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Thursday 29 April 2021

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

1. In defence of thinking
We’ve lost our familiarity with the concept of “thinking” as a concrete and isolatable activity; something that can be prioritized, and trained, and even cherished as a valuable pursuit in its own right. Today, we’re not nearly as comfortable with this most fundamental of activities. We talk a lot more about information — how we can get more of it, how we can spread it faster — than we do its processing. 

We cannot make sense of ourselves or the world around us without putting in the mental cycles necessary to wrestle this frenetic information into useful forms. Thinking — true, hard, energizing thinking — is not yet another healthy activity to add to a long list of such commitments. It’s better understood as a way of life; one that’s become even more radical in an increasingly shallow world.

2. How envy works
Envy is one of the great struggles plaguing humanity today, and it’s only getting worse. The conditions that allow envy to thrive are being accentuated by technological progress, yet our norms have not updated to accommodate this reality.

You will be envious of those that have reached your desired state, but are not too far removed from it. Those that are too far out will be sources of inspiration, not envy. Envy thrives in the distance between you and someone you once knew. 

The rival seems very relatable to you. You have similar interests, similar outlooks, but the outcomes appear to be wildly different.

3. The post-truth world
The term fake news became widely used during the 2016 US presidential election, when the internet was flooded with inaccurate information. 

Researchers usually talk about disinformation, which is purposefully false, and misinformation, which is unwittingly false (either because the publisher made a mistake or because the person sharing the content did). As false content spreads through social media networks, it can oscillate between the two, and it can manifest in various forms, including memes, tweets, or “imposter” content made to imitate real news stories. 

In 2016, Oxford Languages chose post-truth as its word of the year. The essential characteristic of our age, the accompanying press release stated, was the loss of a distinction between truth and feeling; we were entering an era in which “objective facts are less influential in shaping public opinion than appeals to emotion and personal belief.”

The beginning to a possible solution is to realize that, although the world is politically divided in many ways, the main division is not between rational, intelligent people and irrational, emotional ones. Fact, opinion, and emotion often go hand in hand—in politics, journalism, and any kind of social interaction.

4. The long-term shareholders Buffett cultivated are a huge part of Berkshire Hathaway’s success
An elite corps of about 40 companies are in Berkshire’s league in terms of attracting quality shareholders among stock-picking institutional investors. But Berkshire has the greatest proportion of individual owners, representing an estimated 40% of the Berkshire shares that Buffett doesn’t own.

Having a high density of quality shareholders has contributed to Berkshire’s success over the decades, as it has to the performance of dozens of other major companies.  They support management’s long-term view and contribute to the distinctive reputations, cultures, and moats that characterize great companies. Such a long-term culture trickles throughout the company in everything from acquisitions to operations. 

Since a company’s shareholders influence a company, managers should care about the shape of their shareholder base.  One dominated by short-term investors will induce managers to focus on quarterly targets rather than multi-year performance. One controlled by indexers will tend toward formulaic governance practices even if they do not fit a particular company.

Buffett explained in 1983 how he would achieve his goal: “If we consistently communicate our business and ownership philosophy — along with no other conflicting messages — and then let self-selection follow its course.” Buffett courted quality shareholders by providing an informal education, mainly through an acclaimed annual letter and legendary annual meeting.

5. Negativity is a character trait
You ever notice it’s the same people who spent eight years moping about deflation and disinflation who are now shrieking about inflation?

You ever notice it’s the same people who complained about being “pushed out on the risk curve” due to low interest rates on bonds who are now upset about higher interest rates on bonds?

You ever notice it’s the same noisemakers who’ve been seeing recessions over every horizon for a decade who are now complaining about too much economic growth?

You ever notice it’s the same folks who lamented the lack of growth who are now crying about how the acceleration of growth is unsustainable?

It’s the same people. They have no overarching point. There’s no comprehensive philosophy for how things should be. It’s just bitching and moaning, regardless of past, present or future circumstances. Everything’s wrong, everyone else is making all the wrong choices, with suspect motives, to keep me down and hurt my feelings. 

