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Thursday 9 May 2019

Weekend Reading - Some Interesting Stuff


1) Do nothing to achieve more
All of us have a problem with busyness. But being busy and being successful are not one and the same. But, doing less or nothing at all is easier said than done, especially in a society that suffers from extreme busyness. Bill Gates attributes much of Microsoft’s success to the big ideas and concepts he stumbled upon while doing nothing.
On either Saturday or Sunday, force yourself to step away from all forms of technology — a practice known as a digital sabbath. Shut off your smartphone and hide it in your closet. Power down the laptop and slide it under your bed. Give your brain space to think by stepping away from the daily grind and doing nothing. Your mind will have time to stumble upon new ideas and further process old ones.


2) Can you do better by working 4 days-a-week?
A 4-day work-week is being discussed by a lot of corporates and productivity experts. Here is one company in Australia which has tried it.
A mid-week break lets staff go to the gym, get on top of housework, look after young children, schedule appointments, work on their start-up or just watch Netflix. Sometimes, they’ll catch up on work. Sick days are down, staff satisfaction is up, says Blackham. “You get that Monday feeling a couple of times a week.”
For employers, shutting down mid-week gives “more bang for your buck”. he says. “The Wednesday break means you return to Thursday fresh, and this is when people feel most productive.”
Some start-ups which have trialled the four day week in the US have had to return to five day working after finding the day off made the company less competitive and staff more stressed. 


3) Is free good for you?
Technology companies based in Seattle or Silicon Valley now account for five out of the five most valuable companies in America.
Big Tech has, in some sense, gotten “too big.” And in 2019, politicians are starting to listen.
The issue is complicated by the fact that even though it’s convenient to shorthand Microsoft, Google, Amazon, Apple, and Facebook as “Big Tech,” these five companies are actually structured in very different ways.
Contemporary antitrust law mostly cares about high prices. The standard, in other words, isn’t that one company dominating a market is bad. It’s that it’s bad if a company’s market domination leads to bad outcomes for consumers.
However, most of the big tech is cheaper or provide better service to the end customer making them difficult to prosecute. Google provides nearly all of its services for free. Amazon makes shopping cheaper. Anti-trust needs to find out a balance between low prices and utility to the customers.


4) We are killing the planet and ourselves; we just don't realize it yet
Humans are transforming Earth’s natural landscapes so dramatically that as many as one million plant and animal species are now at risk of extinction, posing a dire threat to ecosystems that people all over the world depend on for their survival
Humans are producing more food than ever, but land degradation is already harming agricultural productivity on 23 percent of the planet’s land area.
Over the past 50 years, global biodiversity loss has primarily been driven by activities like the clearing of forests for farmland, the expansion of roads and cities, logging, hunting, overfishing, water pollution and the transport of invasive species around the globe.


5) The food we eat is killing us
Health officials around the world are struggling with the explosive rise of deadly drug-resistant strains of the fungus Candida auris, which prey on people with weakened immune systems. Worryingly, their emergence may be tied to indiscriminate use of fungicides in agriculture and food production.
Antibiotics are applied on a massive scale in food production, pushing the rise of bacterial drug resistance. A British government study published in 2016 estimated that, within 30 years, drug-resistant infections will be a bigger killer than cancer, with some 10 million people dying from infections every year.
“Food is no longer valued for its ability to sustain life,” Walker concludes, “but only for its ability to generate profits.” 



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Monday 6 May 2019

Investing is an active game

Cornelius Vanderbilt, known to his contemporaries as the Commodore, was once the richest man in the world. He started his life at the bottom and worked his way up. His business empire started with one passenger boat and he went on to own a large steamboat business. Later he diversified into the railroad business and owned the New York Central Railroad by 1867. He passed away in 1877, leaving more than $100 million, which was more than the money that was held by the US Treasury at that time). His last words to his family were, ''Keep the money together.''  Even today, there is the Grand Central Terminal, a Vanderbilt building still standing in New York City that carries the legacy of the great businessman.

Interestingly, within a period of 50 years, one of the direct descendants died bankrupt. The history of the Vanderbilt family is extremely instructive at many levels.

Other than the obvious reasons of prudence in managing costs and expenses and living within one's means, you also learn that no amount of wealth can be perpetuated forever if the custodians do not value money. When you know that no new money is going to come in then you need to value what you have much more. It does not matter how much money you have to start with. Unless you save more than what you earn, wealth will erode.

The most logical action to take for enduring wealth is to invest in businesses which earn high returns on capital and does not blow up doing so. Wealth creation and wealth preservation are not mutually exclusive. The best way to preserve wealth is to create it in the first place. Owning a business is the best and most efficient way of doing so.

