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Thursday, 29 November 2018

Weekly Reading - Some Interesting Stuff

A beautiful glimpse into the Bombay Plan, a powerful planning document created by the most powerful businessmen and technocrats of India in 1944, and what it wanted to achieve.
The Bombay Plan’s targets were overwhelmingly more ambitious than anything the Planning Commission of the government of India ever attempted. It had envisaged the doubling of per capita income over fifteen years and proposed appropriate sources of finance for that ambitious target. 

Brian Acton, the founder of WhatsApp, walked away from $850m when he resigned and moved out of Facebook. He speaks at length about that and other aspects. Paints a very poor picture of Facebook as a company. Fascinating read.

Google employees have renewed their public protests against “Project Dragonfly,” a censored and surveillance-enabling search app that Google is reportedly building for the Chinese market.  oogle has said little about Dragonfly, but numerous reports have detailed its planned features, which reportedly range from blocking specific keywords like “human rights” to linking searches with users’ phone numbers.

Verily Life Sciences, a research organisation run by Alphabet, Google's parent company, plans to infect thousands of male Aedes aegypti mosquitoes with Wolbachia, a common bacterium, and release them out in the open. This breed of genetically altered male mosquitoes, which don't bite humans, would then mate with the females, and pass on Wolbachia. Now, if the female mosquitoes lay eggs, those eggs will not hatch!

Food-delivery sites can, in the long run, switch customer loyalty from restaurants to the platform itself. A Swiggy user, for instance, may go for the cheapest or closest option rather than picking a restaurant deliberately. “Once the platforms have enough clout, they can dictate prices or even set up their own kitchens".

This is something which is very concerning and scary for the country, and unfortunately is not getting the importance it deserves from both policymakers and the media.
Employability across education domains are less than 50% across board.



https://qz.com/india/1473437/indian-mba-graduates-get-less-employable-engineers-improving/

Thursday, 22 November 2018

Market View: Be cautious, be on the lookout for sustainable earnings growth

Since the last time I wrote in ET Markets, the biggest macro headwind for India has now taken a few steps back. Oil prices are down from its recent highs and keep going down, bringing down the USD-INR down along with it. The macro analysts continue to fret about the impending state elections, general elections next year, US-China trade war and very recently the US market fall. Somehow, I have always seen that there is something or the other to worry about in the global economy. But as the world has seen, companies have survived and thrived over the last century despite two world wars and countless natural and man-made calamities. The challenge is that everyone wants to get rich in a short period of time. No one has the patience and mental fortitude required to hold on to good businesses over their business cycle. Business results, in general, tend to be mean-reverting, which means over time, great results become mediocre and poor results get better.

Now that quarterly results have mostly come in, they indicate a total revenue growth of 20% on aggregate and around 78% of companies have a positive or flat growth. The results of the universe of stocks I track have been improving in the last two quarters and although everything is not hunky-dory as yet, things are not drastically bad as well. Valuations, however, are still on the higher side. Good businesses with long-term earnings visibility continue to be expensive.

Domestic mutual funds continue to see strong inflows. The share of equity-oriented schemes is now 41.2% of the industry assets in October 2018, up from 38% in October 2017. Equity and equity-linked schemes attracted Rs 12,622 crores, besides, Rs 55,296 crore was invested in balanced funds in October. Inflows into SIP funds were at 7,900 crores, up 42% from last year. A sustained inflow of retail capital into the India markets and especially through mutual funds is a good indication of retail participation. This trend is unlikely to wane in the near future as more and more retail investors get used to their monthly SIPs. I see a lot of similarity between India of today and the early 1980s in the US when the retail investment boom was fueled by the 401(k) plan. The 401(k) in my opinion was one of the main catalysts of the biggest 20-year boom in US markets till 2000 dot-com bust.

An investor makes money essentially by earnings growth and PE expansion. The case for PE expansion in India as of now seems limited as we are already above the average historical PE. Incremental returns in the near future are more likely to come from earnings growth, so as active investors we need to focus on those businesses which are able to generate above-average earnings growth. Some sectors such as Chemicals, Hotels, Paper, IT, Optical Fibre and Cables seem to be doing well and should be kept on our watchlist for deeper study.

This article first appeared in Economic Times ET Market Moghuls section on 22-Nov-2018.


Monday, 19 November 2018

Weekly Reading - Some Interesting Stuff

A breakthrough, if it happens, that has very large consequences to humans. Xenotransplantation using genetically modified pigs for organ "farming" can be a life saver for people.
After years of setbacks, the past two years have seen a cascade of record-breaking xenotransplants using primate models, and researchers are working with regulators to prepare for clinical trials with humans. The first pig-to-human skin graft using live cells is set to take place this month in Boston. At the same time, Tector is readying a clinical trial in which he will install his triple-knockout pigs’ kidneys in dialysis patients who are unlikely to be considered for human-donor organs.


A critical review of "All is well" book factfulness by Hans Rosling. This article argues that Rosling only cherry picked the "good" data and left the difficult and bad data out of his study to present a rosy picture of the world.

Apple is increasingly "milking" its captive user base to sell services and is unable to sell more gadgets.

A wonderful collection of pictures to remind us how smartphones have become all pervasive in our lives.

An article on Shane Parrish, who runs the best blog in the world, in my opinion, and how he got to doing this.

An interesting article on how labour reforms, specifically wage reform, can improve the capitalist system.

Friday, 9 November 2018

Weekly Reading: Some Interesting Stuff

Here is wishing everyone a very Happy Diwali.

Wonderful article on the search for investment edge. Has some wonderful anecdotes.
In 1834, however, the signal from a similar optical telegraph system in France lost its edge when the data became corrupted.
In the world’s first cyber-attack, two bankers bribed a telegraph operator to transmit false information about the bond market to unsuspecting investors in Bordeaux, which would benefit the banker’s positions.


We are not just using plastic, we are eating them too!
If the pieces of plastic were in these people’s digestive tracts, nobody is sure yet how they got there. Some might be coming up the food chain — ingested when we eat creatures that ate plastics, or when we eat creatures that ate creatures that ate plastic, etc. Some may be coming from water bottles and food containers. Other studies have shown that both tap water and bottled water are contaminated with microplastics. A story in National Geographic points out that carpeting and other household items can shed plastic fibers, and that fibers from synthetic clothing are floating around our homes.
Also unknown are the health ramifications, if there are any. In studies of sea birds, ingesting plastic had exposed them to chemicals called phthalates, which are known hormone disrupters.


A very interesting new research on how the potato, brought back by the Spanish from South America in the 16th century to Europe, ushered in an era of high farm productivity, which in turn reduced armed conflict significantly in the following 200 years.


The difference on being humble and being humble :-)

A wonderful compilation of corporate misdemeanors in India by Rudra Chowdhury.

And now, bottled air!!