For building a solid long term portfolio, look at subscribing to www.intelsense.in long term advisory.
For technofunda investing and positional trading, subscribe to our Hitpicks advisory service on www.intelsense.in
For momentum trend following systematic trading, subscribe to Quantamental at www.quantamental.in 
Our Quant systems are also found at https://intelsense.smallcase.com

Friday 23 April 2021

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

1. Trying hard not to be stupid
It is not enough to think about difficult problems one way. You need to think about them forwards and backward. Inversion often forces you to uncover hidden beliefs about the problem you are trying to solve. “Indeed,” says Munger, “many problems can’t be solved forward.”

Inverting the problem won’t always solve it, but it will help you avoid trouble. You can think of it as the avoiding stupidity filter. It’s not sexy but it’s a very easy way to improve.

Inversion helps improve understanding of the problem. By forcing you to do the work necessary to have an opinion you’re forced to consider different perspectives.

If you’re to take anything away from inversion let it be this: Spend less time trying to be brilliant and more time trying to avoid obvious stupidity.

2. The North Korean cyber criminals
Foreigners find it profoundly difficult to understand what is happening inside North Korea, but it is even harder for ordinary North Korean citizens to learn about the outside world. A tiny fraction of one per cent of North Koreans has access to the Internet. Yet, paradoxically, the North Korean government has produced some of the world’s most proficient hackers.

North Korea, moreover, is the only nation in the world whose government is known to conduct nakedly criminal hacking for monetary gain. Units of its military intelligence division, the Reconnaissance General Bureau, are trained specifically for this purpose. In 2013, Kim Jong Un described the men who worked in the “brave R.G.B.” as his “warriors . . . for the construction of a strong and prosperous nation.”

North Korea’s cybercrime program is hydra-headed, with tactics ranging from bank heists to the deployment of ransomware and the theft of cryptocurrency from online exchanges. It is difficult to quantify how successful Pyongyang’s hackers have been. Unlike terrorist groups, North Korea’s cybercriminals do not claim responsibility when they strike, and the government issues reflexive denials. Nevertheless, in 2019, a United Nations panel of experts on sanctions against North Korea issued a report estimating that the country had raised two billion dollars through cybercrime. Since the report was written, there has been bountiful evidence to indicate that the pace and the ingenuity of North Korea’s online threat have accelerated.

3. Active vs Passive reading
Passive readers forget things almost as quickly as they read them. Active readers, on the other hand, retain the bulk of what they read. Another difference between these two types of readers is how the quantity of reading affects them differently. Passive readers who read a lot are not much further ahead than passive readers who read a little.

The more that active readers read, the better they get. They develop a latticework of mental models to hang ideas on, further increasing retention. Active readers learn to differentiate good arguments and structures from bad ones. Active readers make better decisions because they know how to get the world to do the bulk of the work for them. Active readers avoid problems. Active readers have another advantage: The more they read the faster they read.

4. Is fund management a business or a practice?
"The distinction between an investment practice and investment business. A business gives to the customer what they want. The manager creates a product to fill a need. A practice, like a medical or law practice, is there to give a client what they need." - Anthony Deden.

The business solves the customer’s problem and maximizes wealth creation for the owner. The practice serves the customer in a way that reflects the uniqueness of the practitioner, their process and personality. The business’s natural drive is to grow and generate cash. For the practice, it is to allow the owners to practice their craft in service of the client.

5. It is going to get dumber
I also worry 2020 and 2021 may have broken the brains of a large number of young investors. Once you associate degenerate gambling with actual investing in the markets it’s going to be difficult to turn that part of your brain off to invest in a reasonable manner.

You could make the case this is the dot-com bubble all over again. And there are some similarities.

But I think the main driver here is something completely different. The internet has changed the game forever and we’re finally seeing a generation of people who grew up online come into the markets. I don’t think the internet has fundamentally changed human nature but it sure does amplify it.

