Great articles to read on the web

(Shan) #146

This is on the lines of Tao of Capital by Spitznagel. In these low IV, high PE days, I think it makes sense to have some tail hedges in place. I’m in particular enamored by the strategy of using vol arbitrage and funding tail hedges using that, as Spitznagel says in his book.

Edit: one more on tail risk hedging

(Subham) #147

Investing in the unknown and the unknownable:


(Peabody) #149

Thank you.What an insight

(Raj Panda) #150

Amidst all the confusion around GST, found this news coverage focusing on a very different aspect of anti-profiteering

Extract -
The new anti-profiteering rules imply that all savings must be passed on, including the benefit earned from input tax credit. What does this mean? At present, if a company was selling a product for Rs100 and it included indirect tax of Rs30, the net realization was Rs70. Under GST, if the tax comes to Rs30 and input tax credit is Rs10 then the net tax payable is Rs20. The government wants the new price of the product at Rs90 (Rs70 plus tax Rs20), implying a 10% reduction from the earlier price. Even a retention of Rs5 as savings will fall foul of this law, as it stands.

Now, companies never said they will retain all tax savings. For instance, a Hindustan Unilever Ltd investor presentation mentions that GST on soaps, toothpaste and detergent is lower than the current level. But the management said it intended to use savings in one category to offset increases elsewhere. That is, at the company level it would pass on net benefits due to GST.

The current anti-profiteering rules don’t offer that flexibility, simply saying any tax reduction in supply of goods and services must be passed on by a commensurate reduction in prices. More clarity will emerge when the National Anti-Profiteering Authority determines the methodology and procedure for taking up cases, said the finance head of an FMCG company who did not want to be identified. He said the spirit of the rules indicates that tax benefits have to be passed on and the government’s intention is to take on profiteering and not profit, which is essential for a business.

(Akbar Khan) #151

Many companies have been smart enough to already take price hikes in the previous quarter, so the benefits accrue to the company and net after passing on benefits of GST with respect to new price, the consumer will be paying the same amount or slightly higher as before.

(amit anam) #152

(Changu Mangu) #153

@amitanam Fabulous and well timed share. If Mr. Anonymous is reading this :blush: thank you for the common sense and fully agree.

(Value Seeker) #154

Thanks for sharing @amitanam. Loved the article especially the comment on Piramal :slight_smile: - echoed my thoughts on the same in the VP thread for PEL. @Marathondreams, @Prdnt_investor :wink:

(ashit) #155

Brand new animated treatment of Charlie Munger’s “The Psychology of Human Misjudgement talk” (link:… Watch/listen and learn.

(gautham1) #156

An explanation of market bubbles that doesn’t blame greed or incompetence, and a
strategy to protect yourself from their inevitability.
from morgen housel

(Alphin) #157

I am a great supporter of watching documntaries and videos as they deliver more of a punch and better recall.

Watching two documentaries

The corporation : on why a corporation is inhuman inaking decisions…

ENRON the smartest guys on the room : this is on corporate fraud.

(Shan) #158 I wish folks read and understand this before asking a contrarian investor about stocks. :slight_smile: As a contrarian value investor myself, I quite agree with this article. Unless one truly understands avoiding social proof and standing isolated away from the crowd, one can’t ‘get’ contrarian investing. If you need someone else to investigate a stock and then you’re going to agree or disagree with him/her you’ve already proved that you are not a contrarian. A contrarian investor doesn’t give a damn about your or anyone else’s opinion either so if you keep shouting about something, it’s not going to affect him/her one bit. A contrarian investor is essentially a loner (in the investing world), does his/her own analysis and would love for stocks to go down so that he/she can buy even more. And it’s very difficult for a contrarian investor to act in any other way. I say all this out of personal experience. :slight_smile:

(Aniket Gore) #159

The Big Lesson From Amazon And Whole Foods: Disruptive Competition Comes Out Of Nowhere

Vivek Wadhwa

June 22, 2017 5 min read

I doubt that Google and Microsoft ever worried about the prospect that a book retailer, Amazon, would come to lead one of their highest-growth markets: cloud services. And I doubt that Apple ever feared that Amazon’s Alexa would eat Apple’s Siri for lunch.

For that matter, the taxi industry couldn’t have imagined that a Silicon Valley startup would be its greatest threat, and AT&T and Verizon surely didn’t imagine that a social media company, Facebook could become a dominant player in mobile telecommunications.

But this is the new nature of disruption: disruptive competition comes out of nowhere. The incumbents aren’t ready for this and as a result, the vast majority of today’s leading companies will likely become what I call toast—in a decade or less.

