Multi-Disciplinary Reading - Book Reviews

Malhar_Manek · February 11, 2024, 2:39am

For anyone trying to understand macro investing (especially the idea of changing world orders), the legendary Jim Rogers’ book “Street Smarts” is a wonderful read. My key notes below.

Currency black markets are a gold mine for the macro investor. The % premium in the black market over the official rate is a key metric.
The ease with which one can cross borders – is the process efficient or saddled with bureaucracy – is another key observation to make. The presence and quality of traffic signals, highways, roads etc. can be insightful too. (He invested in Botswana on this basis!)
There are cycles throughout history between periods where financiers are prominent, v/s those dominated by real good producers (farmers, manufacturers, miners etc.) Wall Street and finance have dominated in recent decades but are now on a decline.
19th century belonged to London. 20th century belonged to New York. 21st century belongs to Asia.
Cost of an Ivy League education is a bubble, in his opinion, which leads to massive student debt. Education loans can’t be written off under US bankruptcy laws.
Another problem is tenure, where professors are guaranteed employment for life. This is irreversible and prevents error-correction.

Overall, a wonderful read on world orders and macro investing from one of its greatest practitioners. Doubles as a mini-biography of Mr Rogers too! 9/10

Mudit.Kushalvardhan · February 11, 2024, 4:38pm

Wow…very nice…how did u get the autographed copy…??

saikathalder · February 22, 2024, 9:29am

thank you for the great review & summary.

Malhar_Manek · March 10, 2024, 6:23am

Zero To One masquerades as a business/investing book, but I think it is a deeply profound tome. My notes below.

Peter Thiel famously asks potential employees what he calls the contrarian question: What important truth do very few people agree with you on?

Good answers to the contrarian question are the closest we can come to looking into the future.

Monopoly and perfect competition are simplified economic models for market structures. But most firms are much closer to one extreme or the other than we perceive.

It is true that monopoly is evil – in a static world. In a dynamic world, the incentive of monopoly profits enables long-term planning, creative thinking, and innovation.

When Thiel ran some projections in 2001, he realised that 75% of PayPal’s value would come from cash flows generated after 2011. Terminal value stems from growth and durability: the latter is underrated.

While most analysts focus on short-term growth, the more important question to ask is, ‘will this firm be around 10 years from now?’ The best answers to this question arise not by crunching numbers but through an understanding of intangibles – especially enduring intangibles like people and culture.

Key drivers of monopoly:
1 Proprietary technology that is 10x better
2 Network effects
3 Scalability, especially at low marginal cost of replication
4 Branding built on underlying substance

Throughout history, people’s views of the future have been either definite (concrete) or indefinite (uncertain) and either optimistic or pessimistic.

Definite optimism, often dominated by STEM, is the most potent combination for progress. It entails envisioning a future, then building it – e.g. Apollo mission to the moon

Pessimism of both forms – definite and indefinite – often turns into a self-fulfilling prophecy: one expects the future to be worse than the present and then either finds ways of dealing with it (definite) or accepts it as it unfolds (indefinite)

Indefinite optimism (happy-go-lucky), often characterised by finance and law, is the most dangerous. It is inherently unattainable: how can the future be better if nobody works towards building it?

There are many secrets yet to be discovered. The ‘low hanging fruit has already been plucked’ theory is a bad explanation. Secrets reveal themselves to relentless searchers, e.g. Andrew Wiles proved Fermat’s last theorem after working on it for 9 years.

Thiel has found anecdotally that the lower the salary taken by founders/CEO, the better the startup does.

What is your answer to the contrarian question? Comment below!

phreakv6 · March 16, 2024, 5:51am

The Attention Merchants, Tim Wu, 2016 - From newspapers, posters, loudspeakers, radio, tv, magazines, internet - blogs, clickbait, viral content, social networks and smartphones, the book covers how our attention has been captured over the last 100 years - captured only to be resold. So the book is equal parts about advertising industry as well and how it has evolved alongside these technologies. I found it just as good as ‘Confessions of an advertising man’ by Ogilvy on that topic.

My notes -

Corporate advertising in schools ensures warm association is established with Coca-cola and McDonald’s at an early age by EFP (Education Funding Partners - like ad-supported education?).
The attention industry has gained more and more of our waking moments in exchange for conveniences and diversions
Mass attention was first harvested for British war propaganda but today advertising industry has leveraged it to become a major part of the economy
Our life experience will be equal to what we paid attention to, whether by choice or default
Benjamin Day in the 1830s to compete with established newspapers of the day which had circulation of 2600 in a city of 300k (newspaper was a luxury item at 6c/day), devised a clever strategy of reselling the attention of his audience - by offering the paper for below cost of production at a penny a day and finding advertisers (’New York Sun’ was thus born).
‘New York Sun’ found its best stories in police court with its dismal parade of wife beaters, drunkards, petty thieves and prostitutes. The lurid and comic material was exactly what his readership wanted - stories from which no one could look away
Competition to New York Sun soon arrived with ‘The Herald’ which had a penchant for reporting violent death - suicides, murders, fires and accidents. It also started to insult rival newspapers and their editors (trolling in the 1830s!). NYS also invented fake news when it spoke at length of discoveries of life on the moon
Gaining and holding attention so as to resell it is a race to the bottom towards garish and lurid content - of death and violence, trolling and fake news that is more likely to engage our automatic attention vs controlled attention
The invention of posters that attracted the attention of passersby in the 1860s in Paris were the second milestone in industrialised harvesting of attention. Posters were soon everywhere until the anti-poster movement began to lobby and impose restrictions on where these ads could be placed (aesthetics) and to impose taxes.
Every time your eye catches a poster (or a hoarding, or a billboard), your awareness or perhaps something more has been appropriated without consent, if only for a moment
Clark Stanley’s Snake Oil Liniment, a patent medicine - was sold by Clark Stanley with startling images and evocative words (like in the Parisian posters) - it used its head as branding for trustworthiness - something Quaker Oats and Aunt Jemima (and Vasant & Co) use to this day
Patent medicine ads soon took off and promised a cure for everything - from rheumatism, neuralgia, toothache, sprains etc. - some even promised immortality. There was usually a “secret ingredient”, something we fall for even today - like the “Air” in Nike shoes or gold-plating in audio cables or triple reverse osmosis in water filters
Clark Stanley’s snake oil was advertised through roadshows and newspapers but later ones like Dr.Shoop through direct mail advertising (Spam)
Hopkins who sold Dr.Shoop carried the idea to ‘Liquozone’ - or liquid ozone which could cure dandruff, malaria, anthrax, diphtheria and even cancer and even pioneered the idea of “free sample”
Only after a muckraker picked up patent medicine and exposed their uselessness, Roosevelt passed the Foods and Drugs Act (and FDA as we know it today was born), criminalising false claims - thus snake oil went from being a cure-all to being a byword for fraud
Propaganda arose from the church (propagating the faith). The British war propaganda used posters during WW-I for mass recruitment of soldiers, proceeded to aggressive open-air propaganda (with megaphones) and fleet of cine-motor vans (precursor to the drive-in movie). America later took this and amped it up even further and “manufactured consent”
People used stereotypes to dumb down the complexities of the world. Something that will be used by war propaganda to propagate views that fostered or weakened them
Intellectuals who read everything and think themselves immune to propaganda are in fact the easiest to manipulate (because all information fostered or weakened beliefs)
Bernays, Freud’s nephew, the father of public relations (self-described), believed that a conscious and intelligent manipulation of the habits and opinions of the masses was an important element to democratic society (something all democratic nations still follow). British and American war propaganda post WW-I inspired Adolf Hitler to take it to the next level
Scientific advertising - create desire for products (demand engineering), create loyalty by creating an impression that something truly set them apart (branding), targeted advertisements
Demand Engineering - involved creating problems were there were none to sell mouthwash and toothpaste (Halitosis makes you unpopular campaign). Halitosis was an unheard of word before Listerine introduced it (Freud influenced lot of early advertising)
Imbuing products with traits customers can identify with started with floor cleaners targeted at women - establishing a nexus between product and customer (Bernays cleverly engineered demand for cigarettes among women by appealing to feminists to smoke and be like men)
Women hired as “Lady Persuaders” did more harm than good by selling beauty products like Pond’s cold cream and Pears soap that tended to reinforce condescending biases that they spent years as activists to try and undo
Consumers buy not what they freely want but what they are made to want
Amos and Andy in 1929 was the first hit serial (radio) - the show people refused to miss, arranging their time around it - show reached 50 million in a population of 122m!! (was sponsored by Pepsodent). Thus was born the first “prime time” show
Soap operas were started to colonise the day-time hours because a great deal of selling could be done in the story itself by appealing to women’s instinct of self-preservation, sex, and family instinct
Prime time shows were a massive ritual of collective attention, shared awareness and even shared identity (only God and country before could elicit something similar)
CBS beat NBC in the syndication game - it offered full programming for free and also paid its affiliates on the sole condition that they carry and run it unaltered (same model as New York Sun providing paper for free to get eyeballs)
A continuous diet of pure sensational wears audiences out and makes them seek respose (NYT and WSJ thus arose as contempt for NYS and The Herald arose). Too little advertising and business can’t grow, too much and the listener grows resentful and tunes out
Nielson installed their “black box” in people’s homes so it could figure out what people were tuning into (modern ratings thus born)
Goebbels, chief propagandist of Nazi party used German radio to create a nation with one public opinion. Radio and loudspeakers deprived 80 million people of independent thought and subjected them to the will of one man
In WW-I German war propaganda jumped to discuss merits of complex issues while American and British propaganda was purely reductive messages and vivid imagery. Hitler figured this out and asks in Mein Kampf, “Who should propaganda appeal to? To the scientific intelligentsia or to the less educated masses? Forever only to the masses” (Hitler worked in advertising)
Hitler realised repetition of simple ideas worked best - Nuance was nonsense and complexity was risk - effective propaganda must limit itself to few points and use them like slogans until the last standing man grasped it
What audience most wants is an excuse to experience fully the powerful feelings already lurking in them which their better selves suppress
Hitler perfected his performance method - his speeches began with long silence, broken by a soft, almost intimate tone of pain and vulnerability, describing his service and despair for current affairs. In bridge section he would assign blame with rising fury, denounce all that was wrong and finished by bellowing intense hatred for Jews, plans for renewed greatness and calling for German unity (hilariously imitated by Chaplin in The Great Dictator)
Crowd psychology - loss of individual responsibility makes individual in a crowd very malleable (easily influenced)
Joint attention - when in a group brain’s faculties work differently. Two people solve a problem faster than one in isolation. Infant learns this when it follows parent’s gaze to pay attention to what they are looking at
Freedom is not just in choosing options but also in what options are provided for you - A lot of restrictions to freedom happens in the latter than former - we don’t know what’s not there. If you don’t want people to choose Chocolate, don’t offer it as an option than to provide it and restrict it
Choice maybe the cornerstone of individual freedom but humanity’s urge to surrender to something larger and to transcend the self is just as big. Propagandists and advertisers know this.
Elvis Presley on Ed Sullivan Show in 1956 had 82.6% of the population tuning in - unsurpassed till today
Unique selling proposition or “reason why” advertising worked best for medicines (Anacin pain relief with hammering on head and ‘fast relief’)
Radio shows were sponsored by single sponsor (Like Pepsodent’s Amos and Andy) but innovation in TV gave rise to slots that could be sold to different advertisers (taking inspiration from magazines). Networks soon started to consider its audience as “inventory” measured using metrics like GRP
To be home and awake was, to most Americans, to be sold something (with network television). The remote control is the first known ad blocker as it allowed you to mute the set
To take control of one’s media consumption was to take control of one’s destiny
Coke had phenomenally low “brand elasticity” (unwillingness to substitute with Pepsi). Pepsi started as “Brad’s drink” and was a medicine for dyspepsia or indigestion. Instead of marketing its inherent qualities, it was chosen to focus on people who bought it - thus the Pepsi generation was not consuming cola but an image of themselves
Desire’s most natural endpoint is consumption
PRIZM - Potential Ratings in ZIP Markets - the earliest known targeting system based on geographic clusters. It allowed advertisers to say different things to different people and win them all (It became important to know more about the Consumer)
PRIZM led to more targeted channels like MTV and caused Audience fragmentation to focus on targeted ads. Channel surfing ensued as a result of the fragmentation leading to “grazing” or a scattered habit of viewing. Ads were now skippable through changing channel or fast-forward button on the VCR causing problems to advertisers (limited no. of eyeballs). The channel surfer though now had the mind of a new born or a reptile
Operant conditioning - some actions are reinforced by positive consequences (checking email in the 90s). Variable reinforcement - you can’t say whether you will be rewarded or not and by how much. Consistently rewarded behaviour is prone to extinction
In 1982, Space Invaders game was the highest grossing entertainment product in the US. It was like drugs ($4 a day habit) - it earned $2b, a quarter at a time (arcade game). Challenging to the point of utter frustration, most couldn’t last more than a minute. Donkey Kong and PacMan and several others followed.
Driver of all technological advance is sex or warfare (Internet)
By mid 90s, 50% of CDs sold had a AOL logo on them. AOL was signing up subscribers at the rate of 1 every 6 seconds. By ‘95 AOL had 4m subs by ‘97 12m. By ‘96 from charging $19.95 a month for 20 hours and $2.95/hr after that, it made it unlimited at $19.95/mo in ‘96 bringing in millions of new users. AOL mcap was $160b vs GM’s $56b
The impulse to idolise has not faded in our secular age, only gone seeking after strange gods (Craving for humanity to be connected with the extraordinary)
Time magazine’s emphasis on news told through stories about people gave rise to the concept of the modern celebrity (followed by People magazine)
Celebrities now willingly discussed personal lives that was previous guarded. Fame was not just a by-product but professional capital
Oprah took complete ownership of her show and sold it to the networks. Show practised a emotional, confessional style and moral accountability. Talk show a group therapy session - borrowed heavily from organised religion. Had commerce unabashedly in the center through product placements and recommendations (Oprah model)
MTV got its content (music videos) for free and made money from nothing. However disenchantment started showing and to reinvent itself, started the concept of reality TV - talent shows, documentary soap. These were cheap to produce and just as good in getting eyeballs (Shark Tank, Real Housewives, Kardashians, The Deadliest Catch etc)
Microsoft wanted to make the Internet more like the TV when it channeled money into MSNBC (flopped except for Slate mag)
Google in early days felt advertising funded search engines will be biased towards them and wanted to keep them out but eventually gave in but left a lot of attention on the table by showing only relevant ads at right moments only through AdWords and become the most profitable Attention merchant in the world
With the emergence of Weblog (or blog), for the first time so many people had a chance to know what others were thinking on a wide range of subjects
YouTube democratised speech further where everybody could now be a speaker and an audience
In our post-scarcity world, distribution is not king and neither is content. Conversation is kingdom and trust is king (Jeff Jarvis)
Peretti pioneered ‘going viral’. A contagious media product should represent simplest form of the idea (payload). Fancy design and extraneous content made it less contagious by being a drag on the payload
HuffingtonPost pioneered clickbait - content that seemed to take control of the mind, causing hand to involuntarily click
Social networks led to people making an augmented representation of themselves - not as they were but at their contrived best. Once MySpace, Orkut and Friendster collapsed, Facebook was the last man standing. Facebook made 1/10th of Google’s ad revenue because latter’s users were close to making a purchase. Like buttons and tracking cookies allowed Facebook to do retargeting
Like renters improving landlord’s property, people who wrote blogs moved onto Facebook to curate their images even as they were made to look at ads
If celebrities were A-list, B-list and C-list. Internet gave rise to the D-list or the microfamous
Fame or hunger for it would become a pandemic leaving them with chronic attention-whoredom as instagram invented the selfie
The best minds of our generation are thinking about how to make people click ads. Your time is scarce and your technologies know it (time on site, video views, pageviews metrics)
Netflix decided to forego advertising and was somehow able to make people sit for longer hours watching content and even invented binge watch giving rise to comeback of long-form content (hyperserial, or a long movie like Breaking Bad)
An iPhone that blocks tracking buries all the business models that have been prevalent since early 2000
The closer a technology feels to being a part of us, the more important that we trust it (say like VR)
Trump wanted to dominate media coverage, no matter the cost because all publicity is good publicity and turned the presidency into ratings monster by waging war every week against someone new in an episodic structure. He may win or lose but wins the attention contest (like British war propaganda)
Most vital human resource in need of conservation and protection will be our own consciousness and mental space and we must not part with it cheaply