Everything is now gamified. Money doesn’t seem real when transactions occur with the push of a button on your phone. Memes are now a form of currency in 2021. What you invest in has always been about status in many ways but now people are trying to prove a point with their trades. Crypto wealth was essentially created from out of thin air (and coding).

My biggest worry is the number of young people who are witnessing meme stock gains and joke crypto currencies going to the moon are going to develop bad habits and attitudes about the markets that will be impossible to fix.

I also don’t think we’ve seen the end of this. It’s probably only going to get dumber.

For building a solid long term portfolio, look at subscribing to www.intelsense.in long term advisory.
For technofunda investing and positional trading, subscribe to our Hitpicks advisory service on www.intelsense.in
For momentum trend following systematic trading, subscribe to Quantamental at www.quantamental.in
Our Quant systems are also found at https://intelsense.smallcase.com

Sunday 18 April 2021

The Perils of the 2020 Rally

We all will remember 2020 as the year of the Covid pandemic. When the first realisation hit our markets, lockdowns became a reality, markets fell off the cliff. The economies across the globe have remained weak. Every country has tried, based on its capability, to pump in liquidity and prop up their individual economies. In the last year, the US Fed has nearly doubled its balance sheet to more than $7.7 trillion through around $3.4 trillion in bond purchases. That extraordinary intervention, along with near-zero interest rates, has a single point agenda - to keep money flowing through the US banking system. As per data from IMF, countries have given stimulus between 2.5% to 10% of GDP.

This has resulted in an across the board asset price bubble. Nearly every asset class has been on the rise for the last year. Bitcoin, equity markets, oil, metals - you name it and they are up. The main reason is that there is a lot more money in the hands of people and it is flowing into various asset classes.

The second thing that has happened, at least in India, is a very large migration of mutual fund investors to direct equity. 10.8 million new demat accounts were opened by investors in India post-April 2020. Retail holding in NSE listed stocks is currently around 7%, which is an all-time high. Since July 2020, mutual funds have seen an outflow of 45,000 crs.

I believe that the market condition when a person starts his investing journey has a very large impact on the kind of investor he ends up becoming. For example, most people who started in the 2000-2007 period, ended up becoming growth-oriented buy-on-dips investors (I would put myself in this camp). People who started post-2008 to about 2013-14 were value investors. It is because those factors worked well in the period when they took their first steps.

What I fear is that the influx of a large number of new investors in the markets coinciding with a huge market rally despite weak economic conditions, sends the wrong message to this set of new investors. They may come away with the realisation that markets never go down and central banks can and will always support the market so there is nothing to worry about. And sometime in the future, this is likely to come back to haunt them.

This article first appeared on https://www.cnbctv18.com/views/the-perils-of-the-2020-rally-8953391.htm

Friday 16 April 2021

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

1. Antiscience is rising and needs to be curbed
Antiscience has emerged as a dominant and highly lethal force, and one that threatens global security, as much as do terrorism and nuclear proliferation. Antiscience is the rejection of mainstream scientific views and methods or their replacement with unproven or deliberately misleading theories, often for nefarious and political gains. It targets prominent scientists and attempts to discredit them.

Public refusal of COVID-19 vaccines now extends to India, Brazil, South Africa and many low- and middle-income countries. Thousands of deaths have so far resulted from antiscience, and this may only be the beginning as we are now seeing the impact on vaccine refusal across the U.S., Europe and the low- and middle-income countries of Africa, Asia and Latin America. Containing antiscience will require work and an interdisciplinary approach. The stakes are high given the high death toll that is already accelerating from the one-two punch of SARS CoV2 and antiscience. Antiscience is now a large and formidable security issue.

