Weekend Bulletin - 9 Dec'22 : Ed. 116
A compilation of few interesting, multi-disciplinary links from the internet
“Intrinsic value is terribly important and very fuzzy, and we do our best to work...in the kind of businesses where we think that...our predictions are of a fairly highly probable nature. And that leaves out all kinds of companies.” —Warren Buffett [LINK]
In The New Yorker, Jay Caspian Kang warns against reading too much into the China Covid protests [LINK]
It’s a mistake to treat the protesters in China as generic props for global feelings of unrest. These protests, which began after an apartment fire in Urumqi, the capital city of Xinjiang, killed ten or more people, are about many things, but they have primarily focussed on China’s ‘zero Covid’ policy and its stringent lockdowns and security measures, including quarantine camps.
TIME's 2022 Person of the Year is Volodymyr Zelensky and the spirit of Ukraine. In a profile of Zelensky the magazine writes how the two are intertwined. It also highlights the importance of leadership in action [LINK]
Zelensky’s success as a wartime leader has relied on the fact that courage is contagious. It spread through Ukraine’s political leadership in the first days of the invasion, as everyone realised the President had stuck around. If that seems like a natural thing for a leader to do in a crisis, consider historical precedent. Only six months earlier, the President of Afghanistan, Ashraf Ghani—a far more experienced leader than Zelensky—fled his capital as Taliban forces approached. In 2014, one of Zelensky’s predecessors, Viktor Yanukovych, ran away from Kyiv as protesters closed in on his residence; he still lives in Russia today. Early in the Second World War, the leaders of Albania, Belgium, Czechoslovakia, Greece, Poland, the Netherlands, Norway, and Yugoslavia, among others, fled the advance of the German Wehrmacht and lived out the war in exile.
One of the more interesting podcasts we have heard in recent times is Tyler Cowen in conversation with Jeremy Grantham, latter is chief investment strategist at the Boston-based AM firm GMO and has a track record of ‘spotting bubbles’. He does a deep dive into ‘green energy’ and why he believes the ‘markets are efficient’ hypothesis is not always correct [LINK]
In the short term. Greening is a very energy-intensive effort. When you build a windmill, you put all your labour and all your materials and all the mining that went into it upfront. The same with solar, and the same with battery storage. It’s almost weird how incredibly intensive, in terms of energy and resources, it is upfront. Then, when it’s built, it runs itself at almost zero cost.
Sino-US standoff on technology and Chips have caught headlines. Clearly, the Americans are worried about how China’s tech capabilities are growing and some weeks ago, the Biden administration announced a sweeping set of controls that cuts China’s access to semiconductors. How do we decode this? What are the Americans thinking? How might China react? What implications will this have on business? Where does India stand?
To explore these questions, listen to this podcast series (divided into 5 parts) by Indrajit Gupta, Founder Founding fuel with G Venkat Raman, sinologist and professor at IIM Indore [LINK]
Given the national security implications, the central government needs to cobble coalitions within the country and develop public private partnerships with advanced educational institutions and private companies that have high tech prowess. These partnerships will bring new sources of funding for R&D and also more public discourse and awareness.
The argument for and against buying (quality) at any price (BAAP) has been part of social media circles for a few years now in the Indian markets context. The period of 2018-20 belonged to the ‘for’ camp while 2020-22 has belonged to those who were ‘against’ it. Brian Langis writes some solid points about this thesis though the examples are in US context [LINK]
You want to invest in quality businesses at a reasonable price. Overpaying for a quality business is not a quality investment. It’s when you overpay that you get in trouble. Even if you buy the best company in the world, you can lose money if you overpay. Quality is not the equivalent of a good investment. What you pay and what you get in returns is what matters. If the market views a particular stock as a high-quality business, it’s unlikely going to be cheap and it’ll be priced for low returns. So it’s really the search for quality that has been unrecognized or unpriced by the market that’s critical.
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That's it for me. Have a great weekend ahead!
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