Weekend Reading

 

Upfront

I shared some thoughts with Ajaya Sharma, Senior Editor-Markets, Anchor- ET NOW on how the economy is looking and which industries are shaping up to do well. For those who prefer reading, here is the link to the transcript.

Views on Markets & Investing

Endurance is the key for long term returns

The most important investing question is not, “What are the highest returns I can earn?”   It’s, “What are the best returns I can sustain for the longest period of time?”   Compounding is just returns to the power of time. Time is the exponent that does the heavy lifting, and the common denominator of almost all big fortunes isn’t returns; it’s endurance and longevity. “Excellent returns for a few years” is not nearly as powerful as “pretty good returns for a long time.” And few things can beat, “average returns sustained for a very long time.”   That’s the biggest but most obvious secret in investing: Average returns for an above-average period of time leads to magic. https://www.collaborativefund.com/blog/keep-it-going/

How fund managers talking their book is actually trying to get you to buy their holdings

While other firms go out of their way to hide their investments, ARK is an open book. This is also uniquely tailored to our current market environment. It’s effectively pushing a press release to the entire world every day. The financial media eats it up, while it dominates social media. They remain in the conversation every single day.   That simple push of numerical information catalyzes an army of investors, all looking for guidance, affirmation, and just something to think about, to think about your stocks. Every day you manage to live, as the saying goes, rent-free in all of our heads.   It’s become pretty clear in the past decade there’s a correlation between power and the space you occupy in our collective consciousness. This is even more applicable in financial markets (than, say, politics) as this kind of feedback loop can result more directly in a desirable outcome. Cathie Wood’s sole job is to get others to buy the stocks she owns, and with one email push, it’s magically done. https://www.readmargins.com/p/cathie-wood-and-content-strategy

Road Wirelessly Charges Electric Cars as They Drive

Stellantis isn’t exactly a household name as far as car makers go, but it’s the parent company for iconic brands like Jeep, Chrysler, Dodge, Ram, and even Maserati. It recently unveiled a unique new test track in Chiari, Italy, called the “Arena del Futuro” circuit (Arena of the Future) that could potentially allow EVs to run laps forever without ever needing to stop and charge.   Along with a handful of partnering companies, they have embedded a series of coils just below the track’s asphalt surface as part of a system called Dynamic Wireless Power Transfer, or DWPT. It’s more or less a similar approach to the charging pad that lets you simply set your smartphone down to charge its battery without having to plug anything in, with DWPT using a long chain of coils to transfer power while a vehicle is still in motion.   To take advantage of the track’s power-sharing capabilities, an EV simply needs to be upgraded with a special receiver that sends the power directly to its electric motor. In testing, a Fiat New 500 was able to maintain highway speeds while circling the track without having to use any of the power stored in its batteries. https://gizmodo.com/wireless-charging-road-electric-cars-street-stellantis-1849058448

Is cultured meat the next step in the evolution of meat-eating?

Cultured meat—not to be confused with plant-based meat—is grown from animal cells and is biologically the same as meat that comes from an animal. The process starts with harvesting muscle cells from an animal, then feeding those cells a mixture of nutrients and naturally-occurring growth factors (or, as Good Meat’s process specifies, amino acids, fats, and vitamins) so that they multiply, differentiate, then grow to form muscle tissue—in much the same way muscle grows inside animals’ bodies.   “Cultivated meat matters because it will enable us to eat meat without all the harm, without bulldozing forests, without the need to slaughter an animal, without the need to use antibiotics, without accelerating zoonotic diseases,” Tetrick said.   Meat can be “harvested” (their word, not mine) just four to six weeks after initiating the growth process—but it’s not a matter of plucking a ready-to-package breast from a vat and shipping it off to the grocery store. Besides going through safety and regulatory reviews, the harvested cells need to be turned into something resembling traditional meat. Good Meat says it uses 3D printing, extrusion cooking, and molding to refine the shape and texture of the product. https://singularityhub.com/2022/06/01/the-worlds-biggest-cultured-meat-factory-will-soon-be-built-in-the-us/

Peter Lynch’s Rule for Dealing with Mistakes

Lynch has a rule for dealing with his mistakes. The instant he realizes he’s made a mistake, he gets out.   Unfortunately, many investors turn one mistake into many. They compound the problem.   Our first reaction toward losses is to make the money back. So the next mistake starts with wanting to get back to even. Which rarely goes as planned. Instead, we turn a small loss into a bigger loss. But that’s compounded by the opportunity cost of putting those dollars to work somewhere else.   So Lynch’s rule is difficult to follow but the best solution for mistakes is to sell immediately. Cut your losses. Learn from it, if you can. Move on.   It’s never easy to deal with mistakes but the goal with any mistake is to limit the damage. https://novelinvestor.com/peter-lynchs-rule-for-dealing-with-mistakes/