2. The Rise and Fall of the Missed Call
The missed call emerged in India as a critical means of communication for those who counted every rupee spent on recharge credit. But the practice soon spread, became trendy, and, even as call rates plunged in the 2000s to among the lowest in the world, evolved into a general tool of convenience: a missed call could mean “I miss you,” “Call me back,” or “I’m here.” The fact that the missed call demanded only basic numeric literacy made them accessible to the third of India’s population that was illiterate. In 2008, one study estimated that more than half of Indian phone users were in the habit of calling people with the expectation that they wouldn’t pick up.

The internet revolution has brought about vast benefits for India: digital connectivity defines nearly every aspect of Indian life, a trend that has only accelerated during the pandemic.

3. Irrigation has been stopped in Taiwan to make semiconductors (apparently mankind can live without food but not without their cell phones!!)
Chip makers use lots of water to clean their factories and wafers, the thin slices of silicon that form the basis of the chips. And with worldwide semiconductor supplies already strained by surging demand for electronics, the added uncertainty about Taiwan’s water supply is not likely to ease concerns about the tech world’s reliance on the island and on one chip maker in particular: TSMC.

More than 90% of the world’s manufacturing capacity for the most advanced chips is in Taiwan and run by TSMC, which makes chips for Apple, Intel and other big names.

In recent months, the government has flown planes and burned chemicals to seed the clouds above reservoirs. It has built a seawater desalination plant in Hsinchu, home to TSMC’s headquarters, and a pipeline connecting the city with the rainier north. It has ordered industries to cut use. In some places it has reduced water pressure and begun shutting off supplies for two days each week. Some companies, including TSMC, have hauled in truckloads of water from other areas.

But the most sweeping measure has been the halt on irrigation, which affects 183,000 acres of farmland, around a fifth of Taiwan’s irrigated land.

4. We are breathing in microplastics
Take a deep breath. While you might feel clean air passing through your nose, tiny bits of plastic from packaging and soda bottles that we throw away all too often might be hitchhiking to the depth of our own lungs.

A recent study examined the sources of atmospheric microplastics that are increasing at an alarming rate of around 4% per year. The study discovered that India, Europe, Eastern Asia, the Middle East, and the United States are among the hotspots for terrestrial microplastic sources and accumulation.

Moreover, closer to home, these plastic fragments have become so pervasive that they are embedded in our fields, water supply, and even in the air that we breathe. From the human bloodstream to the guts of small insects in Antarctica, they are leaving a trail in every corner available.

While there is a consensus that inhalation of plastic particles can be irritating for internal tissues of organisms, further research needs to be conducted in order to understand whether plastic is more toxic in comparison to other aerosols.

5. Jamsetjee Jejeebhoy - one of India's first crorepatis (in the 1820s!)
Opium wasn’t just another trade good for the British Empire. It was the necessary corollary to another commodity: tea. The British were importing tens of millions of pounds of tea from China every year. There seemed to be no end to the demand and everyone involved was making huge profits. There was just one problem. They didn’t have the cold hard cash or rather, cold hard silver to pay for it.

With all of the Empire’s physical currency disappearing into China, the British were running a huge trade deficit. They needed something that the Chinese wanted as much as they wanted tea. Opium was the answer. And it was essential to keeping the Empire’s entire economy afloat.

By the time he was 40, Jamsetjee Jejeebhoy had allegedly made more than ₹2 crore — in the 1820s. He was already one of the richest men in the entire country, but he had his eye on even greater prizes.

For building a solid long term portfolio, look at subscribing to www.intelsense.in long term advisory.
For technofunda investing and positional trading, subscribe to our Hitpicks advisory service on www.intelsense.in
For momentum trend following systematic trading, subscribe to Quantamental at www.quantamental.in 
Our Quant systems are also found at https://intelsense.smallcase.com

Wednesday 14 April 2021

Launching Quantamental Q10

As promised during the annual review, I am launching the Q10 Quant strategy.

The details are available in the deck 

To summarise:
  • Q10 now offers a lower minimum investment requirement at a lower subscription fee.
  • Q10 invests mostly in large and mid-caps with somewhat lower returns and somewhat lower drawdowns compared to Q30 over a market cycle. It is also likely to be more volatile.
  • As of now Q10 is going to be offered only on the smallcase platform for new subscribers and may be added to Intelsense direct option in future.
  • https://intelsense.smallcase.com/smallcase/INSMO_0004
  • It is available for free for all existing Q30 subscribers who have subscribed directly on intelsense.in.

