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Friday 10 July 2020

Weekend Reading

Reading across disciplines is one of the best ways to improve our investment acumen. Here is a summary of some of the best articles I read this week. 

I especially try to not post Corona related articles as that is all one gets to read in all traditional media.

The great investors who no one knows about

Two secretive brothers from New Zealand have perhaps THE best long-term track record in the investing world. Starting in 1986, the two turned $10 million of family money into over $5 billion just 20-years later. That’s an astounding 36% CAGR. The two brothers have gone to great lengths over the years to maintain a low profile and keep their faces out of the news. They were amongst the first investors to plunge into emerging markets like Russia, Brazil, and the Czech Republic. They are the Chandler brothers: Richard and Christopher. They ran the Sovereign Global Fund for 20-years (the two have since split off to manage their own money with Legatum and Clermont Capital).



The unknown Pharma billionaire investor

If discovering blockbuster drugs is the pinnacle of pharmaceutical industry success, then the next best thing is getting rich by earning pennies from every pill sold. For 24 years, that is exactly what a little known Wall Street investor named Pablo Legorreta has been doing. Few have heard of him, but millions have benefited from the top selling drugs his company Royalty Pharma draws income from. Names like Humira for sufferers of Crohn’s disease, Lyrica, the most successful anti-epileptic remedy and blood cancer treatment Imbruvica. The giant companies behind these drugs, names like Pfizer, Johnson & Johnson and AbbVie, do all the heavy lifting— producing and marketing the drugs while Legorreta sits back and collects his mailbox money.



How to reduce imports from China?

The larger structural question is whether we can permanently reduce the share of Chinese imports. This must be seen in context. India typically incurs a current account deficit, which means that we typically import more goods and services then we export. There are two reasons for this. We export when the price and quality of what we sell is attractive to foreigners. We import because the same is attractive to us. This, in essence, is the theory of comparative advantage and a current account deficit simply means that our overall comparative advantage is lower than that of our trading partners. However, as an economy evolves, there is another reason why this may happen, which is that our pattern of consumption becomes more import-intensive.



A gift of love from father to daughter made her a multimillionaire

When Hiroe Tanaka’s father died, he left behind something that would change her life: a recipe for fried meat on a stick. It was an act of love. His daughter adored the Japanese street food known as kushikatsu, and he’d spent endless hours working out how to make it just right.

The handwritten memo, which detailed how to cook the seemingly simple dish, helped save a restaurant business from bankruptcy in 2008, elevated Tanaka from part-time employee to vice president of a company named after her, and made her a multimillionaire. The university dropout who once worked as an office lady now sets strategy for the $82 million Kushikatsu Tanaka Co.



A therapy for permanently reducing LDL & Triglycerides

A novel gene-editing experiment seems to have permanently reduced LDL and triglyceride levels in monkeys. In the first gene-editing experiment of its kind, scientists have disabled two genes in monkeys that raise the risk for heart disease. Humans carry the genes as well, and the experiment has raised hopes that a leading killer may one day be tamed. But it will be years before human trials can begin, and gene-editing technology so far has a mixed tracked record. It is much too early to know whether the strategy will be safe and effective in humans; even the monkeys must be monitored for side effects or other treatment failures for some time to come.


Disclaimer: Abhishek Basumallick is the Head of the equity advisory www.intelsense.in for long term wealth creation and a pure quant focused newsletter at www.quantamental.in. The blog posts should not be construed as investment advice. Please do your own due diligence before investing.

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