when your judgment tells you you’re right.
In handling common stocks, as in most other fields of human activity, success greatly depends on a combination of hard work, intelligence, and honesty.

Thursday 20 September 2018

Weekly Reading: Some Interesting Stuff

By dominating retail and digital business services, both of which touch almost every other industry, Bezos is now positioned to move adjacently into just about any business where he finds added value. He's playing in the multibillions in at least four markets—healthcare, entertainment, consumer electronics and advertising—that constitute many of the companies not already terrified of Amazon.
This is a superb article touching most of the facets of Amazon and Bezos. A must-read.

There is a feeling in Silicon Valley that you can say anything you want to investors as long as you think you’re changing the world.
A great article on a legendary short seller - Jim Chanos.

The next crisis might not come from a financial shock at all. The more likely culprit: a cyber-attack that causes disruptions to financial services capabilities, especially payments systems, around the world.

The onset of stress entices the brain into growing new cells responsible for improved memory. However, this effect is only seen when stress is intermittent. As soon as the stress continues beyond a few moments into a prolonged state, it suppresses the brain’s ability to develop new cells.

I love lists. This one has some wonderful quotes and plain simple advice.

Monday 17 September 2018

Book Review: The Art of Thinking Clearly

The Art of Thinking Clearly by Rolf Dobelli is simply a fascinating book on behavioural finance and psychology. It covers a vast number of cognitive biases and provides practical insights as well. This book is good even for non-investors as well.

I will just provide the contents of the book, which in my opinion provides a fascinating glimpse of what one can expect from the book.

This is a book which can and should be read by all.