As an investor, one useful way of thinking that I have used is to think of myself as a person with a small bag of money who is going around allocating that to different people in order to get a reasonable return. I visualize that I am getting into a partnership with the promoter of the company for some time and get a return from the business. If the business stops doing well after some time, I take my money back and then get into a partnership with another promoter. 

This line of thought forces me to think about the quality of the promoter whom I am partnering with, long-term dynamics of the business, the strategy the business is following and also ensure I am tracking the progress of the business. It also helps in preventing too many knee-jerk reactions to purely market-related events.

This means that even if I am invested in a very good company, I still need to continuously monitor it to ensure that it is doing exactly what it had promised and planned to do. If there are deviations, I need to understand why and what actions are being taken to course-correct. Investing is not a passive game. We have to be constantly vigilant and keep an eye out for what is happening.

P.S. If you want to read more about the Vanderbilt family, you can pick the fascinating book, "Fortune's Children: The Fall of the House of Vanderbilt" written by Arthur T. Vanderbilt.
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Thursday 2 May 2019

Weekend Reading - Some Interesting Stuff


Here are the top 5 articles I found interesting this week. 

1) A look at BYD, the world's largest electric vehicle manufacturer
Founded in Shenzhen in the mid-1990s as a manufacturer of batteries for brick-size cellphones and digital cameras, BYD now has about a quarter-million employees and sells as many as 30,000 pure EVs or plug-in hybrids in China every month, most of them anything but status symbols. Its cheapest model, the e1, starts at 60,000 yuan ($8,950) after subsidies.
Last year, BYD opened one of the world’s largest battery plants, a 10 million-square-foot facility in Qinghai province, and in February it broke ground on another of similar size.
China has adopted EVs at a stunning pace. Thanks to generous government subsidies and municipal regulations that make owning an internal combustion vehicle in many cities inconvenient, expensive, or both, China accounts for more than half the world’s purchases of electric cars. More EVs were sold in Shanghai last year than in Germany, France, or the U.K.; the city of Hangzhou, smallish by Chinese standards, had higher sales than all of Japan. Virtually all of Shenzhen’s 20,000 taxis are electric BYDs, compared with fewer than 20 of any make in New York. More than 500,000 electric buses ply Chinese roads, compared with fewer than 1,000 in the U.S.


2) Amazon is helping Indians take their products global
Indian sellers exporting their wares on Amazon’s global marketplace rose to more than 50,000 in 2018, and together sold goods worth over $1 billion. By 2023, Amazon expects this volume to rise to $5 billion. Launched with just a few hundred sellers in May 2015, more than 50,000 Indian exporters are now part of the Amazon Global Selling programme, offering more than 140 million made-in-India products to Amazon customers in the US, UK, Australia, China, south-east Asia and other overseas markets.


3) Can we use technology to break the vicious cycle of airconditioners and atmospheric heat 
Use of the energy-intensive air-conditioner causes emissions that contribute to higher global temperatures, which means we’re all using AC more, producing more emissions and more warming.
“If you cool something, you heat something, and that heat goes into the cities.” Their use exacerbates the heat island effect of cities—lots of concrete soaks up lots of heat, which a city releases well after the sun sets.
Using technology currently in development, AC units in skyscrapers and homes could get turned into machines that pull carbon dioxide out of the atmosphere.

4) Water crisis and climate change are becoming scary, but is anyone looking to solve these issues
More than 600 million Indians face “acute water shortages,” according to a report last summer by NITI Aayog. Seventy percent of the nation’s water supply is contaminated, causing an estimated 200,000 deaths a year. Some 21 cities could run out of groundwater as early as next year, including Bangalore and New Delhi, the report found. Forty percent of the population, or more than 500 million people, will have “no access to drinking water” by 2030. Climate change will surely make the problem worse.

5) How Satya Nadella has led the transformation of Microsoft to regain its formal glory
Under Satya Nadella, Microsoft has more subscribers than Netflix, more cloud computing revenue than Google, and a near-trillion-dollar market cap. Microsoft cut funding to Windows and built an enormous cloud computing business—with about $34 billion in revenue over the past year—putting it ahead of Google and making progress in key areas against the dominant player, Amazon Web Services.
Microsoft’s Office collection of productivity software, formerly a one-off purchase is now a cloud-based service boasting more than 214 million subscribers who pay around $99 a year; it has more subscribers than Spotify and Amazon Prime combined.


For those on the path of the cycle "Fani", please stay safe.
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Friday 26 April 2019

Weekend Reading - Some Interesting Stuff


Today, everybody talks about how much information is bombarding us. Imagine what it must have been like after the printing press when people who had been totally devoid of information had all of this information flooding them. The powers-that-be rebelled against that. Shortly after the printing press was developed, a Swiss scholar sat down and said, “I’m going to catalogue all of the books that have been printed thus far.” He ended up warning of the harmful magnitude of books and how it will create nothing but chaos. Well, that’s kind of like what we’re experiencing today on the internet, isn’t it?


