Samit Vartak on valuations and opportunities
Samit Vartak on valuations and opportunities
Chai, Vada Pav & Markets with value investors Mohnish Pabrai & Guy Spier
A good compilation of investing related blogs, articles, podcasts, books etc.
Wonderful interview of trading legend Mark Douglas, analysing investor psychology and money management. Generally I prefer books to videos, but this is an exception.
One of the headline article in today’s edition of Economic Times. A very interesting read …for anyone interested in 2,3 or 4 wheeler stocks.
This is one of the best article’s I have read this year. So many wow moments in this. Here are some excerpts:
When a supernova explodes, the blast wave creates high-energy particles that scatter in every direction; scientists believe there is a minute chance that one of the errant particles, known as a cosmic ray, can hit a computer chip on Earth, flipping a 0 to a 1. The world’s most robust computer systems, at NASA, financial firms, and the like, used special hardware that could tolerate single bit-flips. But Google, which was still operating like a startup, bought cheaper computers that lacked that feature.
They were relentless optimizers. When a car goes around a turn, more ground must be covered by the outside wheels; likewise, the outer edge of a spinning hard disk moves faster than the inner one. Google had moved the most frequently accessed data to the outside, so that bits could flow faster under the read-head, but had left the inner half empty; Jeff and Sanjay used the space to store preprocessed data for common search queries.
A list of the best scientific innovations of 2018. A fascinating peak into where we as humans are going. Things like Iron-Man jet suit, indoor smart garden, shape-shifting vehicle wheels and the world’s first migraine prevention drug make the list interesting and entertaining.
New technology is the key reason for today’s high equity valuations, he said: “It’s created this vision of a world for all of us where we can have high growth and no inflation forever.” But the United States has had many periods of technological change since the late 1800s and none ever produced permanent high growth and low inflation.
So China will abandon its link to the dollar. “It’s just not conceivable that the second-biggest economy in the world would take its monetary policy from Washington, DC,” Napier said. He expects an initial devaluation, then a free-floating RMB that allows China to inflate away its debt. And when the currency relationship ends, so will the nirvana of high US growth, low inflation, and high equity valuations.
A fascinating article on how Sweden has managed to be great at creating new start-ups in business and the changes it has put in place over the last 30 years to get where it is today.
How can 2018 be complete without something about graphite
Over the next five years, demand for graphite electrodes is expected to outstrip supply, keeping prices high. (Capacity is expected to grow by 8 percent annually, but demand should grow by 12 percent.) “We see this uplift as structural,” noted Sumangal Nevatia in a Macquarie Research report in June. “With no substitute, growing demand and limited new supply, graphite electrodes are now more a ‘strategic resource’ than a ‘commodity.’ ”
This article is not directly related to investing but gives many hints about the future, many of the big old industries will be having due to the rapid scale of change witnessed by solar and wind power and also the huge effort by governments of various nations on pollution
There has to be excessive prudence and redundancies since RBI is the lender of last resort. Saying these provisions are excessive and arguing for trimming it sounds very short-sighted. Things like these should not be over-optimised because you never know where the next black swan will come from. Rupee appreciating against the dollar can happen because of dollar depreciating and can have nothing to do with the rupee. This is a real scenario and trying to optimise currency revaluation account based on how the past has played out is extremely short-sighted. Maybe the author wouldn’t mind optimising his body and donating a kidney? He can argue with himself that he has one too many.
Govt is asking for $51 billion for its pre election spending.Lot of big players are sitting on the sidelines to see what gets implemented. Some people are anticipating an opportunity to profit from Central bank mistakes which come rarely.
I liked this. Interesting data and a very good section on valuation. Lot of takeaways from subsequent panel discussion as well. Worth watching fully.
A Dozen Things I’ve Learned from Charlie Munger (Distilled to less than 500 Words) by @TrenGriffin
STAY IN YOUR CIRCE OF COMPETENCE: Know the edge of your own competency. It is not a competency if you don’t know the edge of it.
MAINTAIN A MARGIN OF SAFETY: Buy assets at a bargain so your investing results can be financially attractive even if you make a mistake. Price is not always the same as value. Avoid big mistakes. Reputation and integrity are your most valuable assets. Reputation earned over a lifetime can be lost in seconds.