Quantamental Q10 - Introduction by abhishekbasumallick on Scribd

Monday 12 April 2021

Using Technofunda Strategy for Investing

Technofunda investing is a combination of technical analysis and fundamental analysis. Practitioners of technofunda investing usually approach it in one of the two ways - i) look for strong fundamental stocks and then look for good technical patterns or ii) look for chart patterns and then study the fundamentals of the stock.

Nearly all fundamental investors are averse to using technical analysis and vice versa. Personally, I treat both forms of analysis as information streams. And the more the merrier. If I can use the fundamental information about a company's business and combine that with what is happening in the demand-supply of the stock, then the results are superior to using either one approach exclusively.

So, why don't more people do that? Firstly, the time frame is different. Fundamentalists usually are looking at a longer time horizon of a year or more whereas technicians typically look at holding for a few days or weeks. Very few technicians have a longer time horizon. Resolving this time horizon mismatch is something that has to be done first.

Secondly, there is a lack of knowledge and trust in the "other" discipline. Fundamentalists view charts as squiggly lines. And technicians view fundamentals as superfluous newsflow. It is at the core of their respective studies. The way I resolve it for myself is by telling myself that fundamentals cause the stock to perform over time and technicals cause the demand and supply conditions for the stock price movement. Both of these factors need to align for a long sustained rally in a stock. 

I add a layer on top of technofunda which helps with holding performing stocks for longer periods. This approach is known as trend following. Trend following is usually associated with following the price. Although I use that to an extent, I tend to focus more on the fundamental trend following. This is a simple concept of continuing to hold stocks where the results are continuously good and are in an uptrend. Some of the biggest winners in the stock market come from these stocks. In fact, nearly all of the long term well-performing stocks fall in this category. I call them compounders. Because they tend to compound capital superbly well. If you make a basket of stocks filled with such stocks, the only active decision to make is when to sell. You do that when the fundamental or technical trend breaks down.

This has been one of the best ways I have found to get good returns while being invested in good quality companies.

Sunday 11 April 2021

Quantamental Q30 Hits a Century

Q30 Quant Model Portfolio crossed a major milestone earlier this week. It crossed 100% returns on the starting capital as at 1st March 20. The total absolute returns as on date is now 105% since inception on 1st March 20. Please note

  • These are model portfolio returns on starting capital of 100 as on 1st March 20, with no capital added thereafter.
  • For standard comparison with other portfolios, it does not include brokerage, slippages or dividends received from stocks or liquid bees.
  • The returns in your portfolio is a function of when you started, when you added or withdrew capital, whether you have been exactly cloning the model portfolio and a minor impact on account of brokerages/slippages which is also partly offset by dividends. 
  • The drawdowns throughput this entire period has been under 8%. Which is simply incredible and a reflection of the year it has been. As we move forward, across market cycles we would obviously see much higher drawdowns. The trick is to stick with the process across market cycles and not try and outsmart it. Anyway we can always take such calls in discretionary investing. When it comes to quant, follow the system. The system is the edge!

For further details and subscribing to Q30, visit https://www.intelsense.in or http://intelsense.smallcase.com

Thursday 8 April 2021

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

A fascinating account of the first Big Bull of India
Premchand Roychand was one of the most influential businessmen in 19th-century Bombay. A man who made a fortune in the stockbroking business and came to be known as the Cotton King, the Bullion King or just the Big Bull. He was also the founder of the Native Share and Stock Brokers Association, an institution that is now known as the BSE. 
Premchand began his “successful career as a broker under the shade of a stately, spreading banyan tree at the western end of the beautiful Horniman Circle garden in South Bombay where wayfarers, cotton and opium brokers, clerks and strangers came to quench their thirst". Around 22 such brokers began trading under the banyan tree and formed the Native Share and Stock Brokers Association, each contributing Re1.
“Of all the ‘Share Kings’, the most fabled figure was Premchand… whose exploits would help create another stereotype: he would be the first of many famous Bombayites who believed that profit held primacy over principle. The ingenious merchant was a promoter and shareholder in the Commercial Bank and Mercantile Bank, and associated with about seventy mushroom companies. He also took control of the Bank of Bombay. He had a sharp eye for the loophole and regulatory grey area."