I like books that cover history of a space (recently read ‘Ten Drugs’ which does something similar for medicine) as you get transported across time and meet characters, events and regulations that shaped an industry over time organically. Tracking things this way gives us an idea of the trajectory of where things are headed. I totally enjoyed this book and would highly recommend a read. 10/10

phreakv6 · March 19, 2024, 7:01am

The Tao of Physics, Fritjof Capra, 1975 - Science or spirituality, our curiosity is always interested in the deeper nature of reality. This book tries to overcome the gap between rational, analytical thinking and the meditative experience of mystical truth. It refers to Greek natural science, Western science and philosophy, Eastern religious thought and mysticism, mainly from Hinduism, Confucianism, Taoism, Zen and Buddhism. This book took a lot out of me while reading (while also giving me back a lot) and took even more out of me while penning these notes

My notes -

Culture has consistently favoured yang or masculine, over yin, or feminine counterparts. Self-assertion over integration, analysis over synthesis, rational knowledge over intuitive wisdom, science over religion, competition over cooperation, expansion over conservation
Greek philosophy in the 6th century BC did not have science, philosophy and religion separated from each other. Physics in fact meant seeing the essential nature of all things
Early Milesians (hylozoists) felt that matter was alive and so no difference between animate and inanimate, spirit and matter
Anaximander saw the universe as an organism supported by pneuma (the cosmic breath), in the same way human body was, by air
Division between spirit and matter took hold later and bifurcated philosophy (spirit) and science (matter)
Descartes bifurcation of mind (res cogitans) and matter (res extensa) laid the seeds for the blooming of science as this ‘Cartesian’ division allowed scientists to treat matter as dead and separate from themselves
Newtonian model of the universe started dominating scientific thought in the 17th century and the laws exposed by Newton were seen as laws of God
‘Cogito ergo sum’ - I think, therefore I exist (Descartes) led people to equate their mind with their identity instead of the whole organism - people saw themselves as isolated egos existing ‘inside’ their bodies thus alienating themselves from nature and fellow human beings
Western world view is thus ‘mechanistic’ (the science and technology the Cartesian division enabled to flourish) while Eastern view is ‘organic’ (All things and events perceived by the senses are interrelated and connected. Our tendency to divide the perceived world into individual and separate things and ourselves as isolated egos is an illusion due to our measuring and categorising mentality - ‘avidya’ or ignorance in Buddhist philosophy)
The multiplicity perceived (me and the world) is a state of a disturbed mind and when mind is quieted, the multiplicity disappears (Buddhist philosophy). Transcending this notion to identify themselves with the ultimate reality is enlightenment (Taoism)
In intrinsically dynamic Eastern world view, time and change are essential features and cosmos is one inseparable reality - forever in motion, alive, organic, spiritual and material at the same time
Forces that cause motion are not extrinsic as in classical Greek view (and Newtonian view) but an intrinsic property of matter in Eastern view. Thus Eastern religions don’t see God as ruling and directing the world from above but as a principle that controls everything from within
The modern physicist, like the Eastern mystic has come to see the world as inseparable, interacting, with the observer being integral part of the system
Two kinds of knowledge, or two modes of consciousness - rational and intuitive typically associated with science and religion. ‘Upanishads’ call this higher and lower knowledge with lower associated with the sciences and higher with religious awareness. Buddhists talk of ‘relative’ and ‘absolute’ knowledge. ‘conditional truth’ and ‘trascendental truth’ (yin and yang in Chinese though) - gave birth to confucianism and taoism in China
With its intellectual map of reality in which things are reduced to their general outlines, rational knowledge is a system of abstract concepts and symbols, expressed in linear, sequential structure in line with our “linear” thought (like this sentence)
The natural world is not regular (no straight lines or perfect shapes) and things dont happen in sequences but all together and even empty space is curved
Rational thought can thus only approximate reality and all rational knowledge limited (reason why science keeps patching itself up with new discoveries). We never know beforehand where the limitations of the theory lie. Thus Classical mechanics limitations ( only for larger objects and speeds much lower than light) were found in 20th century and gave rise to quantum physics (sub-atomic matter) and relativity (speeds closer to light)
Every word or concept, clear as though it may seem to be, has limited range of applicability (Heisenberg)
Our representation of reality is lot more easier to grasp than the underlying reality, we confuse the two and take our concepts and symbols for reality (mistaking map for territory)
Absolute knowledge does not rely on discriminations, abstractions and classifications of the intellect. It can thus be definition, never be described by words and arose only in an non-ordinary state of consciousness, in a meditative or mystical state (Buddhism)
“There the eye goes not, speech goes not, nor the mind. We know not, we understand not, How one would teach it” (Upanishads)
While science takes pride in basing theories firmly on experiment (scientific method), it is complimented by intuition that provides the sudden clarifying insights which gives joy and delight to scientific research
In Eastern view, mathematics with its symbols and structure is a conceptual map and not a feature of reality itself (Interestingly have a book called ‘Our mathematical universe’ which claims everything is mathematics)
In Hindu Vedanta and Buddhist Madhyamika are highly intellectual schools, whereas Taoists have deep distrust for reason and logic. Zen grew out of Buddhism and strongly influenced by Taoism and prides for being ‘without words, explanations, instructions or knowledge’
‘The instant you speak about a thing, you miss the mark’ (Zen saying)
To silence the thinking mind and to shift awareness from the rational to the intuitive mode of consciousness - meditation by concentrating attention on breathing, or chanting or a mandala or through bodily movement in yoga or T’ai Chi. These are not learned by verbal instruction but by ‘doing’ in unison with the teacher (Japanese tea ceremonies, Chinese calligraphy). In intuitive mode, the environment is experienced in a direct way without conceptual filters
The meditative state is similar to the mind of a warrior in awareness - and thus plays an important role in the spiritual and cultural life of the East (Bhagavad Gita with its battlefield and influence of Zen on samurai which gave rise to bushido, or the way of the warrior)
Mystics are mainly interested in experience of reality, rather than the description of the experience. To deal with the problem, everyday factual language is replaced by mythical language which is not bounded by logic and common sense with its magic and paradoxical situations and suggestive images
Taoists frequently used paradoxes to highlight the limitations of language (taken to extremes with Zen koans). Zen masters only used concise poetry about nature which inspired haiku in the Japanese
Shiva’s cosmic dance or physicist’s quantum field theory are creations of the mind that describe their intuition of reality
Our common language is inadequate to describe quantum theory and relativity theory which is why we resort to crutches like how light is both a wave and particle, caused by nothing but limitations of language
“What was your original face - the one you had before your parents gave birth to you” (Zen koan).Riddles like these are how Zen school transmits its teachings. The student has to find the answers for these on their own. Nature just provides riddles
What we see or hear is not the phenomena themselves but always their consequences (an audible click of a Geiger counter or a dark spot in a photographic plate). The subatomic world lies beyond our sensory perception (and thus our language). Thus physicists are dealing with what nonsensory aspects of reality and its paradoxes, much like the mystics
Profound changes were needed in understanding of space, time, matter, object, cause and effect with discoveries of modern physics - unlike Newtonian notion of matter (points of mass) and time (flows uniformly, disconnected from space) and forces and utter deterministic nature of reality if all forces and positions were known (with the Cartesian division between observer and the observed)
Faraday and Maxwell’s study of electromagnetism was the first to go beyond Newtonian physics because these fields existed in space and caused the potential of producing a force on a particle which was present in it - physical entities in their own right which could travel through empty space and could not be explained mechanically
Realisation that mass is nothing but a form of energy and that space is not three-dimensional and time is not a separate entity but something that was an inherent property of the space-time continuum (you cannot talk of time without space and vice-versa) and Euclidean geometry doesn’t apply to reality with its curved space and that curvature itself is caused by gravitational field of massive bodies upended classical mechanics
Radioactivity showed that while emitting various types of radiation, atoms were also transforming themselves into atoms of different substances which meant indivisibility of atoms or the fundamental nature of it being a building block had to be chucked (but we still keep finding and naming elementary sub-atomic particles by the hundreds)
If the size of the atom was the dome of St. Peter’s cathedral, the nucleus would be a grain of salt. The planetary model of atom had to be thrown out as electrons weren’t particles but waves with tendencies to exist - the waves themselves were not like water waves but probability waves and the field equations of quantum theory more like koans with its paradoxes
With so much empty space in each atom, what makes a solid a solid? The electrons are whirring around the nucleus at 600 miles/sec appearing almost like a rigid sphere
The electron waves, like standing waves in a vibrating string can only take certain well-defined shapes which is what gives definition to orbits and explains excitation of electron to higher orbits when it absorbs a photon or descent into lower orbit when emitting radiation (and the quantum of energy it absorbs or emits, quanta - which again translates to specific wavelengths of light)
Because particles in the nucleus are confined in very small space and move at speeds closer to speed of light, a full understanding of it has to incorporate quantum theory (due to extreme smallness) and relativity theory (due to high velocity).
Because matter is simply energy, when we collide particles at high energy, we dont see particles break into its constituent pieces but rather create new particles out of the process as energy transforms into what we observe as particles - thus while trying to divide matter into smaller and smaller pieces we end up creating particles - thus matter is destructible and indestructible at the same time (particle physics is thus also called high energy physics)
In Hinduism, connection between philosophy and religion is very strong (As in the Gita), thus all thought in India is in a sense religious thought and thus influenced its intellectual, social and cultural life. Hinduism cannot be called a philosophy, nor as a well defined religion (so beautifully put!)
The multitude of things and events around us are different manifestations of the same reality, called Brahman, which gives Hinduism its monistic character despite numerous gods and goddesses for various aspects of the divine but reflecting one ultimate reality
The manifestation of the Brahman in the individual is Atman and reflection the ultimate and the individual reality but are in essence one (Upanishads). God becomes the world which in the end becomes God again (the play of God, or lila)
Maya is confusing the forms of the divine lila with reality, without perceiving the unity of Brahman underlying these forms (Maya doesn’t mean world is an illusion but that the illusion merely lies in our perception - illusion of taking concepts for reality, of confusing map with territory)
Karma is the force of creation wherefrom all things have their life (Gita) although in western literature has taken a more psychological sense than a cosmic sense it was intended for. Under the spell of Maya, we think we are separated from the environment and are thus bound by karma. Being free from bonds of karma is to realize the unity and harmony of all nature
To realize that all phenomena we experience are part of the same reality and everything including own self is Brahman is to experience moksha, the very essence of Hinduism. There are many ways to attain Moksha, some even contradictory to each other (in the realm of concepts), from which rises the tolerance and inclusivity of Hinduism
Vedanta which is based on the Upanishads, being the most intellectual school, emphasises Brahman as nonpersonal, metaphysical concept, free from mythological content and recommends meditation and yoga to bring about the union with the Brahman
Shiva is one of the oldest Gods and assumes many forms - Maheshvara personifying the fullness of Brahman. Nataraja as the god of creation and destruction sustaining through his dance the endless rhythm of the universe. Shakti, through her many forms representing the female energy of the universe. Vishnu through many guises as the preserver of the universe.
The body being integral part of the human being unseparated from the spirit meant sensuous pleasure was never suppressed in Hinduism (Tantrism, in which each is both, enlightenment is sought through sensual love)
6th century BC was extraordinary period that saw birth of several spiritual and philosophical geniuses - from Confucius and Lao Tzu in China, Zarathustra in Persia, Pythagoras and Heraclitus in Greece and Siddhartha Gautama in India
Buddha was not interested in the origin of the world or the nature of the divine but instead solely on the human beings, with their sufferings and frustrations
After Buddha’s death, Buddhism split into two sects, Hinayana (or small vehicle, was orthodox and stuck close to Buddha’s teaching, consummated as suttas, in the Pali canon in 1st century AD) and Mahayana (or Greater vehicle, was more flexible and stuck to the spirit of his teaching, consummated as sutras in 3rd century AD, in sanskrit). Former spread to Ceylon, Burma and Thailand and latter to Nepal, Tibet, China and Japan. In India, it was assimilated into Hinduism when Buddha was adopted as reincarnation of Vishnu
First Noble Truth of Buddhism - dhukha or suffering arose from not realising the transitory and impermanent form of nature. Flow and change are basic tenets of nature
Second Noble Truth - trishna or clinging or grasping onto life based on wrong point of view, avidya, or ignorance. Perceiving fluid forms of reality in fixed categories create by the mind. The vicious circle, or samsara, the round of birth and death, driven by karma leads to never-ending cycle of cause and effect
Third Noble Truth - Suffering and frustration could be ended transcending the vicious circle of samsara, to free oneself of the bondage of karma, to reach total liberation or nirvana (not very different from early Hinduism)
Fourth Noble Truth - Has prescription to end all suffering through right seeing and right knowing and right action with right awareness and right meditation with direct mystical experience of reality (Known as the Eightfold path of self-development)
Confucianism was emphasised in kids to learn rules and conventions of society and Taoism by older people to regain and develop the original spontaneity destroyed by social conventions (Both were prevalent for 2000 yrs when Buddhism came in 1st century AD)
Tao, the ultimate undefinable reality of Taoism wasnt much different from Brahman of Hinduism and Dharmakaya of Buddhism
Whenever a situation develops to its extreme, its bound to turn around and become opposite. Avoid excess, extravagance and indulgence (Lao Tzu). Go further and further east and you end up west. Accumulate more money and end up poor. Increase standard of living and decrease the quality of life (as in modern industrial societies)
Mistrust of conventional knowledge and reasoning is strongest in Taoism than any other Eastern philosophy. Beliefs - 1. Transformation and change are essential features of nature 2. Implicit unity of all opposites 3. In order to take, give first 4. Spontaneity in action
Zen blends three different cultures 1. Mysticism of India 2. Taoists’ love for naturalness and spontaneity 3. Pragmatism of the confucian mind
Zen has no special doctrine or philosophy, no formal creeds or dogmas with freedom from fixed beliefs making it truly spiritual.
‘if one asks about Tao and another one answers him, neither of them know it’
Enlightenment in zen is not withdrawal from the world but active participation in it (unlike the monastic character of Indian Buddhism). Everyday life was enlightenment in itself - from painting, calligraphy, garden design to serving tea or arranging flowers to archery, swordsmanship or judo
In quantum theory, probability is a fundamental feature of atomic reality which govern all processes and even the existence of matter (tendencies to exist, tendencies to occur). No specific positions but probability functions
Observer and observed cannot be separated. The preparation process of observation affected the measurements made in the bubble chambers. We cannot decompose the world into independently existing small units with independent properties
What we observe is not nature itself, but nature exposed to our method of questioning (Heisenberg)
Mystics knew knowledge can never be obtained by observation but by full participation, with one’s whole being (Modern physics has come to the same conclusion)
By the very act of focusing our attention on any one concept, we create its opposite (Tao te ching is filled with these. Positron was posited even before discovery as an anti-particle for the electron)
Be in truth eternal, beyond earthly opposites (Krishna in the Bhagavad Gita)
As opposites are interdependent, their conflict can never result in the total victory of one side
Shiva in androgynous form symbolised the dynamic unification of male and female (in thought - it was symbolic for something like the yin and yang)
The subatomic world unites concepts which were hitherto seen as opposite and irreconcilable where particles are both destructible and indestructible, matter was continuous and discontinuous, and force and matter were different aspects of the same phenomenon
Field theory suggests that positrons moving forwards in time are same as electrons moving backward in time - mathematical interpretations are identical (applies to all particle/anti-particle combinations)
It is believed that time passes, in actual fact, it stays where it is (zen belief). By transcending time, you transcend the world of cause and effect. In the absolute, there’s no time, space or causation. (Rovelli in his book on time explains that time doesn’t exist where there’s no cause-effect, as in prior to big-bang). Eastern mysticism and relativistic physics both provide a liberation from time
The concept of force is no longer useful in subatomic physics. There are only interaction between particles, mediated through fields
Particles are processes rather than objects. The age-old Western tradition of breaking complexity into smaller parts has led to search for basic particles by smashing them together
EPR experiments that show entanglement of electron/positron pairs show the fundamental interconnectedness and interdependantness of reality
To transcend words and explanations means to break the bonds of karma and attain liberation
All in each, each in all (one of the fundamental tenets of Mahayana Buddhism)
Human beings are living proof of cosmic intelligence. In us, the universe repeats over and over again its ability to produce forms through which it becomes consciously aware of itself
He who knows does not speak, he who speaks does not know (tao te ching)

The book sees science and mysticism as two complementary manifestations of the human mind - the rational and the intuitive. Both the physicist and the mystic see reality through observation that take place in realms which are not accessible to ordinary senses. The book has stood the test of time as there haven’t been factual errors in the physics in the book and has in fact been endorsed by Heisenberg (there’s a lot of it I have skimmed over). In some places the quantum physics is quite hard to grasp but the author has made serious effort to reconcile his theoretical physics and his spirituality. I don’t think this book is for everyone but if you are remotely interested in physics and spirituality and wonder what “Natural science” as it was before it broke into spirituality, philosophy and science would have felt like, this is probably it. 10/10

PGM.00 · May 4, 2024, 8:58am

When To Sell Paperback – 1 December 1999

by Justin Mamis (Author)

A classic book that was updated and revised in 1994, now with an updated foreword written by the author. A meaningful analysis, a few rules to follow, how to choose good charts, and numerous case histories. Guidelines to follow which help you to be self-reliant.

