Weekend Reading

 

Upfront

Interested in investing in a concentrated portfolio of stocks that help you remain ahead of the curve? One which has outperformed even during the toughest of times? Look no further than the Quiver smallcase from Intelsense. https://intelsense.smallcase.com/smallcase/INSMO_0005

Words of wisdom from Seth Klarman

“I think it’s good to step back from the moment-by-moment noise. Investors sometimes get caught up in the noise, but it’s really important to step back. Investors just should always want to be thinking about their own thinking…we all know we deal with enormous amounts of information we need to filter it down to the useful information.”   “After you buy something you paid for, it doesn’t matter. People cling to the idea that at least they should get their money back; maybe there is bad news, and you should sell before it goes lower; maybe put it into something else where you get your money back, but people prefer to make it back where they lost it. People anchor numbers in their heads, and they hold on to them.”   “A very significant part of my philosophy has to do with managing your psychology. Markets are about the psychology of others.”   “When you focus on return at the exclusion of risk, you try to take more risk to get the return; you get the risk but may or may not get the return. If you focus first on the risk and mitigate or avoid or reduce the risk, then you’ve protected the downside, and then maybe you get the return.” https://thetranscript.substack.com/p/seth-klarman-interview

Make friendship your first priority

Alongside your family, making, cultivating and keeping close friendships may be your life’s most important work.   Yeah, to help your career; building a network is more critical than ever. (I’m the LinkedIn guy, I’m not gonna tell you otherwise). But more than that, friends will be absolutely central to your sense of happiness, connection, and meaning.   Like you, I was able to get a great education, with brilliant faculty teaching enlightening classes. Yet right away it was clear that what would matter much more to me, were my fellow students.   When there’s something important you don’t know, real friends will tell you about it. They might even help you learn it. Your friends can help you see what you can’t see. They’ll help you, you’ll help them, you’ll all do better and go further.   You have a team. Some of your key teammates are your friends. And the ones you share your dreams, fears, and hopes with are the people most able to help you get where you should be going. Because, again: Friends will tell you not what you want to hear but what you need to hear. https://greylock.com/greymatter/reid-hoffman-the-importance-of-friendship/

Timber trading is soaked in blood of the impoverished

Illegal logging destroys habitats, contributes to erosion and the propagation of invasive species, hurts indigenous communities, and interferes with carbon sequestration and the production of fresh air. It’s also extremely lucrative. Timber trafficking generates $50 to $150 billion each year. Around 10 to 30 percent of the international trade in timber is estimated to be illegal; in the tropics, the figure is closer to 90 percent. The business is violent, often tied up with drug smuggling, game poaching, money laundering, and the persecution of indigenous leaders and environmentalists. As U.S. Customs and Border Protection puts it, “The illegal timber trade is soaked with blood.”   Although it is big business, tree poaching is deeply tied to poverty. The forest offers a last-ditch haven for those whom society has failed. https://harpers.org/archive/2022/08/tree-sleuths-how-dna-is-transforming-the-fight-against-illegal-logging

Master the basics

Everyone wants advanced knowledge. But it’s typically the basics that matter most.   Most math is arithmetic, not algebra. Running a business is largely a matter of keeping revenues above costs. Good writing is the product of clear ideas and clean sentences.   All skills break down into elemental components–coding has commands, painting has brushstrokes, comedy has jokes. Mastery of the performance results from mastery of the parts.   We ignore the basics, not because they’re hidden, but because they’re so obvious. Thoughtlessness saves effort but inhibits improvement. Bringing attention back to the basics doesn’t come automatically. We adjust our habits only when they fail to deliver results. https://www.scotthyoung.com/blog/2022/07/25/basics/

One more step towards reducing obesity medically

Wegovy, made by Danish drugmaker Novo Nordisk, is the first in what is shaping up to be a new generation of obesity treatments, which use a hormone to regulate appetite.   Wegovy arrived on the market amid a global obesity crisis. Almost half of Americans are expected to be obese by 2030, a Harvard study found, and that could account for up to 18 per cent of healthcare spending on related conditions, ranging from heart disease and stroke to osteoarthritis. Worldwide obesity rates have tripled since 1975, with 650 million adults obese in 2016, according to the World Health Organization.   When we eat, cells in the small intestine secrete GLP-1, causing the release of insulin, which in turn tempers fluctuations in blood sugar levels. While experimenting with how to create a new hormone, GLP-1-based drug, in the 1990s, Novo Nordisk lab scientists noticed their mice and rats began to lose weight. The hormone’s effect on the brain, they discovered, is to reduce appetite and create a feeling of fullness. https://www.ft.com/content/96a61dc0-249a-4e4e-96a2-2b6a382b7a3b

Weekend Reading

 

