Friday, 14 June 2019

Weekly Reading - Some Interesting Stuff

1) No more laundry - how will detergent companies handle this disruption??!!
Unbound is part of a broader wave of startups designing clothes that require less laundering. An eco-friendly brand called Pangaia, which launched late last year and already counts celebrities like Jaden Smith and Justin Bieber as fans, creates $85 seaweed fiber T-shirts that are treated with peppermint oil to keep the shirts fresher longer between washes. The brand estimates that this will save about 3,000 liters of water over the course of a lifetime, compared to a regular cotton T-shirt. Then there is menswear label Wool & Prince, which creates everything from $128 oxford shirts to $42 boxer briefs out of wool, all designed to be washed infrequently. Last year, the company launched a sister womenswear brand called Wool& that makes dresses that can be worn for 100 days straight without washing.

2) Alpha in investing is derived from behavioral psychology
Alpha is finance-geek speak for an investor’s skill that allows her to outperform an index. In a sense, all alpha is behavioral. Whether you follow an algorithm (set of automatic rules) to select investments, decision rules, gut feeling or all three. It is a human who is making the trading decisions. (Even an algorithm is programmed by humans, with all their biases and skills.)
The most direct thing individuals can do to reduce their negative alpha, is to trade as little as possible, minimize costs and above all, keep it simple. Behavioral alpha is about building our skills and knowledge about both the financial markets and our own decision-making processes. The first job is to avoid the costly mistakes.

3) A new digital bank in Brazil is shaking up the traditional banking industry
Not many people are familiar with Nubank, a digital bank that has become the most valuable startup in Latin America by extending credit cards to the unbanked and challenging the financial system of one of the world’s biggest markets, Brazil. Brazil is a particular opportunity — 55 million people there don’t have access to a bank, primarily in the country’s poorest households. Even Brazil’s own government has criticized the country’s banks for gouging locals for “excessive” profits, with the country’s economic chief saying this week that insufficient competition had led to a “cartelized” economy. The top five banks in Brazil, led by Itaú Unibanco, control about 82 percent of assets that are banked. Nubank announced last month that it was expanding to Mexico, where it plans to launch credit cards later this year. The company envisions serving millennial customers all across Latin America and possibly could represent a way for younger, internet-connected customers to avoid the bureaucracy found commonly in their home countries.

4) I have been wondering why I see a lot more bearded men all around these days. Two interesting articles giving a perspective on this.
The razor industry nervously recorded a 5 percent decline in sales last year as men’s shaving frequency has continued to decline; producers of shaving accouterments have tried to cut prices and diversify into new grooming products, having apparently accepted that our beards are here to stay.
We can thank the Global War on Terror and the reluctance of military leaders to impose discipline on special operations forces.The war on terror widened, and more tactical operators—Green Berets, Seals, Rangers—got explicit or tacit approval from military higher-ups for their beards while on missions in the Middle East and Southwest Asia, once-unheard-of exceptions to the services’ longstanding grooming regulations, which had posited that facial hair might run counter to good order and discipline. The evidence of this is the proliferation of beards in the military, which now extends to civilian society. We worship the post-9/11 military operator.

5) An investigative report on Eros International
Eros’s key Indian operating subsidiary had its credit rating lowered 10 notches to “default” by CARE ratings, the second largest Indian ratings agency. The issue, according to CARE was “a slowdown in collection from debtors”.
After extensive on-the-ground research in India, interviews with multiple former employees, and a detailed review of Indian private company filings, we believe the underlying problem is that a significant portion of Eros’s receivables don’t actually exist.
We have uncovered details of highly irregular related-party transactions. For example, Eros has directed $153 million to a supposed production company based in tiny office located in a residential Mumbai slum. The entity is operated by the brother-in-law of Eros’s Chairman and CEO.
We have also documented what we believe to be multiple undisclosed related-party transactions that appear designed to hide receivables.
It is hard to imagine Eros’s equity makes it out of this scenario intact. We expect the price of both the BSE and NYSE stock to end up worthless, barring some sort of bailout from a friend of Eros’s leadership.
In our opinion, this situation has arisen due to a complete failure of Eros’s auditor, Grant Thornton, to apply even basic scrutiny to Eros’s financials.

Thursday, 6 June 2019

Weekend Reading - Some Interesting Stuff

1) The chocolate we eat is produced by child labour and no one is doing anything about it
Mars, Nestlé and Hershey pledged nearly two decades ago to stop using cocoa harvested by children. Yet much of the chocolate you buy still starts with child labor. The farms in Ivory Coast  form the world’s most important source of cocoa and are the setting for an epidemic of child labor that the world’s largest chocolate companies promised to eradicate nearly 20 years ago.
About two-thirds of the world’s cocoa supply comes from West Africa where, according to a 2015 U.S. Labor Department report, more than 2 million children were engaged in dangerous labor in cocoa-growing regions.
One reason is that nearly 20 years after pledging to eradicate child labor, chocolate companies still cannot identify the farms where all their cocoa comes from, let alone whether child labor was used in producing it.

