Weekend Bulletin - 13 Jan'23 : Ed. 120
Weekend Bulletin - 13 Jan'23 : Ed. 120
A compilation of few interesting, multi-disciplinary links from the internet
“In general, in one particular company’s securities, every 2 years or so we have a 10% position. Most of the time, we have 3, and 5, and 6 percent positions as our most favorite ideas. We will take them higher when a cheap position becomes much, much better a bargain or when there’s a catalyst for the realization of underlying value…. We would not own a 10% position in a common stock that was just plain cheap unless we had a seat on the board and control, because too many bad things can happen…. I think when people make mistakes, it often is on both sides of diversification. Occasionally, new managers especially, that aren’t that experienced in the business, will have a 20% position or perhaps even two in one portfolio. And those two might even be correlated – [i.e.] same industry, [or] the same exact kind of bet in two different names. That’s absurdly concentrated; maybe not if you have enormous confidence and it’s your own money, but if you have clients, that’s just not a good idea. But 1% positions also are too small to take advantage of what are usually the relatively few great mispricings that you can find. When you find them, you do need to step in and take advantage.” —Seth Klarman
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Section 1 - Investing & Personal Finance
[1] What economists get wrong about personal finance [LINK]
Sometimes the popular books are simply wrong. For example, a common claim is that the longer you hold equities, the safer they become. Not true. Equities offer both more risk and more reward, whether you hold them for weeks or for decades. (Over a long time horizon, they are more likely to outperform bonds, but they are also more likely to hit some catastrophe.) Yet Choi reckons that there is little harm done by this error, because it produces reasonable investment strategies even if the logic is muddled.
[2] The art and science of spending money [LINK]
Behavioral finance is now well documented. But most of the attention goes to how people invest. Welch’s story shows how much deeper the psychology of money can go. How you spend money can reveal an existential struggle of what you find valuable in life, who you want to spend time with, why you chose your career, and the kind of attention you want from other people.
Section 2 - Economic Trends & Themes
What the West doesn’t know about China’s Silicon Valley [LINK]
[In] the West, and particularly the US, impressions of Chinese tech companies tend to focus on theft of intellectual property or fears they are acting as arms of the Communist Party. There are documented cases of government-affiliated hackers stealing trade secrets to benefit Chinese industry, but Zhonguancun tech firms are too often unfairly written off as inferior copies of their Western counterparts. Less discussed are the ways they have made the Chinese economy and culture more open—or created good products. Despite the often vague national security concerns voiced about TikTok by US politicians, ByteDance cofounder Zhang Yiming appears to be foremost a tech product visionary. He has created an app so effective that more than a billion people are hooked, and executives at Meta and other Silicon Valley companies are terrified their products are becoming irrelevant.
Section 3 - Personality study & Development
[1] How James Patterson writes 31 books at a time? [LINK]
Well, it could be anything. Pretty much every day I'll get stuff to read. In terms of the routine that we follow with the co-writers, in 95 percent of the cases I will write a 50- to 70-page outline. I then encourage the co-writer to contribute, because I want the contributions and I want them emotionally involved, which is important. If they're just going to do a workman-like job, I don't really want them. I want to see pages every couple of weeks, unlike publishers who say, go ahead, and then a year later go, this isn't what I was looking for. But with every couple of weeks, I can say, ‘Wonderful’—which I love to say—‘you're the best, this is terrific, best pages ever.’ Or I might say, ‘We're going sideways here. We've lost the pace. This is not the tone of voice of a Women's Murder Club story,’ or, ‘We're not buying this part,’ or, ‘These three chapters seem flat.’ It’s so much easier to deal with 30 pages than it is to deal with 400 pages.
Section 4 - Business History & management
[1] The 46yr old brewing tragedy in Joshimath [LINK]
The report pointed out that Joshimath is situated on a deposit of sand and stone, and is not suitable for a township. Vibrations, caused by blasting and heavy traffic, will also lead to disequilibrium in natural factors, it said.
“The lack of proper drainage facilities also accounts for landslides. The soak pits which exist are responsible for creating cavities between soil and boulders. It will lead to water seepage and soil erosion,’ it said.
“Suggesting remedial measures, the report said heavy construction work should only be allowed after examining the load-bearing capacity of the soil. For road repair and other construction work, it would be advisable not to remove boulders by digging or blasting the hillside. In the landslide-prone areas, stones and boulders should not be removed from the bottom of the hill, as it will cause loss of support, it said.
[2] The Story of Japan’s Lost Decade [LINK]
If it was a normal recession, this policy would have gradually recovered the economy.
However, this was no ordinary recession; this was the biggest bubble in history that had just collapsed!
To address the root cause of the bubble, not only was it necessary to create demand through stimulus, but also to clean up Japan's financial sector.
While the government was able to spur consumption to some extent by scattering money, the banks and securities companies were not functioning properly, causing the flow of money to simply form new bubbles.
After some time of ever-increasing government stimulus, nothing had really changed. All that was left for the people was a recession with no end in sight and a massive financial deficit due to the issuance of deficit-covering government bonds
Section 5 - Sports, literature & Entertainment
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[1] How Hindi films saw liberalization? [LINK]
Liberalization changed Bollywood’s attitude toward money—and its villain profile. The move away from protectionism meant that dealers in contraband weren’t needed as they had been before. This led to the fading away of the smuggler, a staple villain (and sometimes antihero) from the 1940s to the early 1990s, as well as the black marketeer. The corrupt politician survived and adapted, as did the Hindi film gangster. The power-hungry industrialist and the manipulative seth turned increasingly benign; the hero or heroine’s father in 1990s rom-coms was often a businessman of some kind. Wealth was no longer a red flag.
[2] Don’t overead the Naatu Naatu Golden Globes award [LINK]
In fact ‘Naatu naatu’ is massively at odds with some of the most brilliant film music that’s been the life and blood of the various film industries in various parts of the country but hasn’t found international nominations. This is so for several reasons, including a shortage of money, lack of awareness, and often lack of lobbying—none of which seems to be an issue for RRR. Imagine any of the fabulous Ilayaraja or A R Rahman tunes, or the brilliance of music from Madan Mohan and Naushad that never found international recognition. Or even some of M M Keeravani’s own pieces such as ‘Tum mile’ (Criminal, 1995) and ‘Awarapan banjarapan’ (Jism, 2003), which stand ready to take on any academy anywhere, and which are so much better than ‘Naatu naatu’ in every way. Even Rahman and lyricist Gulzar’s ‘Jai ho’, the Oscar winner for 2010 in the Best Original Song category, wasn’t the composer’s best, but unlike ‘Naatu naatu’, it actually came with a clear tune and a hook.
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That's it for me. Have a great weekend ahead!
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