Upfront

Interested in investing in a concentrated portfolio of stocks that help you remain ahead of the curve? One which has outperformed even during the toughest of times? Look no further than the Quiver smallcase from Intelsense. https://publisher.smallcase.com/smallcase/INSMO_0005

Quiver Smallcase

Taxes in the ancient world

The first record of organized taxation comes from Egypt around 3000 B.C., and is mentioned in numerous historical sources including the Bible. Chapter 47, verse 33 of the Book of Genesis describes the tax collection practices of the Egyptian kingdom, explaining that the Pharaoh would send commissioners to take one- fifth of all grain harvests as a tax.   Tax practice continued to develop as Greek civilization overtook much of Europe, North Africa and the Middle East in the centuries leading up to the Common Era. The Rosetta Stone, a clay tablet discovered in 1799, was a document of new tax laws decreed by the Ptolemaic Dynasty in 196 B.C.   From the Roman age and through medieval European history, new taxes on inheritance, property and consumer goods were levied, and often played a role in war, either by funding them or provoking them.   Other cradles of civilization, such as ancient China, also levied taxes under the authority of a strong centralized government. The Chinese T’ang and Song Dynasties employed a methodical census record to track their populace and impose the proper taxes on them. These funds and materials were then used to support armies and construct canals for transportation and irrigation, among other projects. The Mongol Empire that took control of much of Asia around 1200 instituted tax policy designed to influence large-scale production of certain goods like cotton. https://onlinebusiness.northeastern.edu/blog/a-brief-history-of-taxation/

Are we ready for solar waste?

India does not have a solar waste management policy, but it does have ambitious solar power installation targets.   Solar waste — the electronic waste generated by discarded solar panels — is sold as scrap in the country. It can increase by at least four-five-fold by the next decade.   Solar panels have a life of 20-25 years, so the problem of waste seems distant. It is likely that India will be faced with solar waste problems by the end of this decade, and solar waste will end up being the most prevalent form of waste in landfills soon.   The large cost gap between recycling and discarding panels in landfills points to an unpleasant truth: The process generates roughly $3 in revenue from the recovery of certain materials.   Recycling a solar panel cost between $20 and $30, according to the National Renewable Energy Laboratory; sending it to a landfill costs $1-2. https://www.downtoearth.org.in/blog/waste/time-s-running-out-is-india-ready-to-handle-34-600-tonnes-of-solar-waste-by-2030–81104

Choose process over goals

Inventing the future is another way of saying “setting goals.” Success, especially in the West, then becomes about achieving those goals. We accumulate accomplishments and call it success. Success is about building a set of daily practices, it is about growth without goals. Continuous, habitual practice(s) trumps achievement-based success.   I think “accomplishments” are traps. Accomplishments, by their very definition, exist only in the past or future—which are not even real things. Pride is the worst of the seven sins and it is closely related to past and future accomplishments. https://www.joincolossus.com/blog/posts/growth-without-goals

Incentives matter

There are few forces in the world as powerful and ubiquitous as incentives. They govern everything from our daily interactions and decisions to our broader organizations and societies.   Charlie Munger, true to his reputation for pithy one-liners, said it best: “Show me the incentive and I will show you the outcome.”   Incentives appear to be uniquely binary: Thoughtfully-designed incentives are likely to create wonderful outcomes. Poorly-designed incentives are likely to create terrible outcomes. Surprisingly, despite their importance, incentives are rarely studied in schools, business programs, or organizations. As a result, humans remain astonishingly bad at establishing appropriate incentives. We consistently create systems that invite manipulation and open the door to unintended consequences. More often than not, we fall into the poorly-designed camp and find ourselves scrambling for answers and quick fix solutions. https://www.sahilbloom.com/newsletter/the-6-principles-of-incentive-design

The process is the destination

We live in a world obsessed with results. We have a tendency to put so much emphasis on whether or not the arrow hits the target. If, however, we put that intensity and focus and sincerity into the process—where we place our feet, how we hold the bow, how we breathe during the release of the arrow—then hitting the bullseye is simply a side effect.   The point is not to worry about hitting the target. The point is to fall in love with the boredom of doing the work and embrace each piece of the process. The point is to take that moment of zanshin, that moment of complete awareness and focus, and carry it with you everywhere in life.   It is not the target that matters. It is not the finish line that matters. It is the way we approach the goal that matters. Everything is aiming. https://jamesclear.com/zanshin

Views on Select Stocks and Sectors - ET NOW

 

The whole of last week I was unwell. After keeping Covid at bay for 2 yrs, it finally caught up with me :-)

Today's interaction on ET NOW

Views on Select Stocks and Sectors

Weekend Reading

 

Upfront

PMS Fund Performance - 2 Months

Time to store your poop!!