2) Puncture-proof tires, at last
Michelin is developing a tire called the Uptis (or Unique Puncture-proof Tire System), which is a tire that cannot ever go flat or blow out because it doesn’t require oxygen to stay rigid. Instead, the Uptis features an internal system of flexible spokes that support the tire.
Airless tires are not an entirely new idea. They already exist in the world of cycling, and even Michelin sells something called the Tweel for lawnmowers. The Tweel looks a whole lot like a mini version of the Uptis, with the same rubbery spokes in the middle of the tire. As the Tweel’s marketing materials explain, those spokes don’t merely replace the need for air, they work like mini shock absorbers, deforming to bumps to ensure a smoother ride than a bouncier, inflated tire offers today. Yet the car industry has been shy to adopt airless tires because, when properly contained, air is in many ways the perfect material for a tire. Air is virtually weightless, so it doesn’t impact a vehicle’s performance and efficiency. Air can also be hit with bump after bump and it doesn’t lose any structural integrity. After all, it’s just air.

3) We are eating microplastics!
Every day we are ingesting tiny, often microscopic pieces of plastic -- "microplastics" -- with our food, beverages and with the very air we breathe.
Those who exclusively drink bottled water rather than tap water can add up to 90,000 plastic particles to their estimated annual total.
The full impact on our health isn't known. Research shows some particles are small enough to enter our tissues, where they can trigger an immune reaction, or release toxic substances and pollutants absorbed from the environment, including heavy metals.

4) Overtourism is a new phenomenon
Late in May, the Louvre closed. The museum’s workers walked out, arguing that overcrowding at the home of the Mona Lisa and the Venus de Milo had made the place dangerous and unmanageable.
This phenomenon is known as overtourism. That has led to environmental degradation, dangerous conditions, and the immiseration and pricing-out of locals in many places.
The root cause of this surge in tourism is macroeconomic. The middle class is global now, and tens of millions of people have acquired the means to travel over the past few decades. International-tourist arrivals around the world have gone from a little less than 70 million as of 1960 to 1.4 billion today: Mass tourism, again, is a very new thing and a very big thing.
A number of places have implemented or expanded or proposed tourist taxes, among them Amsterdam, Bali, Edinburgh, Ireland, Rome, and Venice. These levies on hotels and day trips both reduce the number of visitors to a given place and provide it with revenue to improve infrastructure and defray the damage that tourists inevitably cause. Governments are also rolling out regulations, such as bans on tour buses in Rome and gating-and-ticketing in Barcelona.

5) Away, creating Instagram-friendly luggage, bets on the overtourism boom
The startup world has a new unicorn, and its name is Away. Away joins the ranks of other “unicorns” — private companies worth over $1 billion— like Slack and WeWork.
The global industry for luggage will be worth nearly $55 billion by 2025, according to one estimate by Hexa Research.
Away boasts a direct-to-consumer model that helps them stay out of the red. “We’re profitable on each suitcase that we sell,” Rubio told Yahoo Finance. In just over 3 years in business, Away has sold over a million suitcases— and is on track to make $300 million in revenue this year. It has plans to open 50 more stores in the next few years.

Friday, 31 May 2019

Weekend Reading - Some Interesting Stuff

1) Can cancer be treated by bioelectricity?
The human body—including the brain—runs on electricity - the movements of mostly positively charged ions of elements like potassium, sodium, and calcium.
Two recent meta-analyses concluded that amplifying the natural wound current with electrical stimulation prevented them all from getting worse, and even healed some of the worst ones completely. Electrical stimulation almost doubles their healing. Similarly intriguing results have been obtained for non-healing diabetic wounds—the kind that lead to the amputation of limbs, which usually leads within a few years to death.
Cancer is beginning to be viewed increasingly as a failure of communication; a misregulation of the field of information that orchestrates individual cells’ activities towards functioning as part of a normal living system. Individual cells “forget” they are part of a larger whole and treat the rest of the body as an environment whose resources can be exploited to feed themselves.
In 2013, Levin’s group showed that they could prevent or reverse some tumors in tadpoles by using drugs to target their bioelectric signaling. The same drugs could turn cancer on and off at a distance, by treating the environment, not the cells themselves.
The broader implication still is that within the next decade, we could learn enough about bioelectricity to change how cell networks communicate and make decisions about how they grow and develop. New computational modeling tools will be a major factor here.

2) China's food delivery app boom has an odd fallout - plastic
The astronomical growth of food delivery apps in China is flooding the country with takeout containers, utensils and bags. And the country’s patchy recycling system isn’t keeping up. The vast majority of this plastic ends up discarded, buried or burned with the rest of the trash.
Scientists estimate that the online takeout business in China was responsible for 1.6 million tons of packaging waste in 2017, a ninefold jump from two years before. That includes 1.2 million tons of plastic containers, 175,000 tons of disposable chopsticks, 164,000 tons of plastic bags and 44,000 tons of plastic spoons.
More plastic enters the world’s oceans from China than from any other country. Plastic can take centuries to break down undersea.

