The People’s representatives GAME.PLAY or the FOUL PLAY… excellent article
https://peoplesdemocracy.in/content/disinvestment-hzlcong-bjp-helping-poor-vedanta-tide-over-its-debt-problems
In the US, Amazon seems to be acquiring shutdown malls in cities. They are converting them to fulfilment centres.
On Constellation Software and Mark Leonard.
Interesting story of finvasia.
https://www.bloomberg.com/quicktake/tax-inversion
A good article on what Inversion is and why cos do it. Pfizer after being a US company for more than 150 years suddenly in 2015 proposed to become Irish.
Burger King is Canadian after 3G and Berkshire formed a Canadian parent that owns it.
in 2015 Apple also inverted the IP part of its business - the largest inversion in history
A very well written account of why in an ultramarathon - women have a very slight edge over men in fatigue resistance, allowing them to decimate the male competition. The article also touches upon gender discrimination in marathons which now no longer exists. More power to health
A very thoughtful and absolutely practically written piece on 5 levels of an investors evolution
Some extracts resonated with me and helped me frame where i place myself.
Level 4 investors seem, at one moment, to focus on the businesses themselves, then switch perspectives the next moment to see the business as a “stock,” then switch again to identify the moments in time when one factor is driving the entire stock market.
I see this “open-minded with a point of view” mindset reflected in the way someone grips his or her investment ideas or strategies. Lower level investors are sometimes surprisingly definitive in the way they describe an investment opportunity; they have a too tight grip.
"Good investment management comes from a mindset reflecting the assumption that the manager will be investing for decades, but that investment activity is as a series of sprints and recoveries rather than one extended marathon. As Lenin once said: “There are decades where nothing happens; and there are weeks where decades happen.”
Best
Bheeshma
There is this idea that old businesses can be easily remade into digital upstarts, if managers throw enough money at the process.
But that’s not really true. Just look at General Motors .
GM is shutting down its ride-sharing business Maven across major cities in the US. Building software business takes a lot of hardwork. You cannot just throw people and money at it and hope to succeed.
The CRT or the Cognitive reflection test is a test designed by Dr Shane Frederick, a well known professor in Behavioral Economics. You can read more about him at https://som.yale.edu/faculty/shane-frederick
The test consists of 3 simple questions and before reading the rest of the post I request you guys to go ahead and take this test. The last question Q4 is mine so kindly answer that too!
[1] A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?
- 10 cents
- 20 cents
- 15 cents
- 5 cents
- 2.5 cents
0 voters
[2] If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?
- 50 minutes
- 25 minutes
- 58 minutes
- 100 minutes
- 5 minutes
0 voters
- [3] In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?*
- 36 days
- 24 days
- 37 days
- 35 days
- 47 days
0 voters
[4] What is the single most important thing in your stock picks?
- Strong technical chart
- Low Valuations
- Blue Chip/Market Leader/Good Balance sheet
- Buy at Cyclical Low
- Rapid Growth in Earnings/Sales/Cash Flows
- Strong Management
0 voters
The CRT was designed to test which system people are predisposed to use - System1 or System 2. The test was administered to students from prestigious universities like MIT, Harvard, Princeton etc and you can find the results of these tests here (scroll to page 29) - https://law.yale.edu/system/files/area/workshop/leo/document/Frederick_CognitiveReflectionandDecisionMaking.pdf
The above paper is a good read and throws some additional insight into how people generally make decisions
Best
Bheeshma
Very interesting, thank you for this. My observation is that most decisions are taken only looking at the immediate effects and completely ignoring the second order or higher order effects (“consequences of consequences”).
Another major behavioural (and probably the most important, in my opinion) fallacy is to judge a decision depending on its outcome, rather than the process by which the decision is made.
What behavioral scientists like Dr Shane are trying to point out is that deliberate thinking or intentionally slowing down your thought process can help you recognize and hopefully avoid some of the pitfalls. This is echoed in the idea of having a Checklist - which forces you to go through a process despite what your animal instincts.
On the poll per se, the question of interest is Q4 or which is the single most important thing in your stock picks and the results are
Quite clearly, for 1/3rd of the people who voted, capable & able mgt is top priority followed by growth - roughly 6 out of 10 ppl choose either of this.
the top 3 account for ~80% of all stock pick considerations. Perhaps time to look at the bottom 3? After all - they are out of favour
This is an article about the Dunning Kruger effect authored by David Dunning. Its a long read but in my view well worth the time spent on it.
In a nutshell this effect pertains to how incompetent people are even more confident compared to their competent counterparts and overestimate their abilities by a significant margin. Paradoxically when these incompetent people are given information to plug their knowledge gap, they defend their erroneous views even more strongly
Since the very knowledge that they dont possess is required for them to recognize what they dont know - it leads to a mental trap where they just see how wrong they are.
Eloquently described by Mr Jaitley, heres what he had to say -
Stating that dynasties impose leaders, Jaitley said these leaders don’t become great greatness is thrust on them. “There is little place for men of high calibre in dynastic parties. An insecure leader is scared of the shadow of more talented people,” Jaitley said.
Some of such leaders suffer from what psychologists now regard as the ‘Dunning-Kruger effect’, he said.
“Those who suffer from this effect have a bias of illusory superiority which comes from the inability of low-ability people to recognise their lack of ability. Without the self-awareness of their limitations, such low ability people cannot objectively evaluate their own competence or incompetence,” he added.
This, Jaitley said, leads to their miscalculation in their assessment of the calibre of highly incompetent ones. “They suggest that poor performers are not in a position to recognise their shortcomings and consequently are insecure and biased against the more competent ones.”
The Dunning Kruger effect is a very well known bias in behavioral sciences. One can access their original paper at http://www.avaresearch.com/files/UnskilledAndUnawareOfIt.pdf
Best
Bheeshma
People source their confidences from various places …job, success, value system ,respect, supporters…money is a big ego massager. Ability to make money on your own trumps everything. Varies from person to person as to where he stands in society, his ambitions and ability to convert his goals. Knowledge gaps can be filled by outsourcing w hat u do not know so no need to know everything and get confused. Focus and be best in whatever field you are passionate about Measure u r self against the best.
Latest memo from Howard Marks and it’s titled em… This time it’s different 
Hilarious article on selling and upon further reflection - quite true
There are no asset managers who represent their strategy to clients as “We buy the most expensive assets, and add to them as they rise in price and valuation.” That’s unfortunate, because this is the only strategy that could have possibly enabled an asset manager to outperform in the modern era. It’s one of those things you could never advertise, but had you done it, you’d have beaten everyone over the ten-year period since the market’s generational low.