The thought of transplanting another person’s poop into your colon may sound unpleasant, and understandably so. Faeces are a smelly mixture of water, undigested food, dead and living bacteria, and other cells and substances. However, the live bacteria in faeces have proven their worth in treating diseases and ailments of the digestive tract. This is why doctors have been transferring faeces from healthy donors to sick patients for years—usually by colonoscopy, enema, or pill—to restore gut health.   There’s just the small matter of finding the right poop, though. Most willing donors are excluded after filling out questionnaires and having their stool, blood, and saliva tested in the lab. Lifestyle, diet, medical history—including the use of antibiotics, which can kill off gut bacteria—and how someone was born can all rule people out.   Emerging research and clinical trial data suggest that all of these concerns could be avoided by patients providing their own samples. “We don’t know a lot about why this works, to be truthful, but it does appear that using your own stool is better and safer than using a random donor,” says Scott Weiss, a professor of medicine at Harvard. https://www.wired.com/story/could-old-poop-cure-future-diseases

The Chinese market is silently changing the Hollywood movie

When the studios started to realize how much money was to be made in the Chinese market, not only did they avoid storylines that would be politically problematic, but they also thought to themselves, “How can we maximize revenue or our interests there?”   One thing that they started doing was casting Chinese actors and actresses in these films. The threat of censorship has also exerted pressure, kind of, on plot points and other elements of the moviemaking process too, right? It’s easier to change a film for the censors before you make the film, even if you haven’t talked to the censors yet.   The movies have become a proxy for the broader rivalry forming between the US and China. I think it ultimately becomes a story of values, and what values are shipped around the world. For a hundred years, Hollywood’s movies have been considered the default global entertainment; someone once said that the movies helped turn America into “an empire by invitation,” a gravitational pull toward the country and its way of life. I think China, which sees its turn at dominating a century, wants to copy that playbook.   So there will be major implications beyond the cinema, when it comes to which heroes are elevated, what stories are told, what stories aren’t told, and ultimately how moviegoers around the world see themselves and see the people in charge. https://www.vox.com/23196838/china-hollywood-red-carpet-schwartzel

There is no substitute for hard work

There are three ingredients in great work: natural ability, practice, and effort. You can do pretty well with just two, but to do the best work you need all three: you need great natural ability and to have practiced a lot and to be trying very hard.   There are three ingredients in great work: natural ability, practice, and effort. You can do pretty well with just two, but to do the best work you need all three: you need great natural ability and to have practiced a lot and to be trying very hard.   As well as learning the shape of real work, you need to figure out which kind you’re suited for. And that doesn’t just mean figuring out which kind your natural abilities match the best; it doesn’t mean that if you’re 7 feet tall, you have to play basketball. What you’re suited for depends not just on your talents but perhaps even more on your interests. A deep interest in a topic makes people work harder than any amount of discipline can.   It can be harder to discover your interests than your talents. There are fewer types of talent than interest, and they start to be judged early in childhood, whereas interest in a topic is a subtle thing that may not mature till your twenties, or even later. http://paulgraham.com/hwh.html

Do the work

Do the work. That’s all the productivity advice you need, and the only useful productivity advice you’re ever going to get. You can direct your attention to a million optimizations— email, meetings, notes, calendar, time tracking, goals, todo lists, time estimates, prioritization frameworks, quantified self sensors, analytics, apps, documents, journaling. But don’t. Ignore all this, and do the work. When you do the work, everything else optimizes itself.   Work means sitting down, getting through that calculus chapter, and doing the exercises. No amount of productivity hacking will make that easier. You don’t need pomodoro alarms, bullet journals, time tracking apps, animated explainer videos, or different color highlighters. Everyone doesn’t learn differently. Everyone learns calculus in the same way— by doing the work. You need Rudin’s book, a pen, paper, and time. More tools give you negative utility. They won’t make the work go faster. But they will consume as much time as you are willing to waste. https://www.spakhm.com/p/productivity-advice

Now edit your genes to lower your cholesterol

It’s been 10 years since scientists developed CRISPR, a technology for making targeted changes to the DNA in cells, but until now the method has been tried only on people suffering from rare diseases like sickle-cell anemia, and only as part of exploratory trials.   A volunteer in New Zealand has become the first person to undergo DNA editing in order to lower their blood cholesterol, a step that may foreshadow wide use of the technology to prevent heart attacks.   The experiment, part of a clinical trial by the US biotechnology company Verve Therapeutics, involved injecting a version of the gene-editing tool CRISPR in order to modify a single letter of DNA in the patient’s liver cells.   According to the company, that tiny edit should be enough to permanently lower a person’s levels of “bad” LDL cholesterol, the fatty molecule that causes arteries to clog and harden with time. https://www.technologyreview.com/2022/07/12/1055773/crispr-gene-editing-cholesterol/

Weekend Reading

 

Upfront

I had discussed four megatrends that will drive growth in businesses across the world in the next decade. It is worth revisiting this now to keep it at the top of the mind when looking for new investable ideas.