3) Sustainable growth is more important than PE multiple
The reason that Wal-Mart produced a fantastic return from 1974 to now is not that it was cheap relative to its present or near-term future earnings.  By the standards of 1974, it was actually a growth stock–priced at almost twice the market multiple.  In the current market, an equivalent valuation would be something like 30 or 40 times earnings–for a business with uncomplicated earnings that had already been in operation in Arkansas for three decades.  It produced a fantastic return because it was a fantastic business, with miles and miles of growth still in front of it.

4) The way to master more things is to simply focus on one thing right now
When you begin practicing a new habit it requires a lot of conscious effort to remember to do it. After awhile, however, the pattern of behavior becomes easier. Eventually, your new habit becomes a normal routine and the process is more or less mindless and automatic.
The counterintuitive insight from all of this research is that the best way to change your entire life is by not changing your entire life. Instead, it is best to focus on one specific habit, work on it until you master it, and make it an automatic part of your daily life. Then, repeat the process for the next habit.

5) Walk 5000 steps a day, not 10,000 for the health benefits
There's nothing magical about the number 10,000.
In fact, the idea of walking at least 10,000 steps a day for health goes back decades to a marketing campaign launched in Japan to promote a pedometer. And, in subsequent years, it was adopted in the U.S. as a goal to promote good health.
In fact, women who took 4,400 steps per day, on average, were about 40 percent less likely to die during the follow-up period of about four years compared with women who took 2,700 steps.
The benefits of walking maxed out at about 7,500 steps. In other words, women who walked more than 7,500 steps per day saw no additional boost in longevity.

Monday, 27 May 2019

An Overview Of The Markets

Some time back I shared this with the members of the Intelsense advisory services. 

Friday, 24 May 2019

Weekly Reading - Some Interesting Stuff

1) Finland is teaching school students how to identify fake news (and we should follow suit)
As the trolling ramped up in 2015, President Sauli Niinisto called on every Finn to take responsibility for the fight against false information. A year later, Finland brought in American experts to advise officials on how to recognize fake news, understand why it goes viral and develop strategies to fight it. The education system was also reformed to emphasize critical thinking.
“It’s not just a government problem, the whole society has been targeted. We are doing our part, but it’s everyone’s task to protect the Finnish democracy,” Toivanen said, before adding: “The first line of defense is the kindergarten teacher.”
The students broke off into groups, grabbing laptops and cell phones to investigate their chosen topics – the idea is to inspire them to become digital detectives, like a rebooted version of Sherlock Holmes for the post-Millennial generation.
Her class is the embodiment of Finland’s critical thinking curriculum, which was revised in 2016 to prioritize the skills students need to spot the sort of disinformation that has clouded recent election campaigns in the US and across Europe.

2) The slow building of the second iron curtain - China and US fight it out with Huawei caught in the crosshairs
The worries about Huawei have historically stemmed from the fact that the company’s founder, Ren Zhengfei, was a technician for the People’s Liberation Army prior to founding Huawei — not to mention the tens of billions of dollars the Chinese government has invested in the company. Fears have been exacerbated in the wake of China’s passage of its National Intelligence Law and other cybersecurity laws in 2017, which, according to Lake, “compel corporations to assist in offensive intelligence operations” instead of just requiring them to cooperate with law enforcement on national security matters.

3) India starts spending meaningfully for solar energy
India's investments in renewable sources are now outpacing those in fossil fuels. The falling costs of bringing solar power online as well as favourable government policies have seen solar’s star rise in recent years. At a time when other nations are curbing coal use, India is bucking the trend and the vast majority of the country is still powered by fossil fuels, mostly coal.

4) One of the oldest industries (meat industry) is about to be disrupted by factory produced meat
In the foothills of a mountain in a rural part of Japan northwest of Tokyo, a farm called Toriyama painstakingly breeds and raises cattle to make Wagyu beef–delicately marbled meat that sells for around $100 a pound. In a lab in San Francisco, food scientists now plan to recreate Toriyama’s meat in a bioreactor.
The best way to deal with the meat challenge is just to make better meat without all the issues associated with killing animals today.” Those aren’t just issues of animal ethics; the meat industry is also one of the world’s largest contributors to climate change. The basic techniques aren’t new and have been used in medical research for decades–for example, in tissue engineering of organs for drug discovery. The company still has major challenges ahead. After researchers figure out how to make cells grow quickly enough to address cost issues, it will move its focus to flavor; the nutrients fed to the cells can be tweaked to affect the taste of the meat.

5) How could auditors miss the issues in IL&FS?
There are a host of allegations against the auditors, from missing out on the sprawling IL&FS subsidiary empire and not highlighting the asset-liability mismatch on the company’s books, to inappropriate valuation of assets, poor recognition of non-performing assets (NPAs), and non-detection of circular rotation of funds between group entities.
The glaring failures prompted the government to set an example with this case. “Do the auditors work for the management or for stakeholders. Can auditors blindly accept the version of the management and rely on comfort from management?" asked a senior SFIO officer.