Apurva_Dubey · May 4, 2024, 5:18pm

The Devil’s Element , Phosphorus and a World Out of Balance by Dan Egan (2023)

While we are acutely aware of some of the existential threats facing our species today, like climate change, nuclear war and pandemic. But there is another equally potent threat which is not on most people’s radar – it is running out of phosphorus.

Between 1900 and 2000 the world population quadrupled from 1.5B to 6B. The population explosion could happen & sustain largely because the food productivity could keep pace with the food demand, which in turn was possible because of the modern NPK (Nitrogen-Phosphorous-Potassium) fertilizer.

While Potassium is abundantly available in nature, and Nitrogen became abundant because of Frtiz Haber (who has a unique distinction of being both a war criminal and a Nobel laureate), but Phosphorous is a limited resource.

According to many experts we will be at ‘peak phosphorous’ by 2030 (when demand starts to outstrip supply as the deposits diminish), and post that we have another about 300 years before we run out of phosphorous.

Billionaire Boston-based investor Jeremy Grantham has made a lot of money predicting bad times ahead. He warned of the bloated Japanese equities market in 1989, the tech bubble in 2000, and the housing crash of 2008. But none of those financial meltdowns come close to the disruption he expects could happen in the decades ahead as the world comes to terms with its dwindling phosphorus reserves. Grantham says. “There seems to be only one conclusion: their use must be drastically reduced in the next 20–40 years or we will begin to starve.”

Another complexity in this story is that one country – Morocco – has two-third of the known reserves of phosphorous. It’s another matter that most of these reserves were ill gotten by Morocco by subjugating West Saharan Sahrawi tribe).

Additionally, over fertilization of soil over the past many decades is now a major cause of water pollution around the world. Phosphorus and nitrogen get washed off from soil by way of rains and floods and eventually get discharged in water bodies. They stoke a summertime explosion of phytoplankton whose decomposition later sucks so much oxygen out of the water that almost no life can survive. Biologists call the phenomenon hypoxia.

The book does offer some solutions like (1) precision agriculture to reduce the usage of phosphorous, and (2) using human & animal waste as a substitute for NPK fertilizer which China/Japan/Korea have been doing for hundreds of years. However, these solutions are incremental and will solve the problem only partially.

PGM.00 · May 8, 2024, 2:52pm

Some of the best books on investing aren’t investing books at all. Here’s a good one published by the CIA in 1999.

It discusses the limitations of human mental processes and how they can lead to cognitive biases and errors in judgment, particularly in the context of intelligence analysis.
It is relevant to investors as it highlights the importance of understanding one’s own biases & limitations in making critical decisions with incomplete information.

phreakv6 · May 12, 2024, 10:35am

The World in a Grain, Vince Beiser, 2018 - I expected this book to be extremely dry read but it was quite relatable and entertaining. The premise of the book is that sand is in everything we use everyday, from roads, buildings, glass, ceramics, PV cells, microchips or are used in manufacturing like in the process of casting (silica crucibles in casting metals). It goes deep into the history, politics, ecology of sand while also touching upon its unique properties that make it so versatile a product

My notes -

Sand is to cities what flour is to bread and what cells are to our bodies. Concrete, glass, asphalt roads or silicon chips - all need sand
Construction industry uses $130b worth of sand every year
Sand lies deep in our cultural consciousness, in our metaphors - so we draw lines in the sand, build castles in it or bury our heads in it
Discovery of transparent glass in Italy in 15th century lead to microscopes and telescopes and the renaissance’s scientific revolution
At the turn of the century buildings were made of stone, brick, clay or wood and glass in the form of tableware or windows was a luxury - mass manufacture of concrete and glass changed all that
Glass bulbs, porcelain, hydrated silica in toothpastes (mild abrasive), elastic made with silicone derived from sand, silicone in shampoo also makes hair shinier, makes shirts less wrinkle prone, fiber-optic cables, glue and even wine has a dash of colloidal silica to improve clarity and shelf life - sand is everywhere in our products
Though we have lot of sand on earth, we are running out of it for construction. Desert sand, having been shaped by wind rather than water are too round and dont bind together well
In 1950, 746m people lived in cities. Today 4.2b or more than half of all people live in cities increasing per capita consumption of sand
China alone used more cement between ‘11 and ‘13 than the US did in the whole 20th century
Dubai imports construction sand from Australia
Sand is loose grains of hard material between 2mm and 0.0625mm (Udden-Wentworth scale). Made of glaciers grinding up stones, oceans degrading seashells and corals, volcanic lava chilling and shattering etc. 70% of all sand is quartz (silica or SiO2 but stained by oxidation) mixed with iron, feldspar etc
Sand and gravel together is referred by construction industry as “aggregate”. Sand is also used in mortar, plaster and roofing components
Marine sands can be useful for construction in concrete but only after salt is washed off them which is very expensive but can be used for artificial land building (as in Dubai’s palm jumeirah)
Higher purity sand as in France’s fontainebleau region are > 98% pure silica and are used for glass making and also for making molds for foundries, adding luster to paint and to filter water in pools. Highest purity quartz used for computer chips and for sand traps in golf courses
Sand mining (very low-tech industry) tears up wildlife habitat, fouls rivers and destroys farmland. Sand helps in percolating water to aquifers - without it water in river rushes to the sea (south india has suffered from this)
Two dozen Indonesian islands have been destroyed by sand mining (that sand ended up in Singapore in reclaiming land from sea - 50 sq miles in 40 yrs). UK and Japan rely more on sand from the sea
Hard and rounded sand grains from Wisconsin and Minnesota is used for fracking
Concrete is the skeleton on which modern cities are built and as important as electricity to the modern world. 75% aggregate (gravel and sand), 15% water and 10% cement. Has been around in some form for over 2000 years from the Mayans to the Greeks (Colosseum, Pantheon). But once Romans stopped making it, it went out of production for 1000+ years! (British brought it back in 1750s)
Portland Cement - powdered limestone + clay fired to high temps in a kiln). 95% of cement used in America is portland cement
Concrete has high compressive strength (stands great pressure without breaking) but low tensile strength - so a reinforcement in terms of steel bars (TMT) is necessary (twisting TMT bars adds to its tensile strength and grips concrete better)
Concrete took over in early 1900s but was decried by stonemasons and bricklayers as unproven and unsafe (threat of new technology always has this response from incumbents). It took off post WW-II as stark, angular concrete-style became popular in buildings
Urban population in US doubled in the early 1900s across cities and Material Services Corp pioneered aggregate (sand and gravel) supply. It still around in some form (low disruption risk)
Every mile of US highway is made with 15000 tons of concrete. Asphalt or bituminous concrete or blacktop is when tar is added to sand and gravel (tarmac is short for tar-macadam). Bitumen is a byproduct of refining oil so as gasoline went into cars, bitumen went into roads. Asphalt and concrete roads have same ingredients - only binding agent varies - cement vs bitumen (concrete roads have lower upkeep)
Cars and paved roads fuelled each others’ growth - the moved paved roads that were built, more people wanted cars
Between 1914-1926 - 250k miles to 500k miles roads. Automobiles reached 20 million. More jobs were created in gas station, repair shops, restaurants, hotels and motels along the highway
Autobahns pioneered most things we come to expect in modern highways - median separating lanes, on-off ramps, flyovers, clover-leaf intersections, banked roads for high-speed turns. Americans copied that style for their interstates (driven by Eisenhower). Partly financed by high tax on gasoline, diesel and tyres - finally completed in ‘91 (46876 miles and cost $130b)
70% of all US freight is carried by trucks - 7 times more than trains as railroads lost out to the interstates. Manufacturing jobs went where highways went as rural labour was cheaper. Millions of Americans moved to suburbs - 30m in ‘50 to 120m in ‘90 (Both these trends are yet to catch up in India).
In ‘57 there were 4000 swimming pools in US - next year 200k - today its 8 million (large open spaces in suburbs)
Highway hypnosis - the uniformity of signs and colors on a highway that makes it feel like a conveyer belt than a road, smothering the underlying regional character
Sand used to make glass must at least be 95% silica and largely free of impurities (Iron imparts a green color to glass) - Melting sand alongside soda which lowers its melting point, limestone or seashells produces basic glass when the mixture cools (1600 deg C)
Romans figured out how to make transparent glass by adding manganese oxide. They also pioneered glass-blowing and made wine glasses. Glass-makers were so profitable that they were nearly royalty in 13th century Venice (they used sand from France’s Fontainbleau region)
Corning glass operates its largest opthalmic glass production center today in Fontainbleau (a natural resource rich region can retain its heritage for long time)
Spectacles increased the intellectual life of professional workers by 15 yrs or more and abetted surge of knowledge in Europe from 14th Century. Telescopes and Microscopes moved science forward by leaps and bounds
Bottlemaking using the Owen’s machine make bottles a commodity from luxury and altered consumption (milk, beer, ketchup to medicines - everything was reimagined) - couple this with highway network and suddenly products were distributed far and wide
Flat glass had equally profound impact in early 20th century - with windows for houses, cars, tableware becoming common with sheet glass
Fiberglass-reinforced plastic led to weather-resistant material than steel that was used in cars and boats. Thermopane (double-paned glass) led to settlements in deserts of Arizona and Nevada as now heat could be kept out
Corning pioneering ceramic baking dishes, pyrex bakeware and storage containers, mass-manufactured lightbulbs, TV picture tubes, heat-resistant windows for NASA spacecraft and even the first fiber-optic fibers and of course the Gorilla glass
Glass today has lost out to plastic and metal containers which make up 80% of the market (China today is world’s largest producer and consumer of glass)
Spruce Pine has the purest quartz anywhere in the world (used in computer chips)
Silicon for solar panels has to be 99.999999% pure. Silicon for chips 99.99999999999% pure - one lonely atom of impurity among billions of silicon atoms
Silicon metal is converted to silicon tetrachloride (used in glass cores of optic fibres) and trichlorosilane which is treated to become polysilicon. 99% pure silicon metal goes for $1 per pound. Polysilicon is 10x that. 99.998% pure silica is used in halogen lamps and PV cells (Iota 6). Iota 8 has 8 molecules of impurity per billion of SiO2 is 99.9992% purity ($10k/ton) - used to make crucibles
The computer chip is made from wafers of purest silicon through a process called photolithography
3/4th of all silica sand production in the US goes towards fracking. Only 7% towards glass (Unimin biggest fracking sand producer in the world)
Beaches are disappearing all over the US and the world because of sand mining upriver and dams as seas reclaim sand from the beaches. Artificially building beaches - or beach replenishment is a $7b industry. Maintenance is high as well - it lasts only 5 yrs
In the US beach nourishment cannot use non-domestic sand (lobbying by dredging industry there).
Palm Jumeirah - world largest man-made peninsula in the shape of a palm-tree is built with dredged sand (doubled coastline, added 48 miles of new shore and 38 miles of beach). Powerful centrifugal pumps have made it easier to dredge sand. If adequate sand is available new seafront land can be built at $536/sft - fraction of what it costs to buy seafront land in HK, SG or Dubai
China’s powerful dredging ships (the magical island maker) built 3000 acres of new land in 18 months in the South China Sea
In 1990, only 10 cities in the world has 10 million population. By ‘14 there were 28 of them, home to 453 million people.
The cement industry is one of world’s leading sources of greenhouse gases (behind coal plants and automobiles)
US has 84000 dams with avg. age of 56 years. Some 15500 dams are high risk. US may have to revamp a lot of its roads and dams in the near future
Self-healing concrete, geopolymer concrete, hydrogels are some ways to repair and replenish concrete. Recycled concrete is good only for low-quality applications like road base and sidewalks. Asphalt though recycles better

We fail to notice what’s omnipresent and like air, sand is omnipresent for modern civilisation. Tracing the way in which we have manipulated sand over the centuries also tells the story of how we have progressed as a civilisation - from paving roads, blowing glass, raising buildings to shaping an intelligence that would someday surpass us. 9/10

phreakv6 · May 19, 2024, 6:53am

Ten Drugs, Thomas Hager, 2019 - If you have been stumped by the pharma sector and need a place to start, there’s nothing better than this book. It covers the history of medicine from opium, its cultural, historic and economic impact - About how opium derivatives like morphine, heroin came about - how it led to first semi-synthetic drugs. The golden age of Pharma between 1930s and 1960s and how most modern Big Pharma started off as dye chem companies and birth of Organic chemistry. The birth of vaccines and antibiotics. An in-depth look at Monoclonal antibodies and the birth of Biotech. A skeptical look at statins and drugs in general. A historic perspective on the birth of the FDA and so on.