The Chapters 
1. Why You Should Visit Cemeteries: Survivorship Bias.
2. Does Harvard Make You Smarter?: Swimmer's Body Illusion.
3. Why You See Shapes In The Clouds: Clustering Illusion.
4. If 50 Million People Say Something Foolish, It Is Still Foolish: Social Proof.
5. Why You Should Forget The Past: Sunk Cost Fallacy.
6. Don't Accept Free Drinks: Reciprocity.
7. Beware The 'Special Case': Confirmation Bias (Part 1).
8. Murder Your Darlings: Confirmation Bias (Part 2).
9. Don't Bow To Authority: Authority Bias.
10. Leave Your Supermodel Friends At Home: Contrast Effect.
11. Why We Prefer A Wrong Map To No Map At All: Availability Bias.
12. Why 'No Pain, No Gain' Should Set Alarm Bells Ringing: The It'll Get-Worse-Before-It-Gets-Better Fallacy.
13. Even True Stories Are Fairytales: Story Bias.
14. Why You Should Keep A Diary: Hindsight Bias.
15. Why You Systematically Overestimate Your Knowledge And Abilities: Overconfidence Effect.
16. Don't Take News Anchors Seriously: Chauffeur Knowledge.
17. You Control Less Than You Think: Illusion Of Control.
18. Never Pay Your Lawyer By The Hour: Incentive Super-Response Tendency.
19. The Dubious Efficacy Of Doctors, Consultants And Psychotherapists: Regression To Mean.
20. Never Judge A Decision By Its Outcome: Outcome Bias.
21. Less Is More: The Paradox Of Choice.
22. You Like Me, You Really Really Like Me: Liking Bias.
23. Don't Cling To Things: Endowment Effect.
24. The Inevitability Of Unlikely Events: Coincidence.
25. The Calamity Of Conformity: Groupthink.
26. Why You'll Soon Be Playing Megatrillions: Neglect Of Probability.
27. Why The Last Cookie In The Jar Makes Your Mouth Water: Scarcity Error.
28. When You Hear Hoofbeats, Don't Expect A Zebra: Base-Rate Neglect.
29. Why The 'Balancing Force Of The Universe' Is Baloney: Gambler's Fallacy.
30. Why The Wheel Of Fortune Makes Our Heads Spin: The Anchor.
31. How To Relieve People Of Their Millions: Induction.
32. Why Evil Strikes Harder Than Good: Loss Aversion.
33. Why Teams Are Lazy: Social Loafing.
34. Stumped By A Sheet Of Paper: Exponential Growth.
35. Curb Your Enthusiasm: Winner's Curse.
36. Never Ask A Writer If The Novel Is Autobiographical: Fundamental Attribution Error.
37. Why You Shouldn't Believe In The Stork: False Causality.
38. Everyone Is Beautiful At The Top: Halo Effect.
39. Congratulations! You've Won Russian Roulette: Alternative Paths.
40. False Prophets: Forecast Illusion.
41. The Deception Of Specific Cases: Conjunction Fallacy.
42. It's Not What You Say, But How You Say It: Framing.
43. Why Watching And Waiting Is Torture: Action Bias.
44. Why You Are Either The Solution - Or The Problem: Omission Bias.
45. Don't Blame Me: Self-Serving Bias.
46. Be Careful What You Wish For: Hedonic Treadmill.
47. Do Not Marvel At Your Existence: Self-Selection Bias.
48. Why Experience Can Damage Our Judgement: Association Bias.
49. Be Wary When Things Get Off To A Great Start: Beginner's Luck.
50. Sweet Little Lies: Cognitive Dissonance.
51. Live Each Day As If It Were Your Last - But Only On Sundays: Hyperbolic Discounting.
52. Any Lame Excuse: 'Because' Justification.
53. Decide Better - Decide Less: Decision Fatigue.
54. Would You Wear Hitler's Sweater?: Contagion Bias.
55. Why There Is No Such Thing As An Average War: The Problem With Averages.
56. How Bonuses Destroy Motivation: Motivation Crowding.
57. If You Have Nothing To Say, Say Nothing: Twaddle Tendency.
58. How To Increase The Average Iq Of Two States: Will Rogers Phenomenon.
59. If You Have An Enemy, Give Him Information: Information Bias.
60. Hurts So Good: Effort Justification.
61. Why Small Things Loom Large: The Law Of Small Numbers.
62. Handle With Care: Expectations.
63. Speed Traps Ahead!: Simple Logic.
64. How To Expose A Charlatan: Forer Effect.
65. Volunteer Work Is For The Birds: Volunteer's Folly.
66. Why You Are A Slave To Your Emotions: Affect Heuristic.
67. Be Your Own Heretic: Introspection Illusion.
68. Why You Should Set Fire To Your Ships: Inability To Close Doors
69. Disregard The Brand New: Neomania.
70. Why Propaganda Works: Sleeper Effect.
71. Why It's Never Just A Two-Horse Race: Alternative Blindness.
72. Why We Take Aim At Young Guns: Social Comparison Bias.
73. Why First Impressions Deceive: Primacy And Recency Effects.
74. Why You Can't Beat Home-Made: Not-Invented-Here Syndrome.
75. How To Profit From The Implausible: The Black Swan.
76. Knowledge Is Non-Transferable: Domain Dependence.
77. The Myth Of Like-Mindedness: False-Consensus Effect.
78. You Were Right All Along: Falsification Of History.
79. Why You Identify With Your Football Team: In-Group Out-Group Bias.
80. The Difference Between Risk And Uncertainty: Ambiguity Aversion
81. Why You Go With The Status Quo: Default Effect.
82. Why 'Last Chances' Make Us Panic: Fear Of Regret.
83. How Eye-Catching Details Render Us Blind: Salience Effect.
84. Why Money Is Not Naked: House-Money Effect.
85. Why New Year's Resolutions Don't Work: Procrastination.
86. Build Your Own Castle: Envy.
87. Why You Prefer Novels To Statistics: Personification.
88. You Have No Idea What You Are Overlooking: Illusion Of Attention.
89. Hot Air: Strategic Misrepresentation.
90. Where's The Off Switch?: Overthinking.
91. Why You Take On Too Much: Planning Fallacy.
92. Those Wielding Hammers See Only Nails: Deformation Professionnelle.
93. Mission Accomplished: Zeigarnik Effect.
94. The Boat Matters More Than The Rowing: Illusion Of Skill.
95. Why Checklists Deceive You: Feature-Positive Effect.
96. Drawing The Bull's-Eye Around The Arrow: Cherry-Picking.
97. The Stone-Age Hunt For Scapegoats: Fallacy Of The Single Cause.
98. Speed Demons Make Safe Drivers: Intention-To-Treat Error.

99. Why You Shouldn't Read The News: News Illusion.

Thursday 13 September 2018

Weekly Reading - Some Interesting Stuff

It is tempting to lay the blame for Nokia’s demise at the doors of Apple, Google and Samsung. Nokia had begun to collapse from within well before any of these companies entered the mobile communications market.

Nokia’s leaders were aware of the importance of finding what they called a “third leg” – a new growth area to complement the hugely successful mobile phone and network businesses. Their efforts began in 1995 with the New Venture Board but this failed to gain traction as the core businesses ran their own venturing activities and executives were too absorbed with managing growth in existing areas to focus on finding new growth.

Nokia also got trapped in its Symbian OS ecosystem. By 2009, Nokia was using 57 different and incompatible versions of its operating system.

Nokia’s decline in mobile phones cannot be explained by a single, simple answer: Management decisions, dysfunctional organisational structures, growing bureaucracy and deep internal rivalries all played a part in preventing Nokia from recognising the shift from product-based competition to one based on platforms.