How streaming content providers like Netflix and Amazon Prime Video is changing the game.
HBO is so successful because it never had to cater to advertisers. It only had to cater to its audience, who was paying them directly to not have ads. Amazon is more audience-focused than advertiser-focused.


As Apple and Amazon compete for a greater share of consumer dollars and attention, they also have a particularly intimate business relationship: Apple is spending more than $30 million a month on Amazon’s cloud. At these rates, AWS would be picking up more revenue from Apple than from several other companies, including Adobe, Capital One, Intuit, Lyft and Pinterest. People use more than 1 billion Apple devices each month, and accordingly, Apple has considerable computing and storage requirements. The company is investing heavily to build its own infrastructure: In January 2018, Apple announced plans to spend $10 billion on data centers in the U.S. within five years. In December, Apple said it would spend $4.5 billion of that amount through 2019.


An EV with a daily commuting distance of 30–40 km needs 6-8 kWh of energy, equivalent to the daily power needs of a small household. If 80% of India adopts EVs, the total power demand could touch 100 Terawatt-hour or about 5% of the total electricity demand of India by 2030.
This presents unique challenges for power utilities, which will need to increase production and resolve the issue of too many people charging at the same time from a single grid.
This additional burden can be managed only by deploying intelligent tariff and pricing solutions, with minimal network investment.
Another solution deployed by states like Maharashtra is a variable tariff structure called time of use (ToU). It means power tariffs will be cheaper at certain times of the day when the demand is usually low.
Integrating power generation from renewable sources with conventional grids in order to meet EVs’ demand is key. If India wants to see an effective reduction in pollution levels through EVs, the sector cannot be seen in isolation.\A vehicle running on electricity may be considered clean, but it is not really a zero-emission vehicle if the power source is coal. India generates a majority—about 65%—of its energy demand through coal.


When you speak, your brain sends signals to your lips, tongue, jaw, and larynx, which work together to produce the intended sounds. Now scientists in San Francisco say they’ve tapped these brain signals to create a device capable of spitting out complete phrases. The effort doesn’t pick up on abstract thought, but instead listens for nerves firing as they tell your vocal organs to move. Previously, researchers have used such motor signals from other parts of the brain to control robotic arms.


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Thursday 18 April 2019

Weekend Reading - Some Interesting Stuff


1) Now we have drones doing something good for the world. The startup, Biocarbon Engineering, makes and uses drones to plant trees and grasses at abandoned mines in Australia and on sites in other parts of the world.

The project began in 2012, after the government began opening the country’s borders to international business. More than six million trees have been planted so far, and the nonprofit plans to plant another four million by the end of 2019. But it also recognizes that humans can’t easily cover the amount of land that could potentially be restored.


2) By 2025, China’s leaders want annual sales of new-energy vehicles –- including pure-battery electrics, plug-in hybrids and fuel-cell cars -- to reach 7 million units. That’s the equivalent of about 20 percent of China’s total auto market.

There are now 486 EV manufacturers registered in China, more than triple the number from two years ago. While sales of passenger EVs are projected to reach a record 1.6 million units this year, that’s likely not enough to keep all those assembly lines humming, prompting warnings that the ballooning EV market could burst and leave behind only a few survivors.


A study made for Europe says India has the highest levels of small particulate-matter pollution (PM2.5) globally, according to the WHO, and is home to 16 of the 30 most-polluted cities in the world. A Lancet report from 2018 found that air pollution in India causes about 1.2 million early deaths a year. Reducing pollution will have profound impact on life-expectancy and lower healthcare costs. Yet, unfortunately, no political party talks about it in an election year.


4) A wonderfully detailed look at platform businesses.
Though they come in many varieties, platforms all have an ecosystem with the same basic structure, comprising four types of players. The owners of platforms control their intellectual property and governance. Providers serve as the platforms’ interface with users. Producers create their offerings, and consumers use those offerings.

To understand how the rise of platforms is transforming competition, we need to examine how platforms differ from the conventional “pipeline” businesses that have dominated industry for decades. Pipeline businesses create value by controlling a linear series of activities—the classic value-chain model. Inputs at one end of the chain (say, materials from suppliers) undergo a series of steps that transform them into an output that’s worth more: the finished product. 

Apple’s handset business is essentially a pipeline. But combine it with the App Store, the marketplace that connects app developers and iPhone owners, and you’ve got a platform.


5) If you want to understand where China is heading, the best guide may be private equity veteran Weijian Shan. His take on his country’s current economic predicament: Its slowdown has only just begun, but its long-term health looks sound.