THINK INDEPENDENTLY AND WITH OPPORTUNITY COST IN MIND: Markets and crowds are not always wise. Allocate your time and other resources to your most attractive opportunities. The highest and best use of a resource is always measured by the next best use.
BE INTELLECTUALLY HUMBLE: Recognize that the world is genuinely complex and that what you know is a fraction of what you still don’t know. Wait for what you expect rather try to forecast timing. Think about second order and above impacts of anything.
BE SMART BY NOT BEING STUPID: Tune out stupidity. The greatest and most important risk is permanent loss of capital, not just volatility in price. Only accept risk when you are properly compensated for assuming that risk. Activity for its own sake is not intelligent.
BE PATIENT, BUT AGGRESSIVE WHEN IT IS TIME: Great opportunities do not appear that often, but when they do appear they won’t last long so you must be aggressive when the time is right. When the odds of success are very substantially in your favor, bet big.
BE PREPARED: Great investments are hard to find but by consistently working hard you might find a few of them. You only need to find a few great investments in a lifetime.
KEEP IT SIMPLE: Apply organized common sense when solving a problem or when doing an analysis of an opportunity. Think more and calculate less. Avoid false precision and unnecessary transaction costs. Try not to interrupt interest that is compounding. Focus on being a business analyst, not a macroeconomic forecaster. Pay attention to the business cycle, but don’t try to predict it.
ACCEPT CHANGE: Avoid master plans since change is the only constant in life. Adapt. Look for evidence that would dis-confirm your own ideas. Understand arguments from all sides. Face your problems.
THINK BROADLY: Use multiple models from many disciplines in doing an analysis. Borrow the great ideas of the best thinkers in every discipline. The antidote to man with a hammer syndrome is a full set of tools.
AVOID HUBRIS: Try to avoid fooling yourself, which is hard since it is easy to do. Understand that more of success in life is luck than you imagine.
KEEP LEARNING: Be a learning machine. Never stop reading. Be curious. Surround yourself with smart people. Set aside time to read and think.
Great Articles shared by all. Came across some articles giving updates on Private Funding and Amendments by SEBI in Takeover code in recent times and small update on macro view (less numbers) on the Real estate.
Absolutely stunning collection of FACTS that New York Times reported throughout 2018. A page to be bookmarked and read to learn, laugh aloud at and get amazed by.
A behind-the-scenes look at how Amazon rules work in protecting the consumer and how the system is gamed.
A very good piece on hyperinflation and how it has reared its head every few years across the globe and created social, economic and political havoc.
A peak into the new-age world of e-sports, video games as spectator sports.
More than 10 million people tuned in on streaming platforms like Twitch and legacy networks like ESPN, with a higher share of 18-to-34-year-olds than the Super Bowl or the NBA Finals.
It’s unclear what the popularity of e-sports among younger generations will mean for traditional pro sports. A 2017 study from Street & Smith’s Sports Business Journal found that the average age of a Major League Baseball TV viewer was 57, while the average ages for NFL, NHL, and NBA viewers were 50, 49, and 42, respectively. Meanwhile, nearly 63 percent of those playing Fortnite—the inescapable mobile game that’s made $1 billion since being released last autumn—fall within the coveted 18-to-24-year-old demographic.
Passion for the industry runs deeper in Asia, where gaming culture is more ingrained and American sports have less of a footing. South Korea recognized e-sports as a second-level Olympic sport in 2015, and this past August, e-sports made its debut at a major global athletic event with an exhibition during the Asian Games in Indonesia.
Companies are starting to bypass the Apple and Google appstore in how users discover, download and pay for their apps. Netflix has started this with iTunes and Spotify was quick to follow suit. It could be potentially disastrous for a company like Apple, whose so-called platform business can disappear very fast, leaving it as a hardware manufacturer of phones which people don’t care for any longer.
A great long read on the effect of operant conditioning on market participants.
Written by our own : @basumallick
Learnings from year when even Warren Buffett took big blows
Failure of value investing?
The company was trading for 1000 crores and had recieved a cash of 1550 crores. Simple value buying opportunity, right? But you should be most careful when the opportunity is too easily visible. There is always a catch. Like in this case, markets were predicting promoters intentions that even the best of investors could not forsee. Money is claimed to be siphoned off through write back of profit, loans to promoter entities. At present, a complaint is pending for forensic audit, so that siphoning of wealth can be proved
Missed the point. What happened to 1500 cr cash
Worth a look.