Interesting article on how China is looking more and more to become self-reliant and independent industrially. Its huge domestic market is becoming more important to Chinese growth. But beyond even that, Beijing’s entire economic strategy is designed to replace critical foreign technology and products with homegrown alternatives it can control. Simply, the Communist Party prefers Chinese to buy Xiaomi phones and Geely cars, not iPhones and Buicks.
That’s exactly what the much-feared “Made in China 2025” program is all about. The plan is to develop new, high-tech industries to compete with and eventually replace foreign rivals, at home and abroad. In that sense, it’s official policy to limit overseas involvement in the economy.

Following the previous article, here is another one which takes a bleaker view of China's future.
On the macro level, China’s growth is likely to continue to decelerate, owing to rapid population aging, high debt levels, maturity mismatches, and the escalating trade war that the US has initiated. All of this will drain the CPC’s limited resources. For example, as the old-age dependency ratio rises, so will health-care and pension costs.
Like the Soviet Union, China is paying through the nose for a few friends, gaining only limited benefits while becoming increasingly entrenched in an unsustainable arms race. The Sino-American Cold War has barely started, yet China is already on track to lose.

Very good coverage of Raghuram Rajan's letter to the Parliamentary committee on bank loans

A peek into how Google can fail. The reliance of Google on ads for revenue will meet a stumbling block when more and more searches move to voice and non-screen based devices like Alexa or Google Home.

A wonderful walk down memory lane to look back over 30 years of making charts and maps for The Economist

Tuesday 11 September 2018

Stock Story: Transpek Industry Ltd

Here is a short stock story on Transpek Industries.

Monday 10 September 2018

Book Review: Essentialism

 Essentialism - The Disciplined Pursuit of Less
Essentialism - The Disciplined Pursuit of Less is authored by Greg McKeown. I read this and Deep Work by Cal Newport in succession. (I will cover Deep Work in another post)

Like the name suggests, Essentialism talks about understanding what is essential to your life and then going ahead and concentrating to do it well. The author argues that following the Pareto Principle, most of the things in life are non-essential. 

I found this book to be a reminder for prioritizing the most important and valuable aspects and ignoring the rest. The concepts in the book are very valuable for an investor. Today, the biggest challenge for investors is not the access to information but on how to filter out the noise. There are hundreds of stock ideas floating around every day on WhatsApp groups, web forums, TV channels etc. Unless we are very clear on what to ignore, we will keep running from one thing to the other without being able to study and understand any one in depth.

Some points I found interesting in the book are as follows:

The pursuit of success can be a catalyst for failure. Put another way, success can distract us from focusing on the essential things that produce success in the first place.
In The Tao of Warren Buffett, Mary Buffett and David Clark explain: “Warren decided early in his career it would be impossible for him to make hundreds of right investment decisions, so he decided that he would invest only in the businesses that he was absolutely sure of, and then bet heavily on them. He owes 90% of his wealth to just ten investments. Sometimes what you don’t do is just as important as what you do.”
“You have to look at every opportunity and say, ‘Well, no … I’m sorry. We’re not going to do a thousand different things that really won’t contribute much to the end result we are trying to achieve.’ ”
“I think it’s critical to set aside time to take a breath, look around, and think. You need that level of clarity in order to innovate and grow.” The demands of each day kept him from really stepping back to get perspective.
As with choice, people tend to think of focus as a thing. Yes, focus is something we have. But focus is also something we do.
“In the age of his celebrity, Newton was asked how he had discovered the law of universal gravitation. ‘By thinking on it continually’ was the reply.… What he thought on, he thought on continually, which is to say exclusively, or nearly exclusively.” In other words, Newton created space for intense concentration, and this uninterrupted space enabled him to explore the essential elements of the universe.
The faster and busier things get, the more we need to build thinking time into our schedule. And the noisier things get, the more we need to build quiet reflection spaces in which we can truly focus.
Our highest priority is to protect our ability to prioritize.
Likewise, in your life, the killer question when deciding what activities to eliminate is: “If I didn’t have this opportunity, what would I be willing to do to acquire it
Peter Drucker believed that “people are effective because they say no”. “We need to learn the slow ‘yes’ and the quick ‘no.’ ”

Friday 7 September 2018

Weekly Reading - Some Interesting Stuff

Here are some articles I read during the week which I found interesting, useful or amusing. Have a great weekend.

Beliefs are almost invincible – the more they’re repeated, the more they’re believed, and the more they’re challenged, the more they’re believed. Thus, the only way to weaken a belief is to let it be – to leave it alone. The longer it’s disregarded the weaker it gets. Any attention, positive or negative, acts as fuel for the fire.

How to de-clutter your mind and keep things simple

Though meant for the iPhone users, this is a great guide on how to minimize distractions from your mobile phone

Extraordinary article on China’s decline from a self-absorbed great empire to an abject victim of global powers was one of the swiftest and most psychologically devastating in history, and it remains a driving force behind the country’s modernization. And all of it began with the Opium War. [requires free login]

Thinking about providing a recurring service required by people can help convert transactions to the subscription model.