Great thinkers aren't afraid to be wrong
High-ability individuals tend to underrate their relative competence, and at the same time assume that tasks that are easy for them are just as easy for other people. The smarter you are, the less you think you know -- because you realize just how much there is to actually know.
Because wisdom isn't found in certainty. Wisdom is knowing that while you might know a lot, there's also a lot you don't know.
Wisdom is trying to find out what is right rather than trying to be right.
Wisdom is realizing when you're wrong, and backing down graciously.
Great thinkers aren't afraid to be wrong. Great thinkers aren't afraid to admit they don't have all the answers. Great thinkers aren't afraid to say "I think" instead of "I know."

Doctors move to a subscription model
Helping someone become healthier doesn’t always require a billable treatment. Sometimes, it just requires expert planning and recommendations.
That’s why doctors increasingly want to practice a different kind of care, known as value-based care. The idea of value-based care is that patients or payers pay doctors to make patients healthy rather than treating them for individual ailments. This often means charging a monthly or annual flat fee in exchange for comprehensive care. Essentially, doctors use those dollars to care for a patient however they see fit. In some models of VBC, doctors can suffer penalties when patients don’t get better. 

Will the future car come from an auto or an electronics manufacturer?
The stakes in manufacturing vehicles are higher than what technology companies are accustomed to. “The automobile is very different from a lot of electronics gear,” said MacDuffie.  “It’s a heavy, fast-moving object that operates in public space and is dangerous. It can kill people. It can injure people. It can damage property.”
In that setting, the automotive industry clearly faces complexities and responsibilities with which technology companies are not familiar. 
“We’ve heard Elon Musk talking many times about ‘manufacturing hell’ and saying there’s nothing harder than mass-producing at scale.” In a recent interview with auto manufacturing expert Sandy Munro, Musk said: “Prototypes are easy and fun, and then reaching volume production with a reliable product at an affordable price is excruciatingly difficult. Our production is hell.”
Even as some tech companies have ambitions of becoming automakers, not all of them are prepared to put in “all the hard work” that Tesla has invested in that endeavor, MacDuffie said. If the tech firms don’t take similar steps, they will be forced to work with existing automakers that bring that expertise.

Things to remember in a crazy market
FOMO brings about a lot of emotions — greed, envy, regret — that make it difficult to make level-headed decisions with your money.
You wouldn’t be human if you didn’t have these feelings right now.
Investing in risk assets means occasionally seeing your gains evaporate before your eyes. I don’t know why and I don’t know when but at some point a large portion of my portfolio will fall in value. That’s how this works. 
The current cycle won’t last forever just like the last one or the next one.
Being contrarian will always make you feel like you’re smarter than everyone else, but the crowd is right more often than it’s wrong when it comes to the markets.
No one is able to consistently get in at the bottoms and out at the tops. Hindsight makes it look easy but it never is in the moment. 

For building a solid long term portfolio, look at subscribing to www.intelsense.in long term advisory.
For technofunda investing and positional trading, subscribe to our Hitpicks advisory service on www.intelsense.in
For momentum trend following systematic trading, subscribe to Quantamental at www.quantamental.in 

Tuesday 6 April 2021

Thursday 1 April 2021

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

1. The new kid on the audio block - Clubhouse
Clubhouse, as you have no doubt heard, is an invitation-only audio social network that has drawn millions of people eager to socialize and listen in on an endless stream of conversations, as if all the text on Twitter, Facebook, and Interview magazine had acquired vocal cords. 