Friday, 17 May 2019

Weekend Reading - Some Interesting Stuff

1) 4D printing can help objects transform based on external stimuli
3D printing has helped companies use that data and information to address some of these demands, allowing them to customize product designs in ways that are difficult, if not impossible, to replicate with conventional manufacturing. Considered an extension of 3D printing, 4D printing has the potential to take customization a step further by enabling 3D-printed parts to transform their shape in response to external stimuli such as heat, light, pressure, and humidity. In practical terms, this means 4D-printed objects can theoretically react much more dynamically, rather than remaining as rigid, solid structures. In the future, it may be possible to envision a time when products created with 4D printing can adapt and adjust to their surroundings, in addition to being customized to fulfil user needs.

2) Utilizing a margin of safety can serve you well in nearly any area of life
All information—no matter how bulletproof it may seem—comes with some degree of error. The future is uncertain and life always seems to get more complicated. A margin of safety acts as a buffer against the unknown, the random, and the unseen.
The world is more uncertain now than ever before. There is too much information for one person to handle, too many moving pieces for one person to manage. This is why the greatest benefit that a margin of safety provides might be reduced stress and overwhelm. Nobody can predict the future, but there is a sense of quiet confidence that comes over you when you know you are capable of handling the uncertainties of life.
If your life is designed only to handle the expected challenges, then it will fall apart as soon as something unexpected happens to you. Always be stronger than you need to be. Always leave room for the unexpected.

3) US-China Trade war can escalate and lead to long term changes in supply chains
U.S. trade policies that are not rooted in economic considerations but are driven by political postures could prove costly for U.S. businesses and consumers, in addition to eroding the country’s leverage in global trade.
If people start to think this [trade war with China] is a lasting phenomenon, you could see significant dislocations,” he added. “You could see companies relocating their supply chains; in some cases, that’s going to be moving production into China to avoid tariffs on goods exported from the U.S., and in some cases [it could mean] moving sources out of China to countries that don’t face the tariffs that China does – all that could be very disruptive.”

4) How Amazon Prime came to be one of the greatest retail innovations ever
Amazon Prime launched in February of 2005, was a first of its kind: For an upfront payment of $79, customers were rewarded with all-you-can-eat two-day delivery on their orders. At the time, Amazon charged customers $9.48 for two-day delivery, meaning if you placed just nine of these orders in a year, Prime would pay for itself.
With it, Amazon single-handedly — and permanently — raised the bar for convenience in online shopping. That, in turn, forever changed the types of products shoppers were willing to buy online. Need a last-minute gift or nearing the end of a pack of diapers? Amazon was now an alternative to the immediacy of brick-and-mortar stores.
This is the story of how the greatest retail innovation of the internet age was created, in the face of sound logic and reason that suggested it might very well be disastrous. It’s also a story of how a frankly bland idea — fast shipping — was powerful enough to alter consumer psychology forever.

5) How experts make mistakes and how only some learn from it
In Tetlock’s 20-year study, both the broad foxes and the narrow hedgehogs were quick to let a successful prediction reinforce their beliefs. But when an outcome took them by surprise, foxes were much more likely to adjust their ideas. Hedgehogs barely budged. (Hedgehogs knew “one big thing,” while the integrator foxes knew “many little things.”) Some made authoritative predictions that turned out to be wildly wrong—then updated their theories in the wrong direction. They became even more convinced of the original beliefs that had led them astray. The best forecasters, by contrast, view their own ideas as hypotheses in need of testing. If they make a bet and lose, they embrace the logic of a loss just as they would the reinforcement of a win. This is called, in a word, learning.

Thursday, 9 May 2019

Weekend Reading - Some Interesting Stuff

1) Do nothing to achieve more
All of us have a problem with busyness. But being busy and being successful are not one and the same. But, doing less or nothing at all is easier said than done, especially in a society that suffers from extreme busyness. Bill Gates attributes much of Microsoft’s success to the big ideas and concepts he stumbled upon while doing nothing.
On either Saturday or Sunday, force yourself to step away from all forms of technology — a practice known as a digital sabbath. Shut off your smartphone and hide it in your closet. Power down the laptop and slide it under your bed. Give your brain space to think by stepping away from the daily grind and doing nothing. Your mind will have time to stumble upon new ideas and further process old ones.

2) Can you do better by working 4 days-a-week?
A 4-day work-week is being discussed by a lot of corporates and productivity experts. Here is one company in Australia which has tried it.
A mid-week break lets staff go to the gym, get on top of housework, look after young children, schedule appointments, work on their start-up or just watch Netflix. Sometimes, they’ll catch up on work. Sick days are down, staff satisfaction is up, says Blackham. “You get that Monday feeling a couple of times a week.”
For employers, shutting down mid-week gives “more bang for your buck”. he says. “The Wednesday break means you return to Thursday fresh, and this is when people feel most productive.”
Some start-ups which have trialled the four day week in the US have had to return to five day working after finding the day off made the company less competitive and staff more stressed. 

