Equity Advisory

Are you looking for an honest, transparent and independent equity research and advisory? www.intelsense.in is run by Abhishek Basumallick for retail investors. Subscribe for long term wealth creation.

Saturday, 10 October 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.

If you like this collection, consider forwarding it to someone who you think will appreciate.

The reading habits of Marc Andreesen
On how does he manages to read so much, Mr. Andreesen says, “I’ve really read all the time since I was a little kid, it’s been a lifelong thing. It’s basically trying to try to fill in all the puzzle pieces for the big discrepancies. A great term is “sense-making”. Essentially, what the hell is happening and why? The world’s an incredibly complex and erratic place and trying to figure that out is kind of a lifetime occupation. The thing I’ve tried to do the last few years is really “barbell” the inputs. I basically read things that are either up to this minute or things that are timeless”. He also says how he struggles with finishing every book that he picks up. “I have a whole bunch of books that I haven’t finished which I really should just toss,” he says.
On how and what he does on improving himself, he says, “What you’re always struggling with is to understand what’s actually happening. Like, what’s actually happening on the ground. An obvious example is if you ask an entrepreneur how the company is, they’re always going to say “great”. And that’s probably not right. You’re probably dealing with a hurricane because that’s generally the job. So, what’s actually happening inside a company? What are customers actually buying? What’s actually being adopted? What’s actually happening with the technology? What’s happening with the competition?”

The oil economy of Venezuela is in shambles
For the first time in a century, there are no rigs searching for oil in Venezuela.
Wells that once tapped the world’s largest crude reserves are abandoned or left to flare toxic gases that cast an orange glow over depressed oil towns.
Refineries that once processed oil for export are rusting hulks, leaking crude that blackens shorelines and coats the water in an oily sheen.
Venezuela’s colossal oil sector, which shaped the country and the international energy market for a century, has come to a near halt, with production reduced to a trickle by years of gross mismanagement and American sanctions. The collapse is leaving behind a destroyed economy and a devastated environment, and, many analysts say, bringing to an end the era of Venezuela as an energy powerhouse.

Real life and fantasy world are merging together on social media
Social media has made conspiracy theorizing so addictive and immersive that the line between story and reality can become incredibly blurry.
Science (which, you could argue, is also a form of fact checking) has been around for centuries trying to debunk most religious beliefs – and yet religion still plays a major role in Western society. If entire education systems teaching millions of people about science haven’t worked, why do you think adding a small fact check disclaimer below a YouTube video would?
Silicon Valley is not just creating new fantasy worlds, it is building tools that allow others to create their own fantasy worlds. Enter social media.
If TV has taught us to think of ourselves as characters in the story of our lives, then social media has allowed us to actually write and edit the script and build fictional characters. Social media is essentially the democratization of virtual world building.
Twitter, Snapchat and Facebook are just massive virtual status arenas that allow us to build social capital through signaling. Some of that social capital might be built on top of real stories and actual achievements, but most of it is not based on reality. Every time you are applying an Instagram filter, you are already changing reality.

Shinzo Abe’s elusive Japanese Dream
Abe did not start out as an economic reformer. His aim was to restore Japanese people’s pride, sorely battered by the country’s defeat in World War Two and the subsequent U.S. occupation. He wanted Japan to have the sort of global respect it enjoyed after the Meiji Restoration that restored imperial rule in the late 19th century, when the country industrialised, its military defeated Russian forces, and its woodcuts inspired French Impressionists. For Abe that goal meant less dwelling on past war crimes. It also meant legal revisions to allow Japanese troops to come to the aid of allies and support international peacekeeping operations.
Abe’s renaissance required a stronger state centred on a powerful prime minister who could drive painful economic and political changes to enable the attitude shift he wanted. He continued his predecessor Junichiro Koizumi’s push to end the system by which the Liberal Democratic Party – in power more or less since 1955 – diverted resources and investment to inefficient companies and regions in exchange for electoral support. He also increased the government’s influence over the Bank of Japan, which was reluctant to aggressively reflate prices. And he pushed through contentious reforms to corporate governance and labour markets.


Common causes of bad decisions
Incentives can tempt good people to push the boundaries farther than they’d ever imagine. 
Tribal instincts reduce the ability to challenge bad ideas because no one wants to get kicked out of the tribe. 
Ignoring or underestimating the full range of potential consequences, especially tail events that seem rare but have catastrophic effects. 
Lots of little errors compound into something huge. 
Underestimating the need for room for error, not just financially but mentally.
Being influenced by the actions of people who are playing a different game than you are. 
Wrongly assuming that the information you have at your disposal tells a complete picture of what you’re dealing with. 


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.

No comments:

Post a comment