How AI is helping model human behaviour in a religious and cultural setting

How Oslo is working to be a model EV city

Thursday 6 September 2018

Book Review: What Works on Wall Street

Since I started investing in 2000, I have read literally thousands of books related to investing, business, biographies, history, behavioural psychology and economics. I have written about a few books on my blog before. Recently, a very close friend asked me to suggest to him a list of 52 books that he would read one a week. In my endeavour to pick some great books across genres, I thought I will start posting book reviews from my notes of some of the books I read, liked and disliked over the years. 

I also intend to add a page to this blog for a ready list of the books. If anyone has any great books they have read and loved, please let me know the name and why you loved it and I will try to add it to my reading list. Happy reading.

Today I will start by posting a brief of a book on quantitative investing that I read this year. I highly recommend this book for all serious investors.

What Works on Wall Street by James O'Shaughnessy.

James O'Shaughnessy was the founder and now Chairman of O'Shaughnessy Asset Management. Patrick O'Shaughnessy, his son, is the host of the extremely good and popular podcast Invest Like the Best (this podcast is a must-listen in my opinion).

The author is one of the pioneers of quantitative investing and has run his firm successfully through multiple market cycles that have proved that his strategies work.

Now to the book. The author starts with traditional active fund management does not work. His approach is to build "indices" or portfolios by various quantitative methods and calculating the performance of the portfolio accurately. He also mentions that it is important to be able to "backtest" his quant strategies over an extended period of time (preferably many decades) to check its reliability across market cycles and events.

The second key concept in the book is that quant strategies help in taking away behavioural biases of the investor. Even the best of investors, often times "goes by the gut" and can make mistakes. He stresses on building models based on "factors" which better determinants of value. He discusses a number of ratios in the book and how to use them in models including their deficiencies.

The book then goes on to explore multi-factor models to improve performance. He also discusses using bringing value and growth factors together in his models, understanding base rates and worst-case scenarios of the strategy that is built.

Some snippets of his wisdom:
If you can’t use strategies, and are inexorably drawn to the stock of the day, your returns suffer horribly in the long run.
The point is that, at some other time in the future, any of the strategies in this book will underperform the market, and it is only those investors who can keep their focus on the very long-term results who will be able to stick with them and reap the rewards of a long-term commitment. Nevertheless, you should always guard against letting what the market is doing today influence the long-term investment decisions you make.
Always focus on strategies whose effectiveness is proven over a variety of market environments. The more periods you can analyze, the better your odds of finding a strategy that has withstood a variety of stock market environments.
There is no point in using the riskiest strategies. They will sap your will, and you will undoubtedly abandon them, usually at their low. Given the number of highly effective strategies, always concentrate on those with the highest risk-adjusted returns.
Unless you’re near retirement and investing only in low-risk strategies, always diversify your portfolio by investing in several strategies.

Note: There are 2 comments about this book that I will make before closing. 
1. This is not an inexpensive book. However, the way I personally think about it is that I am getting the entire lifetime's experience of the author for a couple of thousand rupees. That to me is a bargain.
2. This book may not gel well with "value investors" at first due to its approach. However, it is important to understand the concept of strategies and factors. This book is worth a read just to understand these two concepts.

Wednesday 5 September 2018

Sweden is Going Cashless

I was reading an interesting piece on how Sweden is expected to go cashless by 2023. Some interesting snippets from it are below:

This is possible in Sweden because even though cash is a legal tender, contract laws have a higher precedence than banking and payment laws here. If a store puts up a sign that it does not accept cash, then you, as a customer, have entered a contract or an agreement with that store that they don’t accept cash. But in other countries, like Denmark for instance, payment laws have higher precedence than contract laws. In those countries, if something is a legal tender, then according to the law a store must accept it. This is one of the key reasons why Sweden is more cashless than other countries — because of its legal framework.
... in the early 2000s, the central bank decided to outsource its printing and distribution of cash. The central bank said it didn’t see cash as its core business.
Something unique to Sweden was a spate of robberies which resulted in the unions of various organizations like bank employees, bus drivers, cab drivers and others pushing for a cash-free society in order to protect their members. In 2007, in an effort to transform black-market work to white-market work, the government introduced tax deductions for domestic services like home repairs, baby-sitting, laundry and so on. This meant that people did not need to keep cash to pay for these services. It led to a dramatic drop in the need for cash. 
In 2015 to 2017, Sweden replaced its existing notes and coins with new ones. When this happened, cash was deposited into accounts but not all of it was taken out. 

An advantage of a cashless society is that it will be easier to trace criminal activities and we might be able to block some of them. The disadvantage is that everyone can be traced. We will be more traced than we are today. We will lose our privacy.

Read the full article here - http://knowledge.wharton.upenn.edu/article/going-cashless-can-learn-swedens-experience/