The Low Hanging Fruits of Sensible Investing

In 2018, over eight lakh people died of cancer in India. Disturbing but not shocking. What’s shocking is that if you visit the Tata Memorial cancer hospital, you will find the longest queue in the lung cancer department. Numbers attest to this observation. According to figures published on Cancerindia.org.in, close to 40 % of all cancer deaths were accounted for by tobacco use (smoked and smokeless).

The reason I call this statistic shocking is that 90 % of lung cancer cases are preventable. The biggest impact solution in cancer research isn’t about finding a cure for the disease but discovering a method that can convince people to quit smoking.

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What We’re Reading

There is one activity that an investor can never over do — reading.

But it’s important that you read things that build your knowledge and help you make better investing decisions. Avoiding the noise is as crucial as reading the timeless stuff.

In this post, we’re sharing few good pieces that we came across this week …

When tech knows you better than you know yourself

Harari says, “I would say that, get to know yourself much better and have as few illusions about yourself as possible. If a desire pops in your mind don’t just say well this is my free will. I chose this therefore it’s good, I should do it. Explore much deeper. Secondly as I said join an organization. There is very little you can do just as as an individual by yourself. That’s the two most important pieces of advice I could give an individual who is watching us now.”

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What We’re Reading

There is one activity that an investor can never over do — reading.

But it’s important that you read things that build your knowledge and help you make better investing decisions. Avoiding the noise is as crucial as reading the timeless stuff.

In this post, we’re sharing few good pieces that we came across this week …

Stop Giving Investment Advice

So my advice is: take advice with a grain of salt. Especially at the early stages, where it’s more art than science. Get comfortable operating with a lot of variability and learn to trust your instincts.

 

An Opportunity Slowly Fading Away

A basic tenet of long-term investing is to look for high quality listed businesses. This essentially implies 1) they earn returns above cost of capital (reflected by return on capital employed), and 2) generate strong free cash i.e. they don’t require a lot of capital (fixed assets and/or working capital) to grow revenues and profitability. Those retained earnings can then be utilised either to acquire other companies in same line of business or diversify. Alternatively, excess capital could be returned to shareholders via dividends or buyback.

But have you ever wondered why would a promoter of such a business list his company as it involves diluting a significant chunk of his ownership to minority investors?

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The Perpetuating Forces of The Capitalist Creed

How do you measure the size of an economy?

GDP, right?

By that measure, US is the biggest economy in the world today with GDP in excess of $20 trillion. That’s the total value of the goods and services the country produced in FY17. The churn out of that kind of produce was achieved on the foundation of $12 trillion of national debt.

It’s not surprising to anyone that largest economic powerhouse runs and grows on the engine fuelled by debt.

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The Rise of Investing Centaurs

Napoleon Bonaparte, the Emperor of France, is considered one of the greatest commanders in history, and his wars and campaigns are studied at military schools worldwide. But in 1809, he was defeated. Not in a war but in a game of chess. Bonaparte was a military leader, not a chess grandmaster so his defeat in chess shouldn’t have come as a surprise except that he lost against Mechanical Turk — an Automaton Chess Player.

Mechanical Turk was the brainchild of Wolfgang von Kempelen. The Turk won most of the games played during its demonstrations around Europe and the Americas for nearly 84 years, playing and defeating many challengers including statesmen Benjamin Franklin. Read More

How To Get Things Right

What could be the worst nightmare for the parents of a toddler?

In a small Austrian town in the Alps, a mother and father were strolling in the woods with their three-year-old daughter. The parents lost sight of the girl for a moment and that was all it took. She slipped into an icy fishpond. The parents frantically jumped in after her. But the pond was dark and it took them thirty minutes before they could find her at the pond bottom. Eight minutes later when the rescue team arrived, the girl’s condition wasn’t good. She was unresponsive with no pulse and no sign of breathing. Her pupils were dilated and unreactive to light, indicating cessation of brain function. She was gone.

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