Tag: reading

Sunder’s List: Luck by Chance

Roundup: S&P -0.36%, Dow -0.41%, Nasdaq -0.26%, Gold $1246.70, London -0.25%, Germany +0.10%, France -0.09%. At pixel: Nikkei +1.64%, Hang Seng -0.49%

Note the reversal of fund-flows before and after the “no-taper” decision (FT):
IIF11-e1384893547342

A huge chunk of the time we spend online is spent consuming stuff that we don’t pay for. Economically, this makes for an odd situation: digital goods and services are everywhere you look, but their impact is hard to see in economic statistics. (NewYorker)

No budget for booze: India’s liquor companies have seen growth slide for three years in a row because of increasing prices and slowing economic expansion. Last year, rising prices and regulatory changes in key states resulted in a surprise drop in the demand for vodka, once the fastest growing liquor in India, with drinkers moving to cheaper alcohol such as brandy. (LiveMint)

Ajay Shah on the Bangalore ATM attack: When a policeman says that the police cannot deliver safety, I would suggest that the policeman should resign. If you can’t deliver safety, don’t be in the police. (AS)

Michael Wheeler on the luck factor in great decisions: Once we acknowledge how much depends on luck, we do two things differently. First, we study decision making differently, no longer assigning brilliance to every decision that, viewed retrospectively, worked out well. Second, we might focus on different skills as important to important decision points, such as the flexibility to capitalize on changes in luck versus the ability to predict in advance how things will play out. (HBR)

Good luck!

Sunder’s List: Uncertainty

Roundup: S&P -0.20%, Dow -0.06%, Nasdaq -0.44%, Gold $1273.70, London -0.38%, Germany -0.35%, France -1.12%. At pixel: Nikkei -0.14%, Hang Seng +0.30%

Regulators around the world are examining alleged abuses of a number of financial benchmarks by companies that play a central role in setting them. And now we find out that gold prices are manipulated. (Bloomberg, #gold) [stockquote]GOLDBEES[/stockquote]

NSEL Scam Update: EOW will attach properties of Jignesh Shah, Joseph Massey and all other NSEL directors. Plus, a hint of insider trading in the latest FTIL sale of its Singapore subsidiary. (LiveMint, LiveMint) [stockquote]FINANTECH[/stockquote]

Its not only India that have warehouses overflowing with food and vermin. The USDA had to purchase locally manufactured sugar as Mexico continued to export it into the US. (WSJ)

Growth tends to mean-revert, don’t get taken in by “Asiaphoria”. “In neither country [China, India] does investor confidence rely on rule of law.” (WSJ)

Uncertainty

A big part of investing is understanding your own behavioral shortcomings. All investing decisions are taken under a cloud of uncertainty:

Warren Buffett, the famed value investors, poured $3.4 billion into Exxon Mobil, the world’s largest oil producer. (USAToday) Short-seller Jim Chanos thinks that its a “value trap” as cash flows decline and return on capital slides. (Reuters)

Most of us overrate our own capacities and exaggerate our abilities to shape the future. Advisers face a peculiar problem: Their plans and proposals must be approved by their clients and they have a stake in getting that approval. This dynamic leads to their tendency to understate risk and overstate potential. (ATM)

The irony: Economic growth comes from employing labor and capital more efficiently. That comes from people working hard and innovating. Each of these requires motivation. Thus, motivation is the foundation of success. What drives motivation? The need to resolve uncertainty. In other words, the opposite of guaranteed security. (QZ)

Good luck!

 

Sunder’s List: Bubble Watch

Roundup: S&P -0.37%, Dow +0.09%, Nasdaq -0.93%, Gold $1272.90, London +0.45%, Germany +0.62%, France +0.66%. At pixel: Nikkei -0.76%, Hang Seng +0.20%

Jim Rogers: “the most important economic event of the next 10 to 20 years is what happened in Beijing.” (WSJ)

Speaking of China, they have crushed India’s balloon industry. Around 60 to 70% of the balloon sales is currently dominated by the Chinese products. “Most of the Chinese units are automated and are able to produce on a mass scale and sell cheaper. Our units are mostly labour intensive.” (ET)

Jewellers across India are in no mood to listen to finance minister Chidambaram’s request to suspend manufacture and sale of gold coins in the country. (ET, #gold) [stockquote]GOLDBEES[/stockquote]

Raghuram Rajan, has promised to carry out a “dramatic remaking” of the country’s banking sector. “We could have wholesale banks, we could have mobile [phone] companies doing some banking activities, within certain constraints. We could have small banks, which we currently don’t allow, and we could allow co-operative banks.” (FT)

Bubble Watch

There has been a lot of talk recently about whether we are in a bubble. What do you think?

CLSA: “The Indian story is not a great investment story until we see hard evidence of investment cycle resuming.” “The India currency will depreciate to 67-70 levels against the US dollar” (ET)

Are Asset Bubbles the Only Road to Growth? (WSJ)

Janus: Valuations for cloud computing and social media companies have risen to dot com-era levels. (WSJ)

GMO: S&P 500’s fair value is 1100, about 40% below Monday’s closing level, and the expected return is -1.3% a year, after inflation, for the next seven years. (WSJ)

Mark Hulbert: 5 ways to