3) Is free good for you?
Technology companies based in Seattle or Silicon Valley now account for five out of the five most valuable companies in America.
Big Tech has, in some sense, gotten “too big.” And in 2019, politicians are starting to listen.
The issue is complicated by the fact that even though it’s convenient to shorthand Microsoft, Google, Amazon, Apple, and Facebook as “Big Tech,” these five companies are actually structured in very different ways.
Contemporary antitrust law mostly cares about high prices. The standard, in other words, isn’t that one company dominating a market is bad. It’s that it’s bad if a company’s market domination leads to bad outcomes for consumers.
However, most of the big tech is cheaper or provide better service to the end customer making them difficult to prosecute. Google provides nearly all of its services for free. Amazon makes shopping cheaper. Anti-trust needs to find out a balance between low prices and utility to the customers.

4) We are killing the planet and ourselves; we just don't realize it yet
Humans are transforming Earth’s natural landscapes so dramatically that as many as one million plant and animal species are now at risk of extinction, posing a dire threat to ecosystems that people all over the world depend on for their survival
Humans are producing more food than ever, but land degradation is already harming agricultural productivity on 23 percent of the planet’s land area.
Over the past 50 years, global biodiversity loss has primarily been driven by activities like the clearing of forests for farmland, the expansion of roads and cities, logging, hunting, overfishing, water pollution and the transport of invasive species around the globe.

5) The food we eat is killing us
Health officials around the world are struggling with the explosive rise of deadly drug-resistant strains of the fungus Candida auris, which prey on people with weakened immune systems. Worryingly, their emergence may be tied to indiscriminate use of fungicides in agriculture and food production.
Antibiotics are applied on a massive scale in food production, pushing the rise of bacterial drug resistance. A British government study published in 2016 estimated that, within 30 years, drug-resistant infections will be a bigger killer than cancer, with some 10 million people dying from infections every year.
“Food is no longer valued for its ability to sustain life,” Walker concludes, “but only for its ability to generate profits.” 

Monday, 6 May 2019

Investing is an active game

Cornelius Vanderbilt, known to his contemporaries as the Commodore, was once the richest man in the world. He started his life at the bottom and worked his way up. His business empire started with one passenger boat and he went on to own a large steamboat business. Later he diversified into the railroad business and owned the New York Central Railroad by 1867. He passed away in 1877, leaving more than $100 million, which was more than the money that was held by the US Treasury at that time). His last words to his family were, ''Keep the money together.''  Even today, there is the Grand Central Terminal, a Vanderbilt building still standing in New York City that carries the legacy of the great businessman.

Interestingly, within a period of 50 years, one of the direct descendants died bankrupt. The history of the Vanderbilt family is extremely instructive at many levels.

Other than the obvious reasons of prudence in managing costs and expenses and living within one's means, you also learn that no amount of wealth can be perpetuated forever if the custodians do not value money. When you know that no new money is going to come in then you need to value what you have much more. It does not matter how much money you have to start with. Unless you save more than what you earn, wealth will erode.

The most logical action to take for enduring wealth is to invest in businesses which earn high returns on capital and does not blow up doing so. Wealth creation and wealth preservation are not mutually exclusive. The best way to preserve wealth is to create it in the first place. Owning a business is the best and most efficient way of doing so.

As an investor, one useful way of thinking that I have used is to think of myself as a person with a small bag of money who is going around allocating that to different people in order to get a reasonable return. I visualize that I am getting into a partnership with the promoter of the company for some time and get a return from the business. If the business stops doing well after some time, I take my money back and then get into a partnership with another promoter. 

This line of thought forces me to think about the quality of the promoter whom I am partnering with, long-term dynamics of the business, the strategy the business is following and also ensure I am tracking the progress of the business. It also helps in preventing too many knee-jerk reactions to purely market-related events.

This means that even if I am invested in a very good company, I still need to continuously monitor it to ensure that it is doing exactly what it had promised and planned to do. If there are deviations, I need to understand why and what actions are being taken to course-correct. Investing is not a passive game. We have to be constantly vigilant and keep an eye out for what is happening.

P.S. If you want to read more about the Vanderbilt family, you can pick the fascinating book, "Fortune's Children: The Fall of the House of Vanderbilt" written by Arthur T. Vanderbilt.

Thursday, 2 May 2019

Weekend Reading - Some Interesting Stuff

Here are the top 5 articles I found interesting this week. 

1) A look at BYD, the world's largest electric vehicle manufacturer
Founded in Shenzhen in the mid-1990s as a manufacturer of batteries for brick-size cellphones and digital cameras, BYD now has about a quarter-million employees and sells as many as 30,000 pure EVs or plug-in hybrids in China every month, most of them anything but status symbols. Its cheapest model, the e1, starts at 60,000 yuan ($8,950) after subsidies.
Last year, BYD opened one of the world’s largest battery plants, a 10 million-square-foot facility in Qinghai province, and in February it broke ground on another of similar size.
China has adopted EVs at a stunning pace. Thanks to generous government subsidies and municipal regulations that make owning an internal combustion vehicle in many cities inconvenient, expensive, or both, China accounts for more than half the world’s purchases of electric cars. More EVs were sold in Shanghai last year than in Germany, France, or the U.K.; the city of Hangzhou, smallish by Chinese standards, had higher sales than all of Japan. Virtually all of Shenzhen’s 20,000 taxis are electric BYDs, compared with fewer than 20 of any make in New York. More than 500,000 electric buses ply Chinese roads, compared with fewer than 1,000 in the U.S.