Thought leaders, politicians, and A-list celebrities have headlined countless Clubhouse rooms. More prosaic sessions include scammy get-rich-quick pitches and endless hand-wringing about current events. Some of the discussions have become notorious, with charges of racism, anti-Semitism, misogyny, and disinformation. All of which has generated yet more curiosity about the app.

Clubhouse arrived at a perfect moment. It delivered spontaneous conversations and chance meetings to people stuck at home. For those weary of tidying and curating backgrounds for Zoom, its audio-only format is a virtue. Even being iPhone-only and invitation-only hasn’t held back its popularity. New users often become obsessed with it, spending 20, 30, even 40 hours a week on the app. Discussions are popping up in German, Greek, and Burmese. In early February, the app even earned the badge of respect accorded to free speech-ish platforms such as Google, Facebook, and Twitter: It’s been banned in China.

2. China tries to boycott US brands
Western brands are suddenly feeling the wrath of the Chinese consumer, the very shoppers who for years have clamoured for their products and paid them vast amounts of money. Egged on by the ruling Communist Party, Chinese online activists are punishing foreign companies that have joined a call to avoid using cotton produced in the Chinese region of Xinjiang, where the authorities are waging a broad campaign of repression against ethnic minorities.

It isn’t clear what the long-term impact might be on Western companies that depend on China to make or buy their products. On Thursday, there was still a steady stream of shoppers at several popular H&M and Nike outlets in Shanghai and Beijing. Previous state media-driven pressure campaigns against companies like Apple, Starbucks and Volkswagen failed to dent Chinese demand for their products.

3. There is no correlation between earnings and stock price returns
Researchers have demonstrated that the relationship between economic growth and stock returns was weak, if not negative, almost everywhere. They studied developed and emerging markets across the entire 20th century and provide evidence that is difficult to refute.

Their results suggest that the connection so often made between economic developments and stock market movements by stock analysts, fund managers, and the financial media is largely erroneous.

From 1904 to 2020, earnings growth and stock returns moved in tandem over certain time periods, however, there were decades when they completely diverged, as highlighted by a low correlation of 0.2.

The perspective does not change if we switch the rolling return calculation window to one or 10 years, or if we use real rather than nominal stock market prices and earnings. The correlation between US stock market returns and earnings growth was essentially zero over the last century.

4. The fonts used in luxury watches are not fit for purpose
In reality, only a small and decreasing number of watchmakers go to the trouble of creating custom lettering for their dials. More often, watch brands use off-the-rack fonts that are squished and squeezed onto the dial's limited real estate. Patek Philippe, for example, has used ITC American Typewriter and Arial on its high-end watches. Rolex uses a slightly modified version of Garamond for its logo. And Audemars Piguet has replaced the custom lettering on its watches with a stretched version of Times Roman.

That watchmakers use typefaces originally created for word processing, signage, and newspapers highlights a central paradox of watch design: These tiny machines hide their most elegant solutions under layers of complexity, while one of the most visible components – typography – is often an afterthought.
Even subtle tweaks to a typeface can elevate a watch, but the brands who fully invest in custom lettering view it as a distinguishing factor in their timepiece's design. 

5. Bitcoin consumes more electricity than Argentina
"Mining" for the cryptocurrency is power-hungry, involving heavy computer calculations to verify transactions.
Cambridge researchers say it consumes around 121.36 terawatt-hours (TWh) a year - and is unlikely to fall unless the value of the currency slumps.

The online tool has ranked Bitcoin’s electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh) - and it is gradually creeping up on Norway (122.20 TWh).
The energy it uses could power all kettles used in the UK for 27 years, it said.

For building a solid long term portfolio, look at subscribing to www.intelsense.in long term advisory.
For technofunda investing and positional trading, subscribe to our Hitpicks advisory service on www.intelsense.in
For momentum trend following systematic trading, subscribe to Quantamental at www.quantamental.in