My notes -

Avg American takes 2 pills/day over his lifetime - or around 50k pills on avg. $34b on OTC drugs and $270b on prescription drugs. 5% of world population contributes 50% of overall revenue
People in the old days didn’t worry about cancer or heart disease because they barely lived long enough to get them
Seige cycle - stage 1 - astonishing new drugs with widespread enthusiasm. stage 2 - news articles come up on dangers of wonder drug leading to alarm stage 3 - a more balanced view emerges
Its a wonder that human beings discovered any natural drugs at all - considering only 5% of all plant species is edible to us - some famous remedies - mandrake root (stomach problems, cough, sleep issues), black hellebore (strong laxative), henbane (painkiller and sedative) and belladonna (sleep and eye problems), cannabis (numbing pain) and opium (pain reduction & euphoria)
Sumerians (3400 BC) referred to opium poppy as “joy plant”. It traveled then on to Assyrians to Babylonians to Egyptians and then on to Europe. Alexander carried it with them in their conquests of Asia to India
Al-chemie - filtration, distillation, sublimation and crystallisation was the Egyptian science of making medicine
Opium has been part of all miracle remedies in the last several centuries - from Paracelsus’ laudanum in 1530 (Swiss-German), Sydenham’s laudanum in Britain (standard measure, to prevent overdosing), Dover’s powder, Quaker’s drops and Dr. Bates’ Pacific pills in 1700s, - it was used to treat everything from the snake bite to plague
Opium was cheaper than gin and more widely available than tobacco in Britain in the 1900s. Doctors acted as sales agents for it. To feed the growing need, the East India Company started growing it in India and marketing it everywhere
Chinese elite developed the tobacco habit - something they acquired in exchange to their porcelain and silk (British had nothing else of value to exchange). It became a strong addiction that it had to be banned by the emperor in 1632 and all addicts executed
In the 1800s, the British discovered Chinese tea which built a large craze in England (just like tobacco in China). To fuel its purchase, they needed something other than tin, lead, cotton fabrics, watches, dried fish (which the emperor wasn’t impressed by) - and just as with tobacco, found opium as a good exchange since silver wasn’t abundant (this trade deficit thing has been around for centuries looks like)
By 1832, 1/6th of British GNP was opium. Chinese govt. wanted to put a stop to it and Opium wars ensued. By 1840, large part of Chinese army was addicted to opium and were no match to British guns - the emperor ceded Hong Kong to the British along with access to ports and better trading terms. HK became world’s opium center. By 1888, 70% of adult males in China were addicted
Opium spread from China to America with immigrants and gave birth to America’s drug subculture. The Chinese communist govt. outlawed cultivation of opium in 1950 and plowed the fields over and by 1960 it was wiped out of China
Most opium addictions addictions were triggered by doctors who prescribed it for illness or injury
Opium wasn’t one thing but many complex cocktail of alkaloids. The most potent of these was isolated and was found to be 10x more potent than opium - this gave birth to morphine
Merck, the German pharma firm built its empire and fortune on the bedrock of morphine. This also fuelled what we today know as “Organic chemistry” (study of the molecules of life).
The race in org. chem. led to isolating other alkaloids from opium - leading to codeine (used in cough syrups), thebaine, noscapine, papaverine, narcotine, narceine etc. More alkaloids were later found in other plants - cocaine, nicotine, caffeine, strychnine, quinine, atropine from coca, tobacco, coffee, nux vomica and cinchona bark
Treatment for varicose veins led to discovery of syringe - made for delivery of morphine to the veins. American Civil War used morphine shot intravenously for treatment of the wounded. Per capita usage of opiates tripled post war due to addiction leading to America’s first opiate crisis
Smallpox is the biggest infectious disease by mortality - even more than the black plague. People who got it once never got it again and could nurse the afflicted (led to vaccines). Today there hasn’t been a case since 1970s.
Smallpox vaccine was first discovered by Turkish doctors and carried over to England by Lady Mary who had her son inoculated with powdered scab and pus
Lady Mary’s account wasn’t accepted by British doctors and to establish it, orphans were used for the first “clinical trials” (tests on prisoners and orphans were considered acceptable in those days). This reduced mortality rate from 1 in 4 to 1 in 50 (still that 1 in 50 was enough for birth of what we today know as ‘antivaccers”)
British docs were against smallpox vaccine (of Turkish origin) as it was bad for their business of laxatives, bloodletting and special diets (today’s Ayurveda unfortunately is right here)
Vaccination comes from vacca - latin for “cow” after vaccination for cowpox. Jenner takes credit for this, though smallpox vaccine existed prior from Turkey and even cowpox vaccine was discovered by a farmer - but Jenner did the experiments and convinced people - in science credit goes to the man who convinces than to the man who discovers
Vaccines recover upkeep every few years. Smallpox having been eradicated we dont get inoculated anymore (stopped in ‘71). A lab leak of the virus made news in 1978 - the outbreak was controlled and all stocks of the virus around the world were destroyed
Today vaccines are available for flu, herpes, shingles and several other conditions which are left to the patient to decide. Some like diphtheria and tetanus are mandated due to seriousness of illness
The organic chemicals in living tissue were thought to possess a vital spark (around Mary Shelley’s Frankenstein - 1800s). It took the synthesis of Urea by Wohler in the lab to disprove it in 1832. Wohler’s friend Liebig figured plants required Nitrogen, Phosphorous and Potassium and in general how fertilisers work (father of Ag chem)
Liebig (Lie big?) realised there’s no vital spark and it was all just chemical processes. He started making lot of interesting new chemicals - one of them chloral hydrate did not exist in any form in the world until he synthesised it. Its fumes could knock a person unconscious - we know it today as chloroform. It found it use in 1869 as sleeping aid and for soothing patients before surgery.
Chloral (Chloroform) was used until 1905 in mental hospitals until better barbiturates were synthesised followed by early forms of today’s tranquillisers and antipsychotics. Chloral kicked off the trend of tinkering with molecules and synthesising drugs as medicines that could match of exceed natural drugs which gave birth to today’s Big Pharma
Bayer company and several others converted coal tar into valuable synthetic dyes - everybody made lots of money with these colors used in fabrics (1890s). The method was similar to morphine from opium - separating the compounds and experimenting was applied to other natural materials to find their essence and to alter it
Willow bark was used to treat fevers - Bayer managed to separate the active compound in it and attached an acetyl group, the new compound was even better at treating fevers - marketed as Bayer’s Aspirin. The same method of attaching acetyl group to Morphine yielded the wonder drug - Bayer’s Heroin (5x stronger than morphine - which was 10x stronger than opium). Heroin was marketed as less addictive to morphine addicts though it was way more addictive
All the dye companies became pharma companies after Bayer’s success with Aspirin and Heroin (moving from dyes and chemicals to pharma seems to be natural progression - as with PI and Aarti)
Opiates vs Opiods - opiates are derived from opium while opioids are synthesised (today’s painkillers like oxycontin).
Tall claims and abuse of cocaine, cannabis, barbiturates, ether and nitrous oxide led to birth of the Food and Drug Act of 1906. Physicians had to register and keep a record of every transaction involving opium, morphine or cocaine. Physicians prescribed less - opium shipments plummeted from 42k tons in 1906 to 8k tons in 1934
Unable to get a legal dose from doctors after the Harrison act, illegal drug trade started booming and exists to this day. After Bayer stopped marketing heroin, criminals made it from morphine or even opium and heroin being a powder was easier to transport
Heroin is a semi-synthetic drug (acetyl attachment to morphine isolated from natural opium). Several other semi-synthetic opiates were synthesised to be less addictive than heroin - codeine tweaked to make hydrocodone (mixed with acetaminophen to make vicodin), hydromorphone (Dilaudid), oxycodone (Oxycontin) - all were addictive (Purdue pharma and Oxycontin - read ‘Empire of Pain’)
Completely synthetic drugs were tried which had no roots to opium - like fentanyl and carfentanil - but without exception these were addictive (Search fentanyl on X)
Medicine in 1930s did not have antibiotics - pneumonia, cholera, diphtheria, tuberculosis, meningitis and several others were rampant epidemics. Antibiotics alone have extended human life by 10 years
Paul Ehrlich at Bayer was experimenting with dyes - methylene blue in particular and found that it attached to nerves but not muscles - he found similar dyes that attached only to bacteria - why not use it to attach poison and kill bacteria? Thus was born Salvarsan which was arsenic attached to a dye that attached to bacteria. It worked to stop syphilis but was toxic and worked only for Syphilis (first antibiotic)
Drugs which were effective against bacteria ‘in vivo’ (in a petri dish) were metabolised and ineffective or outright toxic to humans. Azo dyes were marginally effective against bacteria - Bayer modified these to cure Strep infections. The drug suddenly stopped working in mice (resistance - but unknown at the time). Attaching a sulphur containing chain made the azo dye work again (sulfanilamide or sulfa drugs)
Sulfa drugs worked at every dose level against strep infections, in every form without serious side effects but because these (the sulfa bit which did all the work) had already existed, Bayer could not patent it. So they did not release the drug as they could not make money off it - until Roosevelt’s son FDR Jr. had to be cured of a Strep infection
Sulfa drugs were all over the place - for pneumonia, meningitis, gonorrhea - cheap to make, they were ubiquitous - by 1937 American drug firms were making 10 tons per week of sulfa drugs and nurses were walking around and handing them over like aspirin (leading to resistance)
Elixir Sulfanilamide, sulfa-drug made for kids contaminated with diethyline glycol used in antifreeze (used to dissolve the sulfa) led to death of 73 kids and subsequently to passing of FDA Act that drugs be proved safe and all active ingredients be listed on labels (until then FDA was a small unit that oversaw false claims and misuse of drugs under Dept. of Agri)
Penicillin was discovered around same time in 1928 when mold contaminated samples of bacteria had clear zones around mold where bacteria wouldn’t grow. It was more effective and broader (syphilis and anthrax) than sulfa drugs. Other molds then yielded streptomycin, neomycin, tetracycline and scores of others (one new pathway found leads to scores of other drugs is the story of pharma discovery)
Antibiotics work against bacterial infections but not viruses (vaccines do) or parasites (malaria)
Disease causing bacteria have a way of creating chemicals that can neutralise antibiotics or find ways to disguise themselves leading to antibiotic resistance - misuse of sulfa drugs was first known case of it. Having gone out of usage Sulfa drugs are today found to be effective as resistance to it has dropped
Surgical shock - patient’s blood pressure would drop, breath grow shallow and heart would start racing while on the surgical table - due to fear and anxiety causing flood of adrenaline and other such molecules released in small quantities
Artificial hibernation to induce ataraxia (tranquil state free from stress and anxiety while at same time strong and virtuous) was needed to prevent surgical shock - led to cocktail of chemicals (RP-4560) from atropine, procaine, curare, opiods and sleeping drugs, antihistamines (histamines were released in response to injury or allergy)
RP-4560 found its way outside of usage for surgical shock to treatment of neurotics, psychotics, depressives, schizophrenics, catatonics - in general extensive usage in mental asylum (Betlehem hospital or Bedlam). It was a miracle drug for treatment of schizophrenia as it dissolved delirium and hallucinations. It did so many things that Rhone-Poulenc didn’t know how to market it - a nervous system modifier, narcotic, hypnotic, sedative, painkiller, anti-nausea, anaesthetic - all in one. It was marketed as Megaphen in France and Largactil in UK - chlorpromazine or CPZ to physicians (first Anti-psychotic leading to today’s Seroquel, Abilify and Zyprexa and birth of psychopharmacology)
Rhone-Poulenc sold rights of CPZ to Smith, Kline & French (SKF) (first licensing deal?) to market it in US (Thorazine). SKF filed it for treatment of nausea and vomiting - once deemed safe, physicians began prescribing it for mental health (first off-label usage?). Patient who hadn’t spoken in 30 yrs after WW-I were cured by Thorazine (truly miracle drug). By 1955, Thorazine alone accounted for 1/3rd of SKF’s sales. Revenues 6x between 1953 and 1970 (
5% of mental hospital budgets was CPZ. Patients in mental asylum patients started going down for first time in history. Freudian psychotherapists junked CPZ (like bricklayers shunning concrete or doctors shunning vaccine earlier in these notes). Giant asylums were torn down and turned to luxury hotels
Miltown, for treating minor anxiety (martini in a pill) was a minor tranquilizer. Several others followed like Librium and Valium which were popular among celebrities (Rolling Stones’ song Mother’s Little Helper) in the 60s and 70s
A cure for TB led to iproniazid. A strange side-effect of it was a cure for depression. Led to a class of antidepressant medicines like Prozac and others that became popular in the 80s and 90s
Seroquel, Abilify and Zyprexa, the second gen anti-psychotics are similar to CPZ and affect neurotransmitters but have lower risk of tardive diskensia and are prescribed for PTSD in veterans, eating disorders in children, anxiety and agitation in elderly (and other such made up illnesses) and not just to severely ill mental patients there by expanding the market and making these bestselling class of drugs
1930s to 1960s - the golden age of pharmaceutical development (WW-II fuelled medical research). From a dozen proven remedies, it had exploded to over 2000. Many of today’s Big Pharma giants prospered in this period. Antibiotics, antipsychotics, antihistamines, anticoagulants, anti-epilepsy drugs, anti-cancer drugs, hormones, diuretics, sedatives, painkillers - all bloomed in this period - mostly through serendipity
Golden age expanded Sulfa drugs to 12 classes of antibiotics. In the last 50, only 2 new classes have been added and no money is going into it which is tragic given the growth of resistance to existing drugs (Expensive research and small payback from single use as compared to blockbuster drugs with repeat usage)
The contraceptive pill (”The Pill”) was the outcome of Rockefeller foundation’s research on social control grounded in natural, medial and social sciences. Sex would turn from conception to recreation. Haberlandt, the grandfather of the Pill would commit suicide caught in crossfire of moral, ethical and political ideas of the time
In 1930s, the structure of progesterone (led to the Pill), alongside other sex hormones like testosterone and estradiol were understood - all related with 5 or 6 sides carbon rings, part of family of steroids
Comstockery (using anti-vice Comstock laws from 1873 used to suppress obscene literature) was used to ban sale of contraceptives in 30 states (selling a pill could land $1000 fine)
Progesterone was yielded in small amounts from sacrificing lot of cows, sheep and other animals so was very expensive. It would get digested in the stomach and not enter bloodstream - so these hurdles had to be overcome. The first one was overcome from a yam found in mexico which yielded 6 pounds of progesterone from 10 tons of root. A synthetic form, called progestin was created to alter it to enter bloodstream when given orally
Enovid (The Pill) was marketed as a control for menstruation and not for preventing pregnancy to overcome Comstock laws (by 1967, 13 million women had used it. Today over 100 million have)
Enovid empowered women to choose the life they wanted once they could control pregnancy - female lawyers rose from 5% in 1970 to 30% in 2000. physicians from 9% to 30% and so on. Age of first marriage for women went up (accidental pregnancies prevented)
Pfizer research stumbled upon a drug to prevent erectile dysfunction when they were working a drug to prevent angina (reduced blood flow from heart). The drug that could open blood vessels to make blood flow more easily led to Viagra (Vigor + Niagara - approved in 1998) - $2b in sales per year as 30k prescriptions were written per day in 100 countries (peaked in 2012 - patent expired in 2020 and generics today have eroded value to $1b or so).
Quality of life drugs is where the big money is as usage is repetitive - since they are taken indefinitely and profit will roll in for decades. The definition of Erectile Dysfunction became wider and were prescribed to older men as well (why Ozempic is so wonderful as a product and is so similar to Viagra on many aspects - socially, culturally, economically. Pushed me to look at Shaily that makes pens used to delivery GLP-1 drugs)
Viagra was covered in insurance but birth control pills were not (strange)
Viagra has serious pricing power - launched at $7 per pill in the 2000s to $50 today (generic sildenafil available for $2 as it fell off patent cliff)
Drug discovery today takes 2 decades of research and half a billion dollars of investment (the push for to invest in Wockhardt with 2 decade research almost completely written off just as it was coming to fruition)
Best way to make a long-lasting blockbuster is to make sure it doesn’t cure anything or merely treats symptoms so that it can be taken endlessly (Viagra, Ozempic, Lipitor, Celebrex)
Merepethedine (Demerol) was discovered by accident at Hoechst when they were looking for a drug to cure muscle spasms. It not only killed pain but it makes its users feel energised. Due to abuse potential, it doesn’t get prescribed anymore
Amidon (methadone) was made by Hoechst after Pethidine while looking for something less addictive. It wasnt much of a painkiller and had unpleasant effects and could be taken orally so ended up being used as treatment for heroin addicts (Methodone clinics)
Paul Janssen while stripping the essence of opioids found the piperidine ring (the enchanted ring) was present in all of these compounds. He wanted to synthesize something more powerful than morphine that was fat-soluble (to get across cell membranes) - this led to pheoperidine (used today as general anesthetic - its 25x more powerful than morphine)
Janssen and team synthesised a molecule 100x powerful than morphine (Fentanyl) - currently the most powerful opioid on the planet
Our brain has receptors for opioids from poppy seeds not by accident - but because endorphins which are natural opioids produced by the body use those receptors. Receptors are turned on by agonists - morphine, heroin, oxycodone and fentanyl are agonists (GLP-1 agonists in Ozempic and Wegovy makes better sense now)
Just like agonists which attach to receptors, there are also antagonists which attach and block receptors without switching them on - Naloxone (Narcan) is used to treat drug addicts by muscling off opioids from the receptors (leading to a trip crash for the addict)
America consumes 15x as many opiates as Austria, Germany and Italy combined and only 20% are taken for medical reasons (80% of world’s opioids are consumed by US). Its a $10b per year business.
Drug companies working on discovery work with physicians and scientists can influence published papers and ensure information gets into the right journals (while I suspected this, turns out this practice is quite rampant)
Oxycontin addicts take to heroin as its cheaper on the street at $10 as compared to Oxycontin’s $30-$100 levels. Unwillingness to bear pain and bias towards finding a pill for every problem makes America’s opioid epidemic a peculiar American problem
Statins are amazing drugs that lower the amount of cholesterol. Most of them are now off-patent and cheap. But the way they are prescribed for everyone above 55 is perhaps overdone
Cholesterol is absolutely essential for the body and liver produces 3/4th of it (rest comes from food) what it needs to make Vitamin-D to bile acids
A drug made by a blue-green mold found in rice (similar to Penicillium) blocked body’s ability to make its own cholesterol by shutting down an enzyme (HMG-CoA reductase). Not only it reduced production, it also increased cholesterol uptake by cells - a one-two punch - leading to the first statins
High-fat diets lead to high serum cholesterol levels (Total measure of LDL or bad chol. and HDL or good cholesterol) which increase risk of heart disease was the assumption. But the actual relation between dietary fat, serum cholesterol and heart disease is more complex and subtle. People with low cholesterol sometimes get heart disease and high cholesterol sometimes never do - but it is a risk factor - one among many (so high chol. causing heart disease isn’t like a germ causing an infection - a single cause)
One culprit per disease mindset comes from wanting to find the culprit so we can find a medicine to stop it
Merck got the first statin (lovastatin) to the market (Mevacor). Then simvastatin (Zocor), pravastatin (Pravachol), atorvastatin (Lipitor), fluvastatin (Lescol) and rosuvastation (Crestor) came into the market
Worries about cholesterol fed the market for statins and research on statins fed the worries about cholesterol. (Statins help high-risk but moderate-risk cases are oversold on it)
Interest in a medical condition seems to develop in tandem with the development of its drug. The drug transforms a bodily state into a treatment category and then a disease category (Like how ADHD transformed from a behavioural problem in schools to a treatable disease)
Definition of “high cholesterol” has constantly kept moving downward (To sell statins). Lipitor alone has sold $120b between ‘96 and ‘11.
Dubious research from 80s and 90s blamed dietary fats which pushed people towards grains and sugars that led to diabetes which is a risk factor for heart disease
Reducing LDL below 90 made no change to risk. Below 70 levels, it in fact increased the risk. Smoking, family history, diet and exercise played just as large a role as cholesterol levels in heart disease. Drug companies talk about relative risk which inflates numbers like 33% but absolute risk is reduced only by 1% in taking statins (classic statistical fudging that ignores conditional probability). Statins are in stage 2 of Seige cycle (critical review)
Monoclonal antibodies - mono for one and clonal for copies - so copies of a single antibody (WBC). A large and growing family of precise and safe drugs. They all end with -mab. Infliximab (Remicade) for autoimmune diseases, bevacizumab (Avastin) for cancer treatment, trastuzumab (Herceptin) for breast cancer, tiruzimab (Rituxan) for cancer and adalimumab (Humira) for inflammation (top blockbuster drug) - all are clones of white blood cells
Antibody-producing white blood cells (B cells) when switched on can pump out millions of antibody molecules per minute. There are billions of B cells so it can potentially cater to billion different types of antibodies. These antibodies are essentially proteins - big and complicated molecules far bigger than traditional drugs produced in the golden age of pharma, which are now called “small molecules”
The tailoring bit of the antibody comes from using mice myeloma cells and normal cells that produce antibody for a specific target in the lab (hybridoma). These hybridoma cells could then be cloned making the same pure antibody. Unlike a vaccine that takes time to produce response, monoclonal antibodies work instantaneously (Milstein and Kohler didn’t patent it and gave away the process for free, kicking off a monoclonal gold rush and the biotech industry)
First MAB was approved in 1984 was 2/3rd human and 1/3rd mouse and sometimes had immune reactions to the mice part - today monoclonals are entirely human
Monoclonals are expensive to make and they can’t get inside of cells and they dont get across the blood-brain barrier. Was the fastest growing segment by 2006 and there were 30 MABs in the market in 2008 ($140b by 2024 - Humira alone does $21b today. A year’s treatment with Humira could cost $50k - A wall of patents kept its revenues secure until ‘23. Today there are biosimilars (generic version of biologicals like monoclonal antibodies) available for Humira)
New trends in pharma - Shift from chemicals (small molecules) to biologicals - shift away from chemical drug discovery of the golden age to precise targeted antibodies - lab designed enzymes - digital drugs with sensors in drugs that can track consumption - drug discovery at the level of huge proteins with computers, a move from in vivo to in silico - crowdsourced drug development - personalised medicine - new adjuvants to existing vaccines - repurposing, like in the case of Abilify which has secured 24 new approved uses