MegaTrends and Technofunda Outlook

1. The naïve realist

“Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?” The late comedian perfectly captured our tendency to attribute the world’s problems to other people and not ourselves. I’m the only good driver on the road. Everybody else should drive like me.   In a 2016 Ted Talk, Ross joked that people “believe that their take on the world is the objective one, and what has to be understood or explained is, ‘What is it about those other people that seem to get it wrong?’” Ross came to call this “naïve realism,” the tendency for people to think they see the world objectively, as it is, free from personal bias. Ross established three characteristics of the “naïve realist.”   First, the naïve realist believes that their perceptions are realistic and “objective.” Accordingly, other people (at least, reasonable other people) should share their beliefs, preferences, and convictions. Second, the naïve realist expects that any reasonable, open-minded person will be persuaded to agree with the naïve realist if there is disagreement between parties. If there is disagreement, and if the disagreeing party is a reasonable person, presenting the “real facts” should restore harmony. Third, anyone who disagrees with the naïve realist after the presentation of real facts is unreasonable, biased, or irrational. https://nautil.us/are-you-a-naive-realist-20403/

2. The longer your time horizon, the calmer life becomes.

Short time horizons may increase anxiety too. Consider the difference between a day trader and a buy-and-hold investor. The archetype of the day trader is something like Jordan Belfort from Wolf of Wall Street. He lives in a state of perpetual urgency, as his portfolio swings between immense highs and lows. Looking at my friends who used to trade, I swear their hairs have grayed a little faster. I contrast them with the buy-and-hold style of Warren Buffett, who is famous for sitting in his office and reading all day. Though he’s been investing for decades, his strategy’s never really changed: buy good companies at an under-valued price and hold them for a long time. Though his life is certainly more hectic than the one he projects, Buffett reminds us that a long-term outlook will narrow your emotional amplitude.   The cadence of your work shapes your temperament. When you’re a day trader, every phone notification matters. But when you’re a committed buy-and-hold investor, you can mostly ignore them. The longer your time horizon, the calmer life becomes. Zoom out far enough and once-gargantuan hurdles turn into tiny speed bumps on the road of life. https://perell.com/essay/hugging-the-x-axis/

3. Are mobile phones responsible for loss of memory?

Does having more memory in our pockets mean there’s less in our heads? Am I losing my ability to remember things – from appointments to what I was about to do next – because I expect my phone to do it for me? Before smartphones, our heads would have held a cache of phone numbers and our memories would contain a cognitive map, built up over time, which would allow us to navigate – for smartphone users, that is no longer true.   Smartphone use can even change the brain, according to the ongoing ABCD study which is tracking over 10,000 American children through to adulthood. “It started by examining 10-year-olds both with paper and pencil measures and an MRI, and one of their most interesting early results was that there was a relationship between tech use and cortical thinning,” says Larry Rosen, who studies social media, technology and the brain. “Young children who use more tech had a thinner cortex, which is supposed to happen at an older age.” https://www.theguardian.com/global/2022/jul/03/is-your-smartphone-ruining-your-memory-the-rise-of-digital-amenesia

4. Good procrastination

There are three variants of procrastination, depending on what you do instead of working on something: you could work on (a) nothing, (b) something less important, or © something more important. That last type, I’d argue, is good procrastination.   That’s the “absent-minded professor,” who forgets to shave, or eat, or even perhaps look where he’s going while he’s thinking about some interesting question. His mind is absent from the everyday world because it’s hard at work in another.   In fact, it may not be a difference in degree, but a difference in kind. There may be types of work that can only be done in long, uninterrupted stretches, when inspiration hits, rather than dutifully in scheduled little slices. Empirically it seems to be so. When I think of the people I know who’ve done great things, I don’t imagine them dutifully crossing items off to-do lists. I imagine them sneaking off to work on some new idea. http://paulgraham.com/procrastination.html

5. The greatest threat to results are boredom and impatience

The only way to become good at something is to practice the ordinary basics for an uncommon length of time. Most people get bored. They want excitement. They want something to talk about and no one talks about the boring basics. For example, we know that dollar-cost averaging into an index fund is likely to generate wealth, but cryptocurrency will give us a bigger thrill. Boredom encourages you to stop doing what you know works and do something that might work.   Another way to mess up a good thing is to try and accelerate the natural pace of things into an unnatural one. A good idea taken to the extreme is always a bad idea. Working out for 15 hours a day won’t make you healthier, it will get you injured. Investing with a lot of leverage won’t make you rich faster, it will wipe you out. A lack of patience changes the outcome. https://fs.blog/brain-food/may-22-2022/