2) Amazon is helping Indians take their products global
Indian sellers exporting their wares on Amazon’s global marketplace rose to more than 50,000 in 2018, and together sold goods worth over $1 billion. By 2023, Amazon expects this volume to rise to $5 billion. Launched with just a few hundred sellers in May 2015, more than 50,000 Indian exporters are now part of the Amazon Global Selling programme, offering more than 140 million made-in-India products to Amazon customers in the US, UK, Australia, China, south-east Asia and other overseas markets.

3) Can we use technology to break the vicious cycle of airconditioners and atmospheric heat 
Use of the energy-intensive air-conditioner causes emissions that contribute to higher global temperatures, which means we’re all using AC more, producing more emissions and more warming.
“If you cool something, you heat something, and that heat goes into the cities.” Their use exacerbates the heat island effect of cities—lots of concrete soaks up lots of heat, which a city releases well after the sun sets.
Using technology currently in development, AC units in skyscrapers and homes could get turned into machines that pull carbon dioxide out of the atmosphere.

4) Water crisis and climate change are becoming scary, but is anyone looking to solve these issues
More than 600 million Indians face “acute water shortages,” according to a report last summer by NITI Aayog. Seventy percent of the nation’s water supply is contaminated, causing an estimated 200,000 deaths a year. Some 21 cities could run out of groundwater as early as next year, including Bangalore and New Delhi, the report found. Forty percent of the population, or more than 500 million people, will have “no access to drinking water” by 2030. Climate change will surely make the problem worse.

5) How Satya Nadella has led the transformation of Microsoft to regain its formal glory
Under Satya Nadella, Microsoft has more subscribers than Netflix, more cloud computing revenue than Google, and a near-trillion-dollar market cap. Microsoft cut funding to Windows and built an enormous cloud computing business—with about $34 billion in revenue over the past year—putting it ahead of Google and making progress in key areas against the dominant player, Amazon Web Services.
Microsoft’s Office collection of productivity software, formerly a one-off purchase is now a cloud-based service boasting more than 214 million subscribers who pay around $99 a year; it has more subscribers than Spotify and Amazon Prime combined.

For those on the path of the cycle "Fani", please stay safe.

Friday, 26 April 2019

Weekend Reading - Some Interesting Stuff

Today, everybody talks about how much information is bombarding us. Imagine what it must have been like after the printing press when people who had been totally devoid of information had all of this information flooding them. The powers-that-be rebelled against that. Shortly after the printing press was developed, a Swiss scholar sat down and said, “I’m going to catalogue all of the books that have been printed thus far.” He ended up warning of the harmful magnitude of books and how it will create nothing but chaos. Well, that’s kind of like what we’re experiencing today on the internet, isn’t it?

How streaming content providers like Netflix and Amazon Prime Video is changing the game.
HBO is so successful because it never had to cater to advertisers. It only had to cater to its audience, who was paying them directly to not have ads. Amazon is more audience-focused than advertiser-focused.

As Apple and Amazon compete for a greater share of consumer dollars and attention, they also have a particularly intimate business relationship: Apple is spending more than $30 million a month on Amazon’s cloud. At these rates, AWS would be picking up more revenue from Apple than from several other companies, including Adobe, Capital One, Intuit, Lyft and Pinterest. People use more than 1 billion Apple devices each month, and accordingly, Apple has considerable computing and storage requirements. The company is investing heavily to build its own infrastructure: In January 2018, Apple announced plans to spend $10 billion on data centers in the U.S. within five years. In December, Apple said it would spend $4.5 billion of that amount through 2019.

An EV with a daily commuting distance of 30–40 km needs 6-8 kWh of energy, equivalent to the daily power needs of a small household. If 80% of India adopts EVs, the total power demand could touch 100 Terawatt-hour or about 5% of the total electricity demand of India by 2030.
This presents unique challenges for power utilities, which will need to increase production and resolve the issue of too many people charging at the same time from a single grid.
This additional burden can be managed only by deploying intelligent tariff and pricing solutions, with minimal network investment.
Another solution deployed by states like Maharashtra is a variable tariff structure called time of use (ToU). It means power tariffs will be cheaper at certain times of the day when the demand is usually low.
Integrating power generation from renewable sources with conventional grids in order to meet EVs’ demand is key. If India wants to see an effective reduction in pollution levels through EVs, the sector cannot be seen in isolation.\A vehicle running on electricity may be considered clean, but it is not really a zero-emission vehicle if the power source is coal. India generates a majority—about 65%—of its energy demand through coal.