I loved this book as much, if not more than the Attention merchants, because both of them go back a 100 years or more while trying to cover a sector and in the process we learn about how things came about the way they are today, the people and processes that were involved. This adds a depth that cannot be gleaned by reading articles or any other shallow source. Well-researched books like this on an industry go a long way in getting a great understanding on the lay of the land. 11/10

phreakv6 · May 20, 2024, 9:10am

Supermarketwala, Damodar Mall, 2014 - Definitely worth paying attention to when Mukesh Ambani writes the foreword and Kishore Biyani the preface. Damodar Mall has had a colorful career in Indian retail working with - HUL as brand manager, Radhakishan Damani in conceiving and building early DMart, Kishore Biyani in Big Bazaar and now with Reliance Retail. The insights in the book are varied from malls, supermarkets (DMart, big bazaar), apparel retailing (shoppers stop), packaged food brands (ching’s secret), salons (YLG), gyms (talwalkars), brand building (WildStone) etc. The book was written in 2014, so some of the information is already outdated but some of the observations on the Indian consumer are absolutely timeless.

My notes -

In US and Europe retail modernisation took place after they reached middle income, unlike in India. Like in telecom where we jumped a stage in the evolution by moving directly to mobile phone bypassing landlines, our retail modernisation is a similar jump (Mukesh Ambani in the foreword of the book)
While most businesses know the customer is always right, the problem is in identifying the customer correctly (with most management coming from upper-middle class, ‘credit card’ india)
Demographics - in India one in ten Indians is above 60 years, number of working women has doubled in the past decade (book written in 2014) and two-thirds of urban Indians are self-employed
In India, its not seasons that drive categories of consumption but marriages and festivals
Modern retail is a three-legged stool - with customers, supply partners and store colleagues as the legs
Compared to western societies, consuming India is more frugal and green - where even upmarket homes collect plastic packs of milk and old newspapers for recycling (cabinet next to shoe rack in most houses). Thrift and recycling is our way of life.
Modernising retail has to be just a couple of steps ahead of the customer and not more (Kishore Biyani in the preface
The author would travel with Radhakishan Damani to Raigad Bazaar at Alibaug, 90 kms from Mumbai to observe how middle-class India shopped back in ‘99 when only few supermarkets existed (Apna Bazaar, Sahakari Bazaar and Raigad Bazaar - all run by co-ops)
In places like Alibaug, a petty-industry town with small population, men and women didn’t shop together but yet at Raigad bazaar, both were involved as couples in the shopping decisions, pushing cart through narrow aisles
These were white-collared people in bank or teaching jobs and coming to a self-service store with your spouse was the modern-thing to do, buying not just groceries but other modern untried things too (Damani’s observations were astute) - saving a little money in the process was a nice thing to do on a Sunday
Author in his travel to Brazil as part of his HUL gig observed modern retail thriving in Brazil which was a developing country - women would shop alone, and would be brought and dropped back by store-run open-top buses
In the decade following 2000, consumer purchase behaviour changed drastically with rise in income, growing aspirations and expanding product choices. We are using different products from what we did a decade back and also buying them differently in open-format self-service shops
In over-the-counter shopping, there’s a mystique between desire and purchase. In self-service shopping, the customer flirts with brands openly and savings is a participative sport
Author would visit his stores (with Biyani or Damani or other colleagues) and would observe contents of a cart, the body language of customer, where they push the cart and at what speed (similar to our road sense - we stick to left and middle for fast), how we slow down around bins and so on
The store gains when we slow down, have our guard down and feel positive. Stores are designed to help with this
Men and women shop very differently in an apparel store. If a man takes shirt to trial room, the possibility of purchase is 2/3rd. For woman its less than 1/4th. When two women shop together, time spent is highest (and hence spends), next is woman alone and then a woman and man together and the worst, a man alone (In an electronics store though men are in their element)
What you get hear in the uniform, you can never hear wearing a boss’ tie (Author spends time in shops in store uniform)
Equality has never part of our social and cultural genes all through history - inequality and privilege has always existed though our constitution intended equality, it was never delivered. In malls, hypermarts and supermarkets - there’s no discrimination of any kind built into their design or practice - even if one buys nothing, he gets to use the air-conditioned environment and clean toilets
One person, unlimited aspirations is the cornerstone of our economic resurgence.
Businesses that venture beyond large towns into the hinterland will truly be the pioneers as thats where democracy, choice and access will impact lives the most
Turn a store event into festival and customer responds to the call, with the sense of participation and cheer to get the best bargains (hence all the festive sale ads and decor in stores)
A newly married woman would shop at the supermarket though kirana store is close by to avoid gossip by the shopkeeper with her in-laws (gem of an observation that’s so uniquely Indian). She doesn’t wish to be assessed, merely served
Customers welcome bargains and the feeling of having “triumphed” over the shopkeeper - it makes them feel good that they are winning over the retailer, even if it isn’t necessarily true
In a traditional departmental store , the owner sits safely behind the counter, at a higher level than the customer with fan directed at him while Customer is on the street, lower, sweating - its a position of disempowerment for the Customer (so subtle, so true)
A woman feels like trying Dove, instead of Haman, she can do so easily without the patronising shopkeeper - she can pick it up, feel it and smell it, check the price and make a decision in a supermarket. The shopkeeper’s help in a traditional store comes at the price of freedom
A small part of the population has an uneven claim on the infrastructure due to the uneven pace of development. In modern retail, the lower middle class is able to lay claim just as the affluent do (Cheap telecom plans is another eg. of it). Aspiring classes have desires now that there’s a possibility that they will be met and middle class no longer has monopoly over resources
A migrant worker is able to carry products and lifestyle from the city to his native village and the consumerism creates a ripple effect there
Security (at a mall or supermarket) means different things to different people. To the young woman its protection but for her father it could mean invasion of privacy (the frisking and checking feels subtly threatening).
A grand bargain sale with the snaking queues and festival atmosphere on the other hand feels like home to the older men who feel attention is not singled out on them (explains why erstwhile big bazaar or current dmart are designed the way they are). The industrial era environment, factory or warehouse-like feels like home to them
Modern retail has opened up lot of job opportunities to the local youngsters who for the first time are inducted on how to handle customers (confidence in self, respect for others, listening, firm but polite talk - all different from what they are used to in their family environments)
As a confident youngster, a young woman trained in modern retail, carries that confidence to her own home with independent opinions and shapes the entire family (for most, this is the first salary)
Waste and modernity are almost synonymous in our minds. We feel guilty to throw away food, pass over clothes and books as hand-me-downs and so on. The exchange mela therefore is a very Indian thing that satisfies our ethos
Queues at bus stops, train stations, airports, colleges, temples, buffets show that if you leave over a forearms length between you and the person in front, it will be used to cut across the queue, get bridged or occupied within 5 mins (elbow push factor - valid across social strata). There’s almost a “need” for a little bit of crowding with our bias towards the collective.
Retailers who went by the western ‘butt-brush factor’ (consumers in west would drop the queue if it gets too tight) and designed lavish layouts were perceived to be “expensive” and hence don’t do well here. People here feel a little reassured by a little elbow-push (might change with increase in affluence)
Shopping alone in the neighbourhood store vs with family at a supermarket - the expectations, experience and decisions are very different. Everyone is involved in the decision. The extra pair of eyes, hands and ears are attuned to different stimuli, driven by their own needs, wants and temptations. (One member might convince they try a new brand of tea or biscuits for eg.). do aankhen, do haath to cheh aankhen, baarah haath mode as the author calls it.
Unlike the west where going to the supermarket is a chore, here its part of the monthly entertainment for the family
Copy shopping - peeping into a fellow-shopper’s trolley and letting it influence your shopping decisions (social proof - online retail does it through “Customers also bought” or some such)
Trend trolley - a trolley that contains the best offers in the store. Its taken around the store to nudge and inspire
In an apparel store, for women the most happening place is the fitting room area. Women keep an eye out for what other women are trying out - the voiceless exchange of ideas is more potent than posters on the wall - shops keep the fitting room rack of tried clothes seeded with what they want to sell
It is not wise to take even the smallest risk over the lifetime-value (LTV) of the customer over the avg. dispute value (handle disputes in favour of customer). The Customer service desk, goods return, alteration are considered “cost items” - instead they should be seen as lifetime value protectors
Modern retail is where the consumer gets to go on a date with your brand, close and personal. The consumer shops with all senses (or at least two of them) - the product must speak to the customer in a one-to-one interaction
Switching brands in pre-modern retail era had to be a pre-determined decision (before you asked the shopkeeper). In modern retail, its easy to switch a pepsodent for colgate. Flirting with new brands is the norm
Making just the right amount of dal or curry that gets finished in the dining table is a minor triumph as refrigerating leftovers is not part of our culture - the homemaker takes pride in serving up authentic food that doesn’t come in packs. With out belief that food is best eaten fresh, packed and preserved food system will take time to penetrate. But we will use the refrigerator for ingredients to keep the produce fresh
While we don’t mind storing vegetables bought at the farmer’s market in the fridge for a week, we refrain from buying vegetables in the cold section of the supermarket - though technically both are same
The total installed refrigerator capacity is 1000 Cr litres and growing rapidly (from 2014) and it has influenced the way we buy fruits and vegetables and milk (stocking up)
WIP foods - batter, chopped vegetables, kneaded dough, chutney, ginger-garlic packets, gravy packs all find space in the fridge but not finished foods, though technically there’s barely a difference
As urban women in India migrate to nuclear families, away from mothers and grandmothers, their affinity to culture also is slowly dissipating. Currently labour is cheap and its easy to get a cook to make meals but when its not possible or is expensive, culture-neutral ready-to-cook, ready-to-eat meals might takeover as it did in the west.
There are more consumers for exotic samosa than for guacamole and that wont change in a hurry. Indians talk salad and eat samosa. Our sophistication might lead to bisleri water pani puris (Haldiram’s do it) than towards non-Indian tastes (Nestle’s tastemaker in maggi or Lays’ kurkure are testament to this). But Indians will celebrate their evolving purchasing power with exotic foods while returning to what they grew up with
Ready pastes, batters are making it easy to make a chinese fried rice or other such foods (maggi bhuna masala, ching’s schezuan fried rice mix, MTR sambhar masala, Smith & Jones ginger-garlic paste etc.) . While we might go to the extent of buying dal makhani masala, we are far from buying ready-to-eat dal makhani, though both are value-add processed foods
Festivals for us are a license to indulge. Every celebration was accompanied by a food that was considered exotic - that’s how food and culture traveled across the country - sabydana, rajgira atta, bhagar, sweet potato, besan, maida, dates, sevaiyan, sherbet, camphor - these were rarities in different regions and were cherished during festivals. We had an innate sense to try new things during festivals
Reliance has 42 regional and national festivals they plan for. Increasingly the regional and national cultures are merging with Ganesh Chaturthi being celebrated across the country and mehndi ceremony migrating all the way to the backwaters of Kerala from Rajasthan
Indian proclivity for sticking to culture while accommodating modernity has given rise to chocolate boxes replacing mithai boxes for festivals
Shoppers Stop by B.S Nagesh in 1991 was the first fashion revolution in India bringing ready-to-wear fashion sold in self-service way. For the first time one could try variety of designs, cuts, fabrics and colours in both Indian and Western styles
Zara with faster, shorter design cycles where designs change faster and look fresher while managing to be in-tune with Indian fashion preferences is a different take to watch out for (B.S Nagesh in 2014 was spot on with fast fashion taking over - now with Zudio doing well)
The self-employed and the white-collared in India wear different clothes. With no fancy designation on the visiting card, the self-employed want to distinguish themselves with the clothes, accessories, pens and cars.
The salesman in a women’s saree store for wedding sarees is allowed into the woman’s personal space and his feedback carries a lot of weight in the purchase decision.
The practice of printing M.R.P on all consumer goods by law in unique to India and maybe Sri lanka. Its a byproduct and ugly relic of socialist era to prevent sellers, manufacturers and traders, retailers from exploiting the buyer. It hurts the kirana store guy because he can’t charge more for the convenience of delivering or making something available. In the west, these are called “convenience stores” for a reason and you are charged more for the “convenience”
Redistribution stockists or RSs are the company’s eyes and ears on the ground as they sell to both wholesalers and retailers. Stockists are barely profitable and their profits are usually less than a single employee’s salary (super thin margins)
Everyone in the distribution chain is always short of working capital. Organised retail though buys on credit and sells on cash and is always in surplus. An organised retailer thus halving his credit period with vendors from 8 days to 4 days makes his distributor very happy - the vendor now has a stake in the retailer’s prosperity (win-win) - promotion stocks, newly launched products get to the retailer first, local display and consumer sampling budgets were director to the retailer, vendor took care of slow-moving stocks and ensured pipeline was moving smooth and vendor gave retailer the best-in-class margin and the retailer would be last to go out of stock for a product in short supply (DMart model)
People eating in an Haldiram’s outlet is double the number at McDonald’s (in a highway halt) - so given similar ambience, customer prefers local flavours (very pronounced in south as well with A2B doing what Haldiram’s does in the north)
Author suggests Indian would prefer a DIFM (Do it for me) model to a DIY (Do it yourself) model. That’s why we have coffee vending machines with an operator. So a kirana store backed by e-commerce portal from Tata/Ambani/Birla/Biyani that panders to the needs of customers could do well (There was talk of Reliance going down this route in the past?)
If Britain is a nation of shopkeepers, India is a nation of male shopkeepers (from grocery stores to lingerie). The reason is that the shop has to deal with 30 suppliers/sales and delivery persons every day - mostly rough and tough men. It takes a man to deal with these men. Sourcing from a cash and carry store like Metro allows a small shopkeepers to deal with one wholesaler with good terms instead (this can help women run this business). In Japan or Thailand, 25-33% neighourhood stores are run by women.
WildStone used the weak positioning of Axe deodorants. In India consumption should not be restricted to the creamy layer and must reach out to the middle-class. The edginess of ads which were teasing and tempting and seductive worked - but when it crossed the line to become lewd, it backfired - must stay sensitive to the cultural boundaries
DMart model - when customer is sure she is getting best value all the time, she lets her guard down, buys more and in the bargain, the store wins
All DMart did was watch the customer trolley and read everything about Sam Walton and Wal-Mart. It retained its frugal outlook to retail through upheavals
RKD would pick 10 principles or acts needs to run the business and pick the top two or three that mattered most and then be the market beater in those areas (similar to Buffett’s way of prioritising)
The merchandise dept. of DMart act like purchasing agents of the Customer and not of the company. If the buyer buys better, they can sell cheaper - what you receive you pass on. Even when the customer is not looking, not careful, they still save money. No marketing required as word-of-mouth is sufficient for this model
All equipment at DMart, be it shelves, trolleys, scanners, all hardware and connectivity deployed at the stores is expensive, best in class. There are no sales targets. There’s no need for skilled manpower.
Regional modern retailers with treasure trove of best practices - Pothy’s, Pazhamudir Nilayam, Saravana stores in Chennai. Jalan’s in Varanasi. Sarvodaya in Mumbai and Khadim’s in the east
“Ching’s secret” realised what the woman wanted in the kitchen was help and not replacement. They didn’t seek to become Cup O’Noodles. They reached market through trial and sampling in modern retail. By providing a bouquet of products for the cuisine together - hakka noodles, soy sauce in a single place - the power of suggestion became a multiplier in itself. Ching’s secret offered a cuisine solution unlike Knorr and Maggi offering a product (Author mentions ready-to-cook idli-dosa batter could become a pan-indian food and it has become true with iD doing it now, along side vada batter and chutneys)
Talwalkar’s started in 1932 with a promise of making the gym a safe place for a woman to go (unlike the Akharas where only men went).
Gym is the only ‘store’ the customer comes to everyday. They must be geared for frequent customer contact than a restaurant, salon or grocer
While Indians don’t spend much in colouring and styling hair (they consider it as spoiling it), they don’t mind spending on skincare - YLG, a completely homegrown business figured this out and it was game changer with skin vs hair being a 60:40 in business with only 10% coming from styling (Kaya skin clinic by Marico did sophisticated high-end skincare as well). YLG grew to 34 salons in 5 yrs and is a market leader with 40% share edging past Lakme in Bangalore.

