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.
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