The first of two immediate problems, he says, is a severe contraction in credit. “Two years ago, the government started cracking down on the ‘shadow banking’ network that provided most of the credit to the private sector,” he says, adding that private enterprise is dominated by small and medium-sized businesses (SMEs) in China. Beijing was worried that trust companies and other lenders in the “shadow” system were dangerously over-extended, and the motley group might crash, hobbling the economy.

The second deadweight is the trade dispute with the U.S. “The direct impact on business is small,” he says. “But the impact on business confidence is large. The dispute is hitting confidence among Chinese producers, and discouraging them from investing.”



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Friday 12 April 2019

Weekly Reading: Some Interesting Stuff

Nearly two-thirds of the residents of Okinawa are still functioning independently at age 97. That meant they were in their own homes, cooking their own meals and living their lives fully -- at nearly 100 years old!
If you ask anyone in Okinawa why they live so long, you will doubtlessly hear two words: ikigai and moai.
Ikigai, loosely translated, means sense of purpose in life. And in Okinawa, a person's ikigai often grows as they get older. It is their reason for living, that thing that propels them out of bed in the morning.
Moai is an informal social group of people who have common interests and look out for each other. Your moai is your "tribe" and another reason Okinawans believe they live so long.


Researchers at Yale and Oxford say exercise is more important to your mental health than your economic status. According to the study, three to five training sessions, each lasting between 30 to 60 minutes, are ideal per week.  The scientists also noticed that certain sports that involve socializing — such as team sports — can have more of a positive effect on your mental health than others.


Google’s Stadia project is motivated, to a greater or lesser degree, by the desire to maintain its predominance as the home of gaming video. As of right now, Google gets more than 200 million logged-in daily active users watching gaming content. That’s 200 million pairs of eyes to present ads to every day. In 2018, YouTube accumulated more than 50 billion watched hours of gaming content. “Gaming has always been the backbone of YouTube since the platform was first founded,” notes YouTube’s gaming director Ryan Wyatt.
The future of cloud gaming is approaching, and instead of trying to play nice with its leaders, Google is choosing to become a leader itself. Because the YouTube moneymaking beast must be fed.


The explosion of internet access has brought a wave of social change, but nothing as ubiquitous as the consumption of online videos. As many as 245 million Indians watch YouTube on their phones each month — in farms and factories, buses and trains, homes and hotel rooms.
India’s craze for videos is shaking the world of entertainment. Valued at more than $700m, the country’s online video market is shaping the content and pricing models of local and global companies.
For many young Indians, YouTube itself is synonymous with the internet. They use it to ask questions, make friends and learn skills. In towns where teachers don’t show up at schools and colleges, students are switching to YouTube channels that “cover” their syllabus.
https://www.ft.com/content/c0b08a8e-4527-11e9-b168-96a37d002cd3 (Free sign-up for limited number of articles per month)


What's exciting about OTT video isn't the way it's delivered, but how it will change content itself. The most fascinating aspect of new distribution technologies in media is how they transform content, rather than just content delivery. Unfortunately, digital-era innovation to date has primarily focused on the latter: on-demand viewing, ad-free experiences, binge releases (or at least binge consumption), recommendation-based discovery, auto-play next and skip credits, etc.
https://redef.com/original/5c866c1bf1ea3f07c9f205e6

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Friday 5 April 2019

Weekend Reading: Some Interesting Stuff

A possible ground-breaking discovery in energy storage. An Australian startup says it's built the world's first working thermal battery, a device with a lifetime of at least 20 years that can store six times more energy than lithium-ion batteries per volume, for 60-80 percent of the price.


How IKEA is changing its business model from selling furniture to renting it out. Thus its moving to the subscription economy.


India has announced that it will eliminate all single-use plastic in the country by 2022. The pledge is the most ambitious yet of the global actions to combat plastic pollution that are taking place in 60 nations around the world.


I am always looking for stories on business failures. Here is a recent one.
WOW Air launched in 2011 as a discount regional carrier that offered cheap, no-frills fares designed to undercut legacy players. Along the way, it decided to compete with the bigger airlines, specifically Icelandair, by offering transatlantic flights. That decision required WOW to upgrade its fleet with larger jets capable of making longer trips.
Because of all the variables involved – many of which companies like WOW cannot control – airlines are inherently risky ventures. “In the case of WOW, it’s likely a combination of multiple factors that created difficulties,” Tsoukalas noted. The company’s aggressive expansion “required a large capital investment and not only complicated its operations, but also made it more difficult to fill the extra seats. At the same time, the company had to deal with upward trending fuel prices … and likely increasing wages as its staff started become more senior. In a sense, over time, some low-cost carriers start resembling legacy carriers more and more.”


Amazon is planning to build a network of more than 3,000 satellites federal filings reveal, in an ambitious attempt to provide global internet access.
Project Kuiper is a new initiative to launch a constellation of low Earth orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world.
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