India will be one of the largest consumer markets and the prize of success will be huge. There will be new consumer categories, new modes of consumption and new technology aiding and disrupting that brands and retailers should pay attention to. The book outlines a lot of nuances that are India specific and there aren’t many books and experts who are as willing to share their decades of insight. Very useful read. 9/10

parkhi_nazar · May 21, 2024, 11:02am

When the author’s name itself is “Mall”, you do expect insights about shoppers from him

pankajgarg · May 21, 2024, 11:08am

Read this book after your tweet. Great consumer insights.

My favorite line is in the preface
"In the West, retail modernization took place after their markets were already middle-income, consuming markets. The advent of modern retail brought further efficiency, scale, and value to their markets.

However, the journey of modern retail in India will take a different path. India has a large and culturally inclined population that is just evolving into the middle class. This middle class will need a modern retail model that will not merely serve consumption efficiently, but redefine consumption itself."

And we are seeing indian retail redefined with Quick Commerce and D2C brands

Jeljo · May 26, 2024, 7:17pm

Theme :

Author of the book contend that Physics and Mathematics are not enough and we have a lot to learn from Biology, Evolutionary Biology to explain our financial systems.

FINANCIAL FEAR FACTOR

Due to millions of years of evolution , our fear reflexes are highly refined and faster to save us from danger much faster , even than our conscious mind.
But it turns out that the same neural circuits are often triggered when we’re threatened in other ways—emotionally, socially, and financially— and therein lies the problem.

While the fight or flight response might have some benefits, it almost surely won’t help you when the stock market crashes

The Adaptive Markets Hypothesis is based on the insight that investors and financial markets behave more like biology than physics, comprising a population of living organisms competing to survive, not a collection of inanimate objects subject to immutable laws of motion.

It implies that the principles of evolution—competition, innovation, reproduction, and adaptation—are more useful for understanding the inner workings of the financial industry than the physics-like principles of rational economic analysis.

Learning is a form of conceptual evolution.

We begin learning a new behavior using a heuristic—our rule of thumb—that may be very far from optimal. If we receive negative feedback from applying that heuristic, we change the heuristic. We don’t even have to do this consciously. We reproduce the original behavior, but make a variation on it. If this change yields positive feedback, we keep using the new heuristic; if the feedback is still negative, we change it again. Over time, and after a sufficient number of tries, even the clumsiest process of trial and error can lead to an efficient heuristic

However, there’s a very important difference between biological evolution and human learning: our heuristics can evolve at the speed of thought. This is key to the success of Homo sapiens as a species.

THE ADAPTIVE MARKETS HYPOTHESIS

Although the Efficient Markets Hypothesis has been the dominant theory of financial markets for decades, it’s clear that individuals aren’t always rational. We shouldn’t be surprised, then, that markets aren’t always efficient.

We aren’t rational actors with a few quirks in our behavior—instead, our brains are collections of quirks.

We’re not a system with bugs; we’re a system of bugs.

Basic gist of Adaptive Markets Hypothesis

1. We are neither always rational nor irrational, but we are biological entities whose features and behaviors are shaped by the forces of evolution.

2. We display behavioral biases and make apparently suboptimal decisions, but we can learn from past experience and revise our heuristics in re- sponse to negative feedback.

3. We have the capacity for abstract thinking, specifically forward- looking what-if analysis; predictions about the future based on past experience; and preparation for changes in our environment. This is evolution at the speed of thought, which is different from but related to biological evolution.

4. Financial market dynamics are driven by our interactions as we behave, learn, and adapt to each other, and to the social, cultural, political, eco-nomic, and natural environments in which we live.

5. Survival is the ultimate force driving competition, innovation, and adaptation.

If markets are truly efficient, then no amount of analysis is going to help an investor to beat the market—so why not invest in an index fund instead?

If no amount of analysis is going to help an investor beat the market, what are we to make of George Soros breaking the Bank of England, or John Paulson’s $20 billion profit from 2007 to 2008 betting against the housing bubble, or the extraordinary careers of the computer scientist David Shaw and the mathematician James Simons, whose hedge funds have consistently managed to beat the market?

THE ISLANDS OF EVOLUTION

It turns out hedge funds are a direct analogy to the Galapagos Islands in the financial world.

Different forms of funds innovate and proliferate just like the finches on Darwin’s far-flung islands.

Some hedge fund strategies gain while other strategies lose, and in the background, there’s a constant process of hedge fund formation, innovation, and extinction. The Adaptive Markets Hypothesis explains this diversity: why some hedge funds succeed, why most hedge funds fail, and why the largest and most successful hedge funds employ a great diversity of strategies.

The Adaptive Markets Hypothesis provides a compelling answer: hedge funds are an important indicator species in the financial ecosystem.

During good times, hedge funds are the “tip of the spear”; they’ll take advantage of new investment opportunities as soon as they arise. During bad times, hedge funds are the “canary in the coal mine”; they’re the first to suffer from any kind of financial dislocation.

AN EVOLUTIONARY HISTORY OF THE HEDGE FUND

Despite the relative simplicity of the hedge fund as a form of investment—at its core, it’s simply a private partnership.

The rise of these funds in the modern financial environment is exactly parallel to the evolution of a successful species in a changing biological environment.

Unlike biological evolution, however, financial evolution proceeds at the speed of thought, where several generations of ideas can come and go within the time span of a productive working lunch.

THE TRADITIONAL INVESTMENT PARADIGM

If you’ve ever received any professional investment advice, you were probably introduced to these principles:

Principle 1: The Risk/Reward Trade-Off. There’s a positive association between risk and reward among all financial investments. Assets with higher reward also have higher risk.

Principle 2: Alpha, Beta, and the CAPM. The expected return of an investment is linearly related to its risk (in other words, plotting risk versus expected return on a graph should show a straight line), and is governed by an economic model known as the Capital Asset Pricing Model, or CAPM (more on this later).

Principle 3: Portfolio Optimization and Passive Investing. Using statisti- cal estimates derived from Principle 2 and the CAPM, portfolio manag- ers can construct diversified long-only portfolios of financial assets that offer investors attractive risk-adjusted rates of return at low cost.

Principle 4: Asset Allocation. Choosing how much to invest in broad asset classes is more important than picking individual securities, so the asset allocation decision is sufficient for managing the risk of an investor’s savings.

Principle 5: Stocks for the Long Run. Investors should hold mostly equities for the long run.

Financial economist William F. Sharpe observed that the fluctuations of an investment’s return can be separated into two distinct components: fluctuations due solely to the unique characteristics of the asset, and fluctuations due to economy wide factors like economic growth, unemployment, inflation, political instability, and so on.

He called the former kind of risk “idiosyncratic” and the latter kind “systematic”

Sharpe developed an explicit measure for systematic risk called beta and concluded that an asset’s expected return is directly proportional to its beta.

An asset with a beta of 1 would have systematic risk comparable to that of the broadest portfolio of all risky assets, which he called the “market portfolio.” For convenience, we approximate the market portfolio by broad stock market indexes like the S&P 500.

On the other hand, an asset with a beta of 0 has no systematic risk—which doesn’t mean it has no risk, because there’s still idiosyncratic risk—and should therefore pay no extra return or risk premium to investors. In the same way, an asset with a beta of 2 has twice the systematic risk of the market portfolio.

THE GREAT MODULATION

The Adaptive Markets Hypothesis, however, tells us that long periods of market efficiency and stability are not guaranteed; they depend on the stability of the overall environment.

When there are big changes that have significant impact on that environment—including political, economic, social, or cultural shifts—markets are going to reflect those changes.

The number of inhabitants on this planet has more than quadrupled in a hundred years. Such vast and rapid growth has financial as well as ecological implications. The activities involved in acquiring assets, income, education, or permanent housing for the 7-billion plus necessarily increase the required scale of financial markets, as well as the complexity of the interactions among the various counterparties.

RISK/REWARD AND PUNISHMENT

The Adaptive Markets Hypothesis tells us that risk isn’t necessarily always rewarded—it depends on the environment. Investing in stocks for the long run may or may not be good advice, depending on where you’re investing, for how long, and what your risk tolerance is.

THE DEMOCRATIZATION OF INVESTING

A new investment paradigm is emerging.
Let’s reconsider the five principles of the traditional investment paradigm from the perspective of Adaptive Markets:

Principle 1A: The Risk/Reward Trade-Off. During normal market condi- tions, there’s a positive association between risk and reward among all financial investments. However, when the population of investors is dominated by individuals facing extreme financial threats, they can act in concert and irrationally, in which case risk will be punished. These periods can last for months or, in extreme cases, for decades.

Principle 2A: Alpha, Beta, and the CAPM. The CAPM and related linear factor models are useful inputs for portfolio management, but they rely on several key economic and statistical assumptions that may be poor approximations in certain market environments. Knowing the environ- ment and population dynamics of market participants may be more im- portant than any single factor model.

Principle 3A: Portfolio Optimization and Passive Investing. Portfolio opti- mization tools are only useful if the assumptions of stationarity and rationality are good approximations to reality. The notion of passive investing is changing due to technological advances, and risk manage- ment should be a higher priority, even for passive index funds.

Principle 4A: Asset Allocation. The boundaries between asset classes are becoming blurred, as macro factors and new financial institutions cre- ate links and contagion across previously unrelated assets. Managing risk through asset allocation is no longer as effective today as it was dur- ing the Great Modulation.

Principle 5A: Stocks for the Long Run. Equities do offer attractive returns over the very long run, but few investors can afford to wait it out. Over more realistic investment horizons, the chances of loss are significantly greater, so investors need to be more proactive about managing their risk.

ADAPTIVE MARKETS AND LIQUIDITY SPIRALS

Liquidity is the measure of how easy it is to buy or sell an asset. Shares of Apple are very liquid—you can easily buy or sell them at the click of a mouse button. Your house isn’t nearly so liquid; it takes weeks and months to buy or sell a house

How does liquidity arise?

Imagine that many more people want to buy shares of Company than those who want to sell them—what happens?
Basic economics tells us that the price of that security should rise until demand eventually equals supply and the market reaches an equilibrium.

But how does that occur in practice?
After all, who wants to sell a stock, knowing that the increased demand is going to cause it to increase in value? Traditionally, designated market makers, such as the NYSE/ AMEX specialists and NASDAQ dealers, have played this role, providing supply when there’s excess demand, and providing demand when there’s excess supply.

In other words, traditional market makers sell when you want to buy and they buy when you want to sell. They get rewarded for doing so.

Exchanges allow market makers to charge two different prices, one for buying from us (the “offer” price), and a higher one for selling to us (the “bid” price).

So market makers get to buy low and sell high on every trade, and we get to do just the opposite. We’re giving them an incentive to take the other side of our trade, that is, to provide us with liquidity.

That’s why they’re called “market makers”—they make markets in a very practical sense, and the bid/offer spread is their fee for doing so.

Finance Behaving Badly

Although the world is no stranger to financial crises, the size, breadth, and duration of the 2008 crisis tells us something’s changed.

The outsized population of Homo sapiens has brought with it some outsized challenges, including threats to financial stability.

The growing importance of finance means we have to start paying more attention to the three key features of the financial ecosystem highlighted by Adaptive Markets: the behaviors of the different species, the environment in which the behaviors take place, and how the two interact and evolve over time.

THE TYRANNY OF COMPLEXITY

The challenges posed by technology are part of a broader trend of in- creasing complexity. As the financial system grows more complex, it becomes harder and harder to understand, never mind manage. In fact, our attempts to regulate this complex system by layering rule on rule have actually increased complexity and uncertainty.

Government is a source of systemic risk

In the Adaptive Markets framework, complexity means we don’t have a good narrative for the system. The solution is obvious: we need to get smarter. Complexity can sometimes be reduced by developing a deeper understanding of the underlying structure of the system.