When you speak, your brain sends signals to your lips, tongue, jaw, and larynx, which work together to produce the intended sounds. Now scientists in San Francisco say they’ve tapped these brain signals to create a device capable of spitting out complete phrases. The effort doesn’t pick up on abstract thought, but instead listens for nerves firing as they tell your vocal organs to move. Previously, researchers have used such motor signals from other parts of the brain to control robotic arms.

Thursday, 18 April 2019

Weekend Reading - Some Interesting Stuff

1) Now we have drones doing something good for the world. The startup, Biocarbon Engineering, makes and uses drones to plant trees and grasses at abandoned mines in Australia and on sites in other parts of the world.

The project began in 2012, after the government began opening the country’s borders to international business. More than six million trees have been planted so far, and the nonprofit plans to plant another four million by the end of 2019. But it also recognizes that humans can’t easily cover the amount of land that could potentially be restored.

2) By 2025, China’s leaders want annual sales of new-energy vehicles –- including pure-battery electrics, plug-in hybrids and fuel-cell cars -- to reach 7 million units. That’s the equivalent of about 20 percent of China’s total auto market.

There are now 486 EV manufacturers registered in China, more than triple the number from two years ago. While sales of passenger EVs are projected to reach a record 1.6 million units this year, that’s likely not enough to keep all those assembly lines humming, prompting warnings that the ballooning EV market could burst and leave behind only a few survivors.

A study made for Europe says India has the highest levels of small particulate-matter pollution (PM2.5) globally, according to the WHO, and is home to 16 of the 30 most-polluted cities in the world. A Lancet report from 2018 found that air pollution in India causes about 1.2 million early deaths a year. Reducing pollution will have profound impact on life-expectancy and lower healthcare costs. Yet, unfortunately, no political party talks about it in an election year.

4) A wonderfully detailed look at platform businesses.
Though they come in many varieties, platforms all have an ecosystem with the same basic structure, comprising four types of players. The owners of platforms control their intellectual property and governance. Providers serve as the platforms’ interface with users. Producers create their offerings, and consumers use those offerings.

To understand how the rise of platforms is transforming competition, we need to examine how platforms differ from the conventional “pipeline” businesses that have dominated industry for decades. Pipeline businesses create value by controlling a linear series of activities—the classic value-chain model. Inputs at one end of the chain (say, materials from suppliers) undergo a series of steps that transform them into an output that’s worth more: the finished product. 

Apple’s handset business is essentially a pipeline. But combine it with the App Store, the marketplace that connects app developers and iPhone owners, and you’ve got a platform.

5) If you want to understand where China is heading, the best guide may be private equity veteran Weijian Shan. His take on his country’s current economic predicament: Its slowdown has only just begun, but its long-term health looks sound.

The first of two immediate problems, he says, is a severe contraction in credit. “Two years ago, the government started cracking down on the ‘shadow banking’ network that provided most of the credit to the private sector,” he says, adding that private enterprise is dominated by small and medium-sized businesses (SMEs) in China. Beijing was worried that trust companies and other lenders in the “shadow” system were dangerously over-extended, and the motley group might crash, hobbling the economy.

The second deadweight is the trade dispute with the U.S. “The direct impact on business is small,” he says. “But the impact on business confidence is large. The dispute is hitting confidence among Chinese producers, and discouraging them from investing.”

Friday, 12 April 2019

Weekly Reading: Some Interesting Stuff

Nearly two-thirds of the residents of Okinawa are still functioning independently at age 97. That meant they were in their own homes, cooking their own meals and living their lives fully -- at nearly 100 years old!
If you ask anyone in Okinawa why they live so long, you will doubtlessly hear two words: ikigai and moai.
Ikigai, loosely translated, means sense of purpose in life. And in Okinawa, a person's ikigai often grows as they get older. It is their reason for living, that thing that propels them out of bed in the morning.
Moai is an informal social group of people who have common interests and look out for each other. Your moai is your "tribe" and another reason Okinawans believe they live so long.

Researchers at Yale and Oxford say exercise is more important to your mental health than your economic status. According to the study, three to five training sessions, each lasting between 30 to 60 minutes, are ideal per week.  The scientists also noticed that certain sports that involve socializing — such as team sports — can have more of a positive effect on your mental health than others.

Google’s Stadia project is motivated, to a greater or lesser degree, by the desire to maintain its predominance as the home of gaming video. As of right now, Google gets more than 200 million logged-in daily active users watching gaming content. That’s 200 million pairs of eyes to present ads to every day. In 2018, YouTube accumulated more than 50 billion watched hours of gaming content. “Gaming has always been the backbone of YouTube since the platform was first founded,” notes YouTube’s gaming director Ryan Wyatt.
The future of cloud gaming is approaching, and instead of trying to play nice with its leaders, Google is choosing to become a leader itself. Because the YouTube moneymaking beast must be fed.