Note the march of Amazon. First, it was bookstores, publishing and distribution; then cleaning supplies, electronics and assorted home goods.

Now Amazon is set to dominate all forms of retail as well as cloud services, electronic gadgetry and small-business lending.
And its proposed acquisition of Whole Foods sees Amazon literally breaking the barriers between the digital and physical realms.

This is the type of disruption we will see in almost every industry over the next decade, as technologies advance and converge and turn the incumbents into toast.
We have experienced the advances in our computing devices, with smartphones having greater computing power than yesterday’s supercomputers.
Now, every technology with a computing base is advancing on an exponential curve — including sensors, artificial intelligence, robotics, synthetic biology and 3-D printing.
And when technologies converge, they allow industries to encroach on one another.

Uber became a threat to the transportation industry by taking advantage of the advances in smartphones, GPS sensors, and networks.
Airbnb did the same to hotels by using these advancing technologies to connect people with lodging.
Netflix’s ability to use internet connectivity put Blockbuster out of business.
Facebook’s WhatsApp and Microsoft’s Skype helped decimate the costs of texting and roaming, causing an estimated $386 billion loss to telecommunications companies from 2012 to 2018.

Similarly, having proven the viability of electric vehicles, Tesla is building batteries and solar technologies that could shake up the global energy industry.

Now tech companies are building sensor devices that monitor health.
With artificial intelligence, these will be able to provide better analysis of medical data than doctors can.
Apple’s ResearchKit is gathering so much clinical-trial data that it could eventually upend the pharmaceutical industry by correlating the effectiveness and side effects of the medications we take.

As well, Google, Facebook, SpaceX, and Oneweb are in a race to provide Wi-Fi Internet access everywhere through drones, microsatellites and balloons.
At first, they will use the telecom companies to provide their services; then they will turn them into toast.
The motivation of the technology industry is, after all, to have everyone online all the time.
Their business models are to monetize data rather than to charge cell, data, or access fees. They will also end up disrupting electronic entertainment — and every other industry that deals with information.

The disruptions don’t happen within an industry, as business executives have been taught by gurus such as Clayton Christensen, author of management bible “The Innovator’s Dilemma”; rather, they come from where you would least expect them to.

Christensen postulated that companies tend to ignore the markets most susceptible to disruptive innovations because these markets usually have very tight profit margins or are too small, leading competitors to start off by providing lower-end products and then scale them up, or to go for niches in a market that the incumbent is ignoring. But the competition no longer comes from the lower end of a market; it comes from other, completely different, industries.

Because they have succeeded in the past, companies believe that they can succeed in the future, that old business models can support new products.
Large companies are usually organised into divisions and functional silos, each with its own product development, sales, marketing, customer support and finance functions.
Each division acts from self-interest and focuses on its own success; within a fortress that protects its ideas, it has its own leadership and culture.
And employees focus on the problems of their own divisions or departments — not on those of the company.
Too often, the divisions of a company consider their competitors to be the company’s other divisions; they can’t envisage new industries or see the threat from other industries.

This is why the majority of today’s leading companies are likely to go the way of Blockbuster, Motorola, Sears and Kodak, which were at the top of their game until their markets were disrupted, sending them toward oblivion.

Companies now have to be on a war footing. They need to learn about technology advances and see themselves as a technology startup in Silicon Valley would: as a juicy target for disruption.
They have to realise that the threat may arise in any industry, with any new technology.
Companies need all hands on board — with all divisions working together employing bold new thinking to find ways to reinvent themselves and defend themselves from the onslaught of new competition.

The choice that leaders face is to disrupt themselves — or to be disrupted.

(Abhishek Basumallick) #160

A very good read… Jason Zweig interviews Peter Bernstein.

(Abhishek Basumallick) #161

Ray Dalio on the global economy

(Ravichand) #162

Thanks Shan. Feel honored that an article I wrote is posted in this esteemed Forum. An analogy i can think of for Contrarian investing is that of a “Knife”. In the hands of a skillful surgeon, a knife becomes a very useful tool to provide well-being / joy and in the hands of a toddler it can cause great harm / pain. Similarly, Contrarian investing when practiced by a skillful investor backed by solid facts can be a useful strategy for wealth creation. When practiced by (newbie) investors without backing of sound logic and reasoning, it may become a strategy for wealth destruction!!!

PS: New member here. Kindly excuse if commenting on own article is against forum guidelines.

(Subham) #163

How loopholes in GST can be exploited…

(Kritesh Abhishek) #164

Inspiring journey of few most successful stock market Investors in India.

(ashit) #165

New memo by Howard marks
There They Go Again…Again