ECOSYSTEM MANAGEMENT

We may never be able to fully prevent financial crises. When free en- terprise is coupled with human nature, greed will dominate fear from time to time. But we can make the system more robust and resilient.

we have to look at the financial system as a system, and ask whether or not it’s sustainable, resilient to environmental shocks, and operating as efficiently as possible given existing resource and technological constraints.

Rather than simply imposing rules against bad behavior, a better approach is to develop a deeper understanding for how such behaviors arise and determine what aspects of the environment need to be changed to reduce or eliminate them.

In fact, biological systems offer many examples of highly effective regulatory mechanisms that are the product of millions of years of evolution.

For example, humans are endowed with “thermal homeostasis,” the ability to regulate body temperature to within a narrow range around 98.6 degrees. When body temperature falls because of exposure to cold, the hypothalamus detects the change and responds by caus- ing the body to shiver, generating heat; when the body becomes too warm, the hypothalamus causes it to perspire, which cools the body through evaporation. These processes evolved over millions of years to maintain a relatively constant body temperature, especially within the highly temperature-sensitive human brain.

At the core of many of these biological regulatory processes are feed- back loops, designed to prevent the system from getting too close to the point of no return.

Financial crises are a form of positive feedback, like the squeal of a microphone, where small changes are amplified into large effects.

LAW IS CODE

To regulate the financial system as a whole, we need to better under- stand the existing corpus of financial regulation as a whole.

Could the principles of good software design be used to improve the way we write financial regulations?

If different parts of these software systems are tightly coupled, then changes to one component could cause failures in other components, and the sheer size and complexity of these systems may make it virtually impossible to anticipate all the ways that failures could happen

To visualize the amount of coupling in a piece of software, let’s cre- ate a graph where each module is represented by a dot and anytime one module references another module, we’ll draw an arrow going from the module being referenced to the module that contains the reference. The result is a network map of all the interdependencies between differ- ent parts of the code, and coupling can be measured by how dense or sparse this map looks. A very dense graph means there are lots of inter- dependencies—a sign of a poorly designed system—and a sparse graph means most of the modules are stand-alone and the chances are smaller that changing one module will cause another to crash.

These network graphs, help to measure regulatory complexity, provide an X-ray of the hidden struc- tures within current banking regulation.

By using better technology to understand the complexity of these regulations, we can design a better system, one that adapts to the growing complexity of the financial world.

MAPPING FINANCIAL NETWORKS

Another useful feature of network graphs is the ability to model contagion. If we let the dots represent financial institutions, a network graph of counterparty relationships between these institutions could show how losses at one institution can be transmitted along unexpected financial linkages to other institutions

Like an epidemiologist studying the spread of a contagious disease from its point of origin, we should identify the potential linkages through which a financial crisis might travel.

phreakv6 · June 12, 2024, 9:07am

Genentech, Sally Smith Hughes, 2013 - The book follows the birth of Genentech and consequently the birth of Biotech itself and follows its people, the tech, regulations and economics of recombinant DNA tech and how it transformed the landscape of medicine which was until then dominated by small molecules. Wanting to understand GLP-1s in depth while investing in Shaily got me into this book, among others

My notes -

Genentech was founded by Herbert Boyer (professor of microbiology) and Robert Swanson (Unemployed VC). Its name a play on Genetic Engineering Technology and its goal to apply recombinant DNA tech to make insulin, growth hormone and other drugs
Balancing freewheeling academic culture (profs and research guys from universities), federal guidelines from recombinant DNA tech (there was lot of fear of Frankenstein, like we are fearing AI now) and need to make profit - balancing science, tech, legal, political, economical was Swanson’s job
Within 3 yrs of its founding in successive years, Genentech cloned and expressed Insulin, the growth hormone and human interferon and got listed and raised $38m within 4 yrs of founding in 1980 - listing pop from $35 to $89 (largest listing gain for its time) - ushered in Biotech industry as we know it today there on
Recombinant DNA tech - discovered in ‘73 and modern biotech was born. It entails joining of different pieces of DNA and cloning it in a bacteria and expressing the DNA as a protein or RNA with the bacteria acting as a factory (This is what peptide manufacturing through fermentation is. Today’s GLP-1 drugs are made this way)
Restriction enzymes (naturally occurring) - these cut DNA at specific sequences and were a crucial piece in recombinant DNA tech (Boyer’s fascination with this led to the tech)
Plasmids (circular double-stranded DNA fragments) in bacteria carried the antibiotic resistance genes and helped pass these genes horizontally to other bacteria. This is how antibiotic resistance spreads in bacterial population. The same is used to transfer the recombinant DNA transferred to the plasmids to spread it to the population
EcoRI (restriction enzyme) cuts DNA in a staggered fashion that makes its ends cohesive (like two zippers cut staggered aligned together can have a runner run through them). This was a crucial piece of recombinant DNA tech
The very first experiment involved cloning recombinant plasmids containing frog DNA in E.coli - it didn’t matter to the bacteria that the DNA came from an animals several levels higher in the evolutionary tree
Once the recombinant DNA tech was published in Science, a moratorium was imposed on the tech until a conference was convened to consider the risks and develop guidelines (not unlike the call for regulating AI - but this time no such has happened)
In the 1970s the popular approach to recombinant DNA tech was “wait and watch”. Practical applications being 5-10 yrs away, there was no rush to get started
Swanson and Boyer were both naive and with their naivete and inability to foresee all problems in advance, they boosted each other over the bar
Insulin in the 70s was extracted from pigs and cows and was an essential staple of medical practice. People had allergic reactions to it. Since insulin’s amino acids were well known (only 50 of them, so it was small as well) and there was good demand ($100m in sales then), it was ideal candidate for first target of recombinant DNA tech
Genentech’s business model was to license the engineered bacteria (after sequencing, splicing, cloning) to established pharma firms for manufacturing, trials, filing and marketing
Kleiner and Perkins, a VC firm known to Swanson agreed to invest $100k in the venture (it would be the first of billions that would be needed to be raised later)
Chemical DNA synthesis - laboratory construction of artificial genes and DNA fragments from chemicals off the shelf (can be then used for some or all fragments in recombinant DNA tech). It behaved just like natural DNA and was biologically functional (somatostatin with 14 amino acids was the first one to be synthesised this way)
Companies like Eli Lilly tied up with various academic institutions for the tech for recombinant insulin (something that gave them strong headstart that they maintain to this date). Lilly also tied up with Genentech for human insulin - supporting the effort at $50k/month
Insulin’s 51 amino acids were present in 2 chains, called A and B chains which meant the scientists had to synthesise two separate DNA sequences. The DNA for insulin was completely synthesised in the lab within 6 months. This gave Genentech a huge advantage since they did not have to comply with expensive regulations governing human genetic material (highest level of biological containment)
Lilly signed a licensing agreement with Genentech for $500k for worldwide marketing of human insulin alongside 6% royalty for using the tech in human insulin alone (Lilly violated this to make growth hormone and paid $150m fine to Genentech later)
Molecular biology, nucleic acid chemistry, protein chemistry were Genentech’s divisions, each quite diverse in talent
Cetus, Genentech, Biogen, Genex and Bethesda Research labs were all founded in the 70s and attracted lot of capital from VCs and other corporates (like Lubrizol, Monsanto) though none had yet made a penny of profit. Post Genentech’s listing, Amgen, Chiron, Calgene, Molecular Genetics, Integrated Genetics were created in the early 80s
Human growth hormone was extracted from pituitary glands of dead bodies so was very scarce and expensive (Kabi was leading supplier). Kabi signed up with Genentech like Lilly. For a price of $1m Genentech was to engineer bacteria to produce human growth hormone (HGH)
HGH is larger than insulin at 191 amino acids. Chemical synthesis of DNA for these would take inordinate amount of time. The approach was to partly synthesise (24 amino acids) and partly use human DNA and splice them together to form a hybrid gene
The bacteria was producing 200,000 molecules of HGH per bacterium with Genentech’s hybrid gene. The HGH was biologically active and identical to the natural hormone.
Protein chemists, process engineers and fermentation experts help with purifying the peptides synthesised by the bacteria before it is usable in clinical trials
NIH had a 10 litre limit for batch size for fermentation of peptides. To overcome this and to meet demand, Genentech worked with Kabi on continuous cycles with max of 10L
Humulin, the Genentech-Lilly recombinant insulin was the first recombinant pharmaceutical to be approved by FDA, followed by Genentech-Kabi Protropin (HGH). Within 2 decades Protropin reached $2b in sales (Genentech became profitable barely 3 yrs into operation)
Genentech partnered with Hoffman-La Roche for Interferon, Monsanto for Animal growth hormone, Merieuz for Hep-B vaccine and self-funded thymosin after their success with insulin and HGH
Biomania - investment in industrial biology totalled $150m in 1979. Deregulation helped ease of doing business in biotech field as there was no adverse impact on human health or natural environment. The scope for Interferon in cancer treatment helped Genentech’s IPO valuations
Interferon types - fibroblast, leukocyte and immune interferon - none of the structures of amino acids were known. Roche had several cell lines which would provide the invaluable m-RNA to Genentech. First two were cloned within 2 weeks and Genentech could produce them 600L facilities (Deregulation helped inc. capacity). They could produce as much in a week as was produced in a year prior (Interferon products had $2b in sales in 2005)
Diamond v Chakrabarty case - whether living organisms were patentable or not. Chakrabarty, working for GE had constructed a bacteria that could degrade crude oil. Once he won the case, Genentech’s case became stronger because its the engineered bacteria that’s patentable product. (court ruled in favour since it was not natural bacteria but something created by Chakrabarty) - a significant role in biotech
Today Hoffmann-La Roche owns Genentech (60% in 1990 and 40% in 2009 for $47b)

This is a great book for understanding peptides and recombinant DNA tech irrespective of your aptitude since it makes it very easy to understand. You will also get a reasonable idea into businesses that work on Monoclonal antibodies as well since those are large proteins composed of amino acids too but specifically for antibodies but the tech is very similar. So understanding businesses like Biocon or other companies that work on biosimilars becomes a lot easier when you understand the basics of the industry from a book like this. 10/10

phreakv6 · June 16, 2024, 4:59am

Arriving Today, Christopher Mims, 2021 - One-Day delivery depends on a lot of tech that’s recent and the book takes a look at most of it. The author follows the journey of a charger from the factory in Vietnam to his doorstep in the USA in a one-day delivery format. It helped me understand the value several businesses bring - from dredging to synthetic HMPE ropes used in tugboats, to electronics onboard ships to even the quality of paint used below waterline to metrics used in understanding efficiency of ports, port automation, Amazon’s automated warehouses, middle-mile and last mile delivery or even autonomous driving etc.