The explosion of internet access has brought a wave of social change, but nothing as ubiquitous as the consumption of online videos. As many as 245 million Indians watch YouTube on their phones each month — in farms and factories, buses and trains, homes and hotel rooms.
India’s craze for videos is shaking the world of entertainment. Valued at more than $700m, the country’s online video market is shaping the content and pricing models of local and global companies.
For many young Indians, YouTube itself is synonymous with the internet. They use it to ask questions, make friends and learn skills. In towns where teachers don’t show up at schools and colleges, students are switching to YouTube channels that “cover” their syllabus. (Free sign-up for limited number of articles per month)

What's exciting about OTT video isn't the way it's delivered, but how it will change content itself. The most fascinating aspect of new distribution technologies in media is how they transform content, rather than just content delivery. Unfortunately, digital-era innovation to date has primarily focused on the latter: on-demand viewing, ad-free experiences, binge releases (or at least binge consumption), recommendation-based discovery, auto-play next and skip credits, etc.

Friday, 5 April 2019

Weekend Reading: Some Interesting Stuff

A possible ground-breaking discovery in energy storage. An Australian startup says it's built the world's first working thermal battery, a device with a lifetime of at least 20 years that can store six times more energy than lithium-ion batteries per volume, for 60-80 percent of the price.

How IKEA is changing its business model from selling furniture to renting it out. Thus its moving to the subscription economy.

India has announced that it will eliminate all single-use plastic in the country by 2022. The pledge is the most ambitious yet of the global actions to combat plastic pollution that are taking place in 60 nations around the world.

I am always looking for stories on business failures. Here is a recent one.
WOW Air launched in 2011 as a discount regional carrier that offered cheap, no-frills fares designed to undercut legacy players. Along the way, it decided to compete with the bigger airlines, specifically Icelandair, by offering transatlantic flights. That decision required WOW to upgrade its fleet with larger jets capable of making longer trips.
Because of all the variables involved – many of which companies like WOW cannot control – airlines are inherently risky ventures. “In the case of WOW, it’s likely a combination of multiple factors that created difficulties,” Tsoukalas noted. The company’s aggressive expansion “required a large capital investment and not only complicated its operations, but also made it more difficult to fill the extra seats. At the same time, the company had to deal with upward trending fuel prices … and likely increasing wages as its staff started become more senior. In a sense, over time, some low-cost carriers start resembling legacy carriers more and more.”

Amazon is planning to build a network of more than 3,000 satellites federal filings reveal, in an ambitious attempt to provide global internet access.
Project Kuiper is a new initiative to launch a constellation of low Earth orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world.

Friday, 29 March 2019

Weekend Reading: Some Interesting Stuff

Interesting fact - In China, under pressure from the government, video game publisher Tencent limited playing time for its most popular game, Honour of Kings, to two hours per day for players under 18 and one hour per day for players under 12.

In Beijing, it’s often cheaper to have food delivered than to get it yourself. Ordering from a local restaurant’s roast duck dish for 20 yuan ($2.99), is about 80 percent less than it costs at the restaurent, via delivery app Meituan.
Alibaba and its various subsidiaries dominate the country’s online retail market for physical goods, but Meituan is leading the way in services. Its app has 600,000 delivery people serving 400 million customers a year in 2,800 cities.
Alibaba is betting it can undercut Meituan to death. Both companies are spending billions in an escalating war of subsidies that is helping people get a "free-lunch"!!

A simple personal finance article that reiterates the ageless rules. Some of the rules are 1) Save atleast 10% of your income, 2) Control expenses, 3) Invest your savings (don't just stash it away in a bank savings account), 4) Understand your risks to your investments, 5) Build assets and equity with your money, 6) Insure yourself, 7) Increase your ability to earn.

A detailed account of the Chinese chemical industry.
The new environmental regulations are having only limited impact on the big upstream petrochemical and chemical intermediates and polymer plants, most of which are built with appropriate emissions controls and waste-treatment facilities. The severe impact is on the thousands of smaller plants that make all the specialty chemicals, from coatings and dyestuffs and pesticides to food ingredients and surfactants, used by Chinese manufacturing and agriculture and by Chinese consumers. These are typically privately owned operations often lacking appropriate waste-management capabilities and located in urban areas. The moves to shut down out-of-compliance plants have affected large numbers of these small operations, but the impact on overall chemical output has been less severe. In Shandong province, for example, the government closed 25 percent of all the chemical companies operating in the province during 2018, but this affected only 5 percent of output.
Looking ahead over the next three to five years, we expect China’s environmental authorities to continue to push enforcement energetically in the designated “radical change” regions, which account for nearly 50 percent of China’s chemical production, as well as push for improvements in the “moderately strengthened” enforcement regions.

Netflix is finally offering Indians the one thing they care most about: cheap subscription plans. On March 26, the video streaming platform launched the test run of a mobile-only plan for Rs250 ($4) a monthhalf the price of its basic plan.
Competition in India’s OTT sector, which is slated to surpass $5 billion by 2023, will become even stiffer. In addition to rivals Amazon Prime Video and Hotstar, new behemoth entrants like Disney and Apple could also come fighting for a piece of the India streaming pie.
The dynamics could change drastically if, say, Disney pulls all its content off Netflix.