Author: shyam

The Fundamentals of Market Tops

1. The Investor Base Becomes Momentum-Driven
2. Valuation-sensitive investors accumulate cash
3. The quality of IPOs declines
4. There is a high degree of visible and/or hidden leverage
5. Elements of accounting seem compromised

The Fundamentals of Market Tops

Three Steps to Effective Decision Making

1. Understand causality
2. Improve forecast – inside vs. outside view
3. Sorting relevance – integrate new information

How do you increase luck?

1. Monitor the environment for new uses for your existing resources
2. Experiment with resources at hand
3. Ask for more than you can reasonably expect
4. Network to increase serendipitous connections

Stroke of Luck

The ghettoization of China’s new towns

The idea:
Consolidate the villages into one new town that would take up less than one square mile, versus the three square miles that the dozen villages had occupied. A portion of the remaining 59 square miles could be sold to developers to pay for construction costs, meaning the new buildings would cost farmers and the government nothing. The rest of the land would stay agricultural, but worked by a few remaining farmers using modern methods.

Reality:
The villagers ended up with less than the space they were living in previously and they found themselves unqualified for the jobs around where they lived. Shoddy construction means that the apartments are barely habitable. One term that residents repeatedly use is “biesi” — “stifled to death” in the new towers.

New China Cities: Shoddy Homes, Broken Hope