My notes -

Amazon increased its frontline workforce by 50% pushing it past a million during the pandemic
For the first time since 70s, since the oil crisis, we experienced supply shock across goods, something that couldn’t be fixed by rate cuts (like demand can) when there are goods to be had at any price
Companies like Apple, Nike set up factories in Vietnam that were identical to their ones in China much before the pandemic to cover for a war scenario when manufacturing has to be shifted within days
The Vietnam was perhaps the most skilfully managed bad idea in history - it gave rise to lot of critical tech used in modern trade
Supply of material to half a million troops in Vietnam facilitated the military contractors to accelerate the development of the shipping container
Until Vietnam war, containerised shipping with its specialised cranes, docks, railroad cars, trucks was a chicken-and-egg problem with break-bulk shipping dominating
Arrival of the internet following the evolution of containerised shipping gave rise to Amazon and eCommerce
‘93 to ‘16 proportion of Vietnamese who lived in poverty dropped from 51% to 10%. Contemporary Vietnam, like Japan in the ‘60s and China in the ‘90s is employed by foreign companies (Chinese, Korean & Japanese) to do the manufacturing with its special economic zones and cheap labour
Vietnam doesn’t use truck or trains but instead barges, hundreds of them (each carries 10-82 40ft containers) - from Mekong delta they carry coffee, flowers, coconuts, durians, cashews, rice, pork and from its factories, hyundai cars, north face, gap, uniqlo and h&m apparel as well as majority of the Samsung phones sold worldwide. Google manufactures phones and Apple its Airpods there
A 40ft shipping container can carry 25k tons of cargo (2400 cubic feet) and can allow for stacking 8 more containers on top of itself. The wall of the container is less than 3 credit cards thick, watertight and resistant to pests (walls infused with toxins)
Intermodal transports - shipping container can be transported by rail, road or ship and are hence intermodal
Drayage - trucks that connect intermodal transport - say between port and warehouse or factory to port or between ports etc.
Inland freshwater ports like Binh Duong or Dong Nai handle 673k 20ft containers a year - enough to fill a 10k container ship every 5.5 days. Most of it export goods - replacing what the rust belt once was to the US, but for the whole world
Ship-to-shore crane - as high as a 13 storey building, they load/unload containers from ship to dock or dock to ship. More cranes are used in the dock to consume, sort and stack containers in the yard. Containers typically stay in the yard not more than 3-5 days (at Cai-Mep)
TEU - 20ft equivalent. The normal container is 40ft so each container = 2 TEU
There are now only 11 shipping lines, consolidated further into 3 ocean alliances (they share ships and containers). Maerst and MSC alliance 2M controls 25% (Swiss-Italian). CMA, CGM, COSCO, OOCL and Evergreen accounts for another 25%. In 2018 152m TEU was moved in all (Cai-Mep handled 3.7m TEU in 2019. Up from 30% util in 2015 to 100% util by ‘20)
At some point in their journey 90% of world’s goods travel by ship. Bulk cargo - coal, oil, bauxite, cement, grain accounts for 90% of the 11b MT and just 20% is carried in containers
The ship OCCL Brussels is 1200 ft long and can carry 6600 containers (40ft) built by Samsung Heavy Industries (biggest in 2013). Algericas today does double that but only ships like Brussels can fit through Panama canal and ships like Algericas can only be handled by some ports in the world
Flags of convenience - while ships carry flags of the country of whose laws it obeys, countries like Panama offer low tax, low fee and lax regulations so shipping lines prefer it
The software that manages the containers in the port ensures moving, sorting, stacking is done in such a way that it takes very little time to load the ship when its in dock - as little as 24 hours (vessels used to spend weeks in port before containers)
Reefers represent 7% of containers and is growing 5-7% a year. These have to be plugged in while on the ship to make refrigeration work
Slow steaming - Large ships travel at speeds way less than their maximum to save fuel. Across the Pacific traveling at 18 knots can add a week to the journey but save 59% fuel (its the norm across industry now)
It costs just $2 to ship a TV from China to the US port-to-port. Containerised shipping is the cheapest link the logistics chain
In transportation predictability matters more than speed (Ship engines are thus built for reliability and efficiency)
Harbour pilot of marine pilot gets onboard a ship when its few miles off port. He is a local pilot who takes over the ship and knows the dock and environment very well. This is a tradition that is adhered to, to this day (had 1 in 20 chance of dying on the job while boarding the ship)
Nothing is busier than the ‘South China Sea’ in the ocean
Most ships carry two kinds of GPS - one US network and another Russian (GPS and GLONASS). An AIS (Automatic identification System) which broadcasts its name, destination, tonnage, heading and speed constantly and an ECDIS (Electronic Chart Display and Information System) and several legacy tech (since all ships don’t have latest or even AIS, pilots still use eyes to navigate)
Inter-ship communication happens on VHF and UHF radio but not always. Collisions are avoided by sticking to COLREGs (International Regulations for Preventing Collisions at Sea) which has several common sense laws - like not changing speed and heading often and the one of the port-side (left) should always yield etc. (Chinese ships often don’t follow COLREG)
Modern ships still have steering wheels but they are like toys, small, of plastic and never used
Outside of ship should continuously have its paint replaced, paint below waterline includes antifouling agents to prevent accumulation of biological matter.
Total crew of even the largest ships today is just 20-30 people. During every loading/unloading ships have to ensure cargo is distributed with heaviest containers at the bottom and weight is distributed evenly forward and backward, left and right (port and starboard)
Today’s ships are so immense that they test the limits of the port - requiring more dredging, higher bridges and bigger berths
Los Angeles/ Long Beach handles 50% of all goods destined to the US from Asia while New York/New Jersey handles 20%
Tugboats used to use steel ropes to move the ship to and from dock. Today they use HMPE ropes (High-Modulus Poly Ethylene) which is 8x stronger than steel and prevents snapback accidents (steel ropes is very elastic and dangerous when it snaps)
Trapac - Port of LA has 7 container terminals but its the most automated in the world. At 220 acres, it can store 10k containers per acre making it the densest - all automated (only 3% of shipping terminals are automated, rest use people for everything from ship-to-shore cranes, trucks, sorting and organising containers etc). It can cost a lot to retrofit automation
Half of longshoremen (people, mostly men who help move cargo on to and off the ship) make at least 6 figure salaries. Special skills like crane operators make even more. Automation takes away these jobs
Drayage Turnaround time - amount of time it takes for a trust entering the port and leaving. Trapac its 45 mins while most others its 90mins
LA/Long Beach requires cleaner fuels to be used while nearing port and for ships to be plugged into port electricity and not use ship’s fuel while docked
Cranes, forklifts etc. are all diesel operated. A switch to automation means switching these to electric as well since its easier to automate electric drive systems
Its recessions, not good times that accelerates automation - as topline crumbles in recession while wages stay same, necessitating automation to cut costs
Number of moves a crane can make is a closely watches metric for efficiency in ports. At TraPac, cranes drops containers onto concrete instead of a waiting truck (as it takes times). Instead Autostrads are used to move them on land (made by Kalmar Global) and eventually Gantry cranes move them onto railroad cars or truck
Stacking algorithms try to ensure the order in which they will be unloaded reflects the position in the stack (Erlang’s Queueing theory used extensively). At worst-performing ports, half of moves made by automated stacking cranes as “unproductive” (re-stacking or grooming). Even best algorithms suffer from unpredictability and randomness
Dwell time - avg. time a container stays in port. Its usually just 5 days
Scientific management (Taylorism) by Frederick Winslow Taylor forms the bedrock of modern capitalism and efficiency. Studying the task, breaking it down, specialising tools, training workers, division of labour and responsibilities, timing and efficiency - we use them unconsciously but it all started with Taylor (punching the clock an inevitable outcome of it)
Our world has become a large factory with methods of production employed not just in manufacturing but also in distribution (automated warehouses and logistics) and also in consumption (like a Amazon subscription for toothpaste)
Gilbreth’s kitchen island - modern kitchens where sink, stove, countertop and fridge are all intended to be within arm’s reach along with a trash can that opens with foot pedal (epitome of Taylorim)
Taylorism’s intention was to reduce human labour but it ended up as failure for that as it merely improved productivity which meant now more could be done
Cross-docking warehouses - With minimal storage, they transfer contents of containers onto trucks when trucks with containers come out of the port
President Carter’s deregulation of trucking (lowering barriers of entry) made truckers start lot of trucking companies, increasing competition, breaking trucking union. While it reduced costs and increased efficiency, truckers who were paid 6 figure salaries could now barely make wage (extremely interesting case study). This has today led to shortage of truckers (100% attrition)
Trucking regulation today ensures truckers cant drive more than 11 hours even if they wanted to. The number of hours on the move is electronically logged (caps pay for people who are essentially paid by the load)
Mississippi river carries lot more tonnage of freight than overland routes because of economics of water transport (we really must use our rivers)
Invention of tarmac led to explosion in trucks - 10k in 1910 to 2 million in 1940s and turned the fortunes of Cummins which made diesel engines for trucks (and does to this day)
The “townless highway” with its bypassing of towns, exits, crossings which was still in theory in America was executed in Autobahn giving rise to the modern highway (’World in a grain’ book if interested more)
CH Robinson - freight broker who acts as middlemen between shippers and trucking companies aggregating demand and supply (to individual drivers and their trucks) - like Uber
Trucking in extremely fragmented with largest operator not even having double-digit market share. There’s no consolidation possible since there’s no advantages to scale unlike other industries
Shippers have an edge over truckers as they can see prices on platforms and compare, making this a monopsony (its almost like having just one buyer with all shippers acting like one leaving truckers powerless in demanding higher rates)
Every trucker is best suited or has affinity for a region, condition, times of day, types of freight and shippers making a Uber-style marketplace for trucking difficult
AI on trucks (TuSimple) use IMUs, GPS, SLAM, visual, LiDAR and radar. IMUs are used in missiles, aircrafts, drones, satellites etc. and use gyros, accelerometers to determine position through dead reckoning. These trucks can run 24 hours unlike regulated truckers
Amazon has 200 semi-automated fulfilment centres (Maybe 15% of global warehouses). They use fully-automated palletising robot, pick towers, yellow totes (equivalent of shipping container in Amazon’s warehouse) etc. (implemented by Kiva systems, currently Amazon Robotics)
Kiva piloted with Staples, one of the earliest companies to offer two-day delivery, the success of which led to deals with Walgreens, Zappos, Gap and Diapers.com. Amazon acquired Kiva systems in 2012 for $775m (now they only service Amazon)
While retail had to cater to stores, Amazon had to cater to customers, and in that sense assembling an order was closer to a factory than distribution centre - so Amazon adapted to it and built today’s modern fulfilment centres
Random stow - quickest way to get goods in and out of a warehouse is to stow them anywhere without worrying about an organisational system. (Similar to how a operating system stores info on the harddisk)
Moravec’s paradox - its far easier for a computer to decide which piece to move than to actually move it (hence human level intelligence will come long before human level dexterity)
Amazon’s warehouses are intended like a local cache of goods intended for next-day delivery (not unlike a cache in computing). Amazon started charging fees to sellers that didn’t move inventory fast enough (its equivalent of LRU?)
Turnaround time from order is received to when its on a truck leaving the fulfilment centre is just 45-120 mins
Consolidating smaller items into as few deliveries as possible is the job of Amazon Fulfilment Engine (AFE). All totes of a single order end up at same rebin station (picking, binning, rebinning, packing are standard warehouse terms used across industry)
SLAM robot (Scan, Label, Apply, Manifest) works with boxes and applies shipping labels (boxes are automatically chosen by the AFE). From there it goes to a loading dock and gets stacked into a truck which is on its way to a sortation centre
Bezosism (Amazon’s brand of Taylorism) - mix of surveillance, measurement, psychological tricks, targets, incentives, sloganeering and prop. tech., rank-and-yank (blue-collar equivalent of Jack Welch’s stack ranking)
Coffee and ibuprofen (!!) are free in Amazon warehouses (available freely in vending machines)
When six-sigma fell out of fashion with GE going down, kaizen (continuous improvement in lean production) took over the vacuum to fill the next management fad
Middle mile - UPS founded in 1907 has built its network for over 100 yrs. FedEx founded in 1971 has almost matched UPS (closely matches in revenue and scale). FedEx earns higher margins moving high-value overnight packages (together they have 80% market share and rest is with USPS). Amazon Logistics today is bigger than UPS
Most middle mile logistics companies buy sorters, conveyers, scanners, tugs etc. from same companies. Middle mile automation is lot easier than a fulfilment centre.
Sortation centre - takes packages from semi-trucks unloaded from 56 bays and loads onto 240 end-points with smaller delivery trucks (FedEx operations)
Starship robot (last-mile delivery robot) has 360 deg. cameras, time of flight cameras and can do 3000 miles before needing maintenance (can delivery food, coffee etc. in college campuses and other closed environments) and generates $4/hr in revenue ($15000 in annual wage)
Enclothed cognition - How what we wear affects how we perceive ourselves, behave, how creative we are and how we process information and how we perform on tests (once you were a UPS driver uniform for eg.)
UPS drivers make 135 stops a day (max 160) in a single 10-12 hr shift with only one break for lunch
UPS loads its trucks in such a way that you should never touch a package more than once before making delivery (preloaders do this), stacked in sequential order, labels facing out
UPS’s On-Road Integrated Optimization and Navigation (ORION) system plots route for driver, minimising turns, ensure routes stay similar everyday (makes drivers happy) etc. (ORION cost UPS $200-300m)

I learnt so much stuff from this book. It is written in a simple language and will definitely help you map out logistics and its tech well. I also liked the fact that the author kept biases to a minimum - celebrating capitalism while also looking at its dark side on human beings through his detailed look on Taylorism/Bezosism and how it has changed how we think and act. It truly is multi-disciplinary since it doesn’t shy away from looking little deeply into the tech of fulfilment centres or delve deeper into psychology and philosophy where required. It was a balance I could relate to. 11/10

avthakkar · June 17, 2024, 2:52pm

From master class with super investors

Ramesh Damani

When a bull market gets over, the leaders are squashed completely.
Great opportunities come rarely so when they do, bulk up the truck
Another thing great investors do is that they don’t hesitate from averaging up!
No one rings a bell when there is a great idea. Actually, if people doubt it and disparage it, you are onto a good idea. There has to be scepticism in buying. If everyone applauds you: it’s probably not a good idea.

Similarities between the investors

Between the Ramesh Damani sir and Raamedao Agarwal sir

integrity
Tons of reading everyday
Never leverage in life
Always optimistic and bullish. Buy the bear market and have faith! Be lucky to be born in India. The opportunities in the next 20 years will always triumph the ones in the past 20 years.
Very hardworking obviously
Emphasis on the 100 bagger! A big idea comes once in 3/4 year which is the defining moment. The rest of the portfolio are just there.
The most important criteria: business has to double in 3 years otherwise not interested!

A key difference

Raamedo agarwal topped up his 100 bagger Hero motorcorp.

Rajashekar Iyer

when economies do well, all companies do well but when the growth stalls, big companies cope better!
Doesn’t believe in averaging down! Because we can’t always be right and the information we have is incomplete so it’s good to accept that and wait for market confirmation.?
Only two people can afford to not look at stock charts: one with 5-10 year horizon view such promoters and the other who has a continuous flow of funds. They have funds to buy drawdowns and hence can buy good businesses. People who have limited capital are in a box and they can’t afford to lose a big capital in drawdown and hence becomes important to sells these businesses when they get sell calls.
Two types of errors: TYPE A and TYPE B. A is when you buy stocks you shouldn’t have and B is when you don’t buy stocks you should have. B is fine because there are unlimited opportunities and they will keep coming but A is not because capital is limited and that needs to be protected. So don’t buy at expensive valuations
just cheap valuations don’t matter. There is no trigger for the market to rerate the company and the company’s opportunity also does not expand.
how to define the quality of management: for a cyclical business, see how they manage the downturn.
the stock that gave great returns over 10 years also gave good returns on day 1. The fundamentals should have already turned around and growth triggers should be present. Key to big success: deep value, immediate growth triggers and big long term position

Anil Goel

one can not sustain producing below the cost of production for long, so normally it marks the bottom of the cycle! Very important for understand cyclicals

My note: it’s like purely competitive markets in economics, you can’t differentiate and hence are the same products. If it leads to overproduction than the price goes down to price of capital/production and some more. Eventually people get out of business and oversupply restores to equilibrium.

Hiren Ved

To tackle laggards, check them on a relative basis, if they do not perform well for 6/9 period and remain laggards, there is something up and should be looked at.
1-2 laggards in a 20 stock portfolio is fine but 3/4 is not and hence needed to be looked at
If it’s 4-5, you have to sell 3 and keep 2. You decide which two

Two most important aspacts of successful investing: reading and reflecting
Two problems for bright people: lack of discipline and lack of self awareness

Kenneth Andrade

if the ROE is like 30-35% and incremental ROE does not grow, then it only increases the downside of the business
It EV/sales and market cap/ sales is one but the PE is elevated at like 20-30 PE that means that business isn’t earning enough. Look at the cycle it’s in and see how can bring an uptick to its earnings. And this will be the case with the industry at that time so look for market leader with low debt.
Seen time and time again that the most depressed sector turns out to be quite profitable.
Doesn’t believe in structural or cyclical businesses, and does not look at sectors. It’s all about capital efficiency
Chooses business quality over management quality
Sees everything in cycles, cycle in interest rates, macro trends, micro trends, real estate, business earnings. Everything is a cycle if you spot it.
Prioritise not losing money over making money. Find cheap valuation beaten down good quality stocks, and buy them when they are bottomed out. Chances of losing money aren’t much
Cycles are disrupted by technology disruptions

Vijay Kedia

Management is very important for Indian businesses, and even more for small businesses
Selling shoukd be merciless, if your thesis breaks: sell ruthlessly.
If it’s a doubler in three years, WONT invest: has to have a potential of being a ten bagger.
Uses observation as a key screen to filter stocks.
Three things to evaluate management: honesty, hunger and smartness.
Primary importance is growth for valuations
Buys sub 10 PE businesses. And invests in high PE with expectations of no growth for the first year or so.
If your stocks are falling and market isn’t, something to worry and when market is at 52 week high and your stock isn’t, be very worried
Views on Macro: sector specifc

Shyam Shekhar

very ethical in terms of approach and believes in high quality business and management
Balance sheet triumphs over P&L statement. Focusing on P&L over balance sheet means you have to pay a premium. It’s a lagging indicator. A BS statement will triumph over others because you start seeing material changes that and these will reflect on P&L statement later.
Getting value addition from the market is better than a stakeholder. For example: Selling a product at the same price despite of falling RM prices or increasing pricing by various methods.
Gives strong importance to working capital. Uses it to sense the direction of a business
Idea generation is theme based, finds a theme and then invests in business that suit that theme

phreakv6 · June 18, 2024, 6:33am

Heads in Beds, Jacob Tomsky, 2012 - The author (not his real name) has worked in the hospitality business from being a valet to the guy who checked you in or out, to running housekeeping. You get an insiders view of how a hotel functions, from the nitty-gritties of how minibar is replenished or accounted for, to how a bellman works/thinks, to how frontdesk staff can be influenced into giving you a good price or upgrade or even the way the top management runs the hotel and what their priorities are.

Some of the useful things I found - Its easy to get charges waived - especially charges where there’s no real cost/low cost to the hotel. Tip the front-desk staff “before” they give you a room (he works for you now) - but hang back and find the right agent before you do - the one who is most bored but also efficient knows the system well and is likely not a new hire. Make sure you memorise the name, if you are a regular and so on. Be sympathetic because very likely most of the staff is overworked. The bellhop for eg. relies a lot on the tips to supplement his earnings. Don’t be on the phone while you check-in, don’t plonk your card and don’t treat service staff as servants etc.

The perspective of a front-desk agent gives you a slice of the world that is unique and there’s very good observations on the kinds - from families on vacation to business travellers to large groups and even celebrities (author has very good things to say about Brian Wilson of The Beach boys). The book was a breeze to read as it was humorous and includes a host of colorful characters that you could connect with and root for - almost as if it were fiction. I could see a lot of Bukowski influence in the writing (from something like ‘Factotum’ which is a big fav of mine). If you are having trouble starting/resuming reading, or come from reading fiction with no exposure to non-fiction, a book like this is ideal way to get started. 8/10

phreakv6 · June 18, 2024, 8:42am

Chai Chai, Biswanath Ghosh, 2009 - Of late have been reading several travel books and this was one of them. Thanks to this book I was introduced to the genre and Paul Theroux books (yet to read) that the author speaks very highly of. This book documents the author’s travels in Indian trains without any objective or destination in mind - travel for the sake of traveling.

There is however a sort of a common theme here - the author is fascinated by junction towns - the ones we all know and have heard of but with certainty have never gotten off at - towns like Itarsi, Jhansi, Mughal Sarai, Shoranur, Guntakkal, Jolarpettai and Arakonam. Generally these towns have nothing much to offer with their entire occupation centred around the station with food loaded to the trains or coaches getting cleaned.

You get a sense of the station itself, the hotels and shops that surround it, the people who make a living in and around the stations, an exploration of the town on foot to its non-railway heritage, if there is any, local food, a drink or two at the local watering hole getting pally with the local clientele at the bar and making friends. The language barrier and perhaps the lack of watering holes make some towns seem more boring than the others (Jolarpettai and Arakonam for eg.).

I would excuse this though as the book is entertaining otherwise and brought back memories of my trips from Chennai-Delhi in TN-Express and occasionally in Grand Trunk Exp. where I have come across some of these junctions like Jhansi and Itarsi and have seen the country, people, food and culture change every few hours. As a travel book I would think it achieved the objective. 7/10