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Thursday 25 October 2018

Weekly reading: Some Interesting Stuff

An account of how Amazon is working with local shop owners in rural India to bring online shopping to the rural masses

The primary risk is a permanent capital impairment or substantial mark-to-market losses. Any investor who has been putting money to work for some time will know that losses can come hard and fast, erasing years of returns. Avoiding these at all costs is, in my opinion at least, worth sacrificing a few percentage points of returns for.

5 Lessons from Jeff Bezos's 21 Years of Shareholder Letters

Wonderful letter to investors from Rajeev Thakkar of PPFAS mutual fund. Easy to read, takes on some very interesting and often asked questions and discusses about it.

James Clear has recently come out with a new book - Atomic Habits. This article is about how to take small (atomic) actions to create good habits or reduce bad ones.
It is remarkable how little friction is required to prevent bad behavior. When I hide beer in the back of the fridge where I can’t see it, I drink less. When I delete social media apps from my phone, it can be weeks before I download them again and log in.

Friday 19 October 2018

Weekly Reading: Some Interesting Stuff

Extraordinary comparison between the Amazon of today and Sears of a century ago to show how uncannily similar they were.

From the start, Sears’s genius was to market itself to consumers as an everything store, with an unrivaled range of products, often sold for minuscule profits. The company’s feel for consumer demand was so uncanny, and its operations so efficient, that it became, for many of its diehard customers, not just the best retail option, but the only one worth considering.

In the decade between 1895 and 1905, Sears’s revenue grew by a factor of 50, from about $750,000 to about $38 million, according to Alfred D. Chandler Jr.’s 1977 book The Visible Hand: The Managerial Revolution in American Business. (By comparison, in the last decade, Amazon’s revenue has grown by a factor of 10.)

Sears was not content to be a one-stop-shop for durable goods. Like Amazon today, the company used its position to enter adjacent businesses. To supplement its huge auto-parts business, Sears started selling car insurance under the Allstate brand. 

A good profile of how Oberoi Realty is bucking the trend in the crowded real estate market.

To be honest, I had never heard of Robert Vinall before this week. He is the owner and fund manager at RV Capital based out of Frankfurt Germany. His fund completed 10 years and he has written a wonderful letter. It encapsulates a lot of learnings that most of us go through. Definitely worth a read.

From a financial perspective, my sell decisions demonstrate that whilst it is correct to sell when a flaw in the investment case becomes apparent, it is often not when the valuation appears rich. In all but the broadest strokes, the future is unknown and unknowable. Where I know the company and its people well and, crucially, trust them, the surprises have normally been positive. What appeared at the time to be a high valuation, was not.

If you are starting today, my advice is to be fully invested, but only to hold the companies you would own if you knew the economy was on the brink of collapse. Incidentally, this is the correct way to invest all the time.

EU is planning to impose a tax on big Tech (google, facebook etc) based on digital presence rather than physical presence. If implemented, it will open up a new frontier of taxation and my guess is most if not all countries will then follow suit.

Read the full article here: https://www.bbc.com/news/business-45813754

Paul Allen, the co-founder of Microsoft, passed away earlier this week. Here is an obituary written by Bill Gates.

Paul foresaw that computers would change the world. Even in high school, before any of us knew what a personal computer was, he was predicting that computer chips would get super-powerful and would eventually give rise to a whole new industry. That insight of his was the cornerstone of everything we did together.
In fact, Microsoft would never have happened without Paul. In December 1974, he and I were both living in the Boston area—he was working, and I was going to college. One day he came and got me, insisting that I rush over to a nearby newsstand with him. When we arrived, he showed me the cover of the January issue of Popular Electronics. It featured a new computer called the Altair 8800, which ran on a powerful new chip. Paul looked at me and said: “This is happening without us!” That moment marked the end of my college career and the beginning of our new company, Microsoft. It happened because of Paul.

Thursday 11 October 2018

Weekly Reading - Some Interesting Reading

The politics of oil price, inflation targeting by the RBI and import duties present a bleak picture for the Indian economy

The story of Nokia's comeback.

Whitney Tilson ran a reasonably successful fund which he wound up after consistent under-performance. Now, in his new avatar as investment coach to wannabe fund managers, he professes his new, "Make Money" investing style!!
In this presentation, Tilson discusses the pitfalls of both value and growth investing and how he is now combining value and growth in his new strategy.

A very interesting interview of Cliff Asness, one of the pioneers of quantitative investing, discussed on various aspects of quant investing and how it is continuously changing

I usually do not put links to collaborativefund or farnam street blog articles, simply because I expect everyone to read all of their articles. This time I am making an exception, because I think it is very timely for us in India.

"A young investor might have 40 years to save for retirement. But can they withstand a day like yesterday, when the market fell 3.5%? Can they stay optimistic during a deep recession? Avoid chasing what’s done well in the last month? Can they leave their money alone to compound when they’re tempted to buy a boat? You can buy a 10-year bond. Can you put up with a two-year rout?"
"Long-term focus is great. But the long run is just a collection of short runs that need to be managed."

Friday 5 October 2018

Weekly Reading: Some Interesting Reading

I’ve been trading for 15 years now and we’ve made over 50 percent compounded, as a rate of return (each year),” he says, adding, “Nobody can teach you trading; it’s more of a learn by experience kind of a job—each time you make a mistake, you learn from it, and try and avoid that mistake in the future.” -- Nikhil Kamath of Zerodha in Forbes

An extremely good article on how "fake news" is created to manipulate us by using our existing beliefs.
Fake news may now represent an existential threat to democracy, not just because it can be used to subvert and countermand the will of the people, but also because it can be used to destroy the people’s will to act together.
The term “fake news” should not be used to refer to something the reader dislikes or disagrees with.  Likewise, fake news no longer refers to a simple lie. Modern fake news is carefully designed so that its intended readers will not be able to detect that it is false. As importantly, it is crafted individually for each group of readers, to resonate with those readers and to produce the strongest possible emotional response.

A look at how Google is thinking about changing search - moving from answers to journeys, queryless way to get information and use of more visual way of searching.

Google is paying Apple $9 billion in 2018 and $12 billion for remaining the default search engine in Safari browser. All this money for a "free" search service!! So, the question is who owns a user's private data? This article tries to grapple with this question.

Segregating money managers into categories, this article provides an interesting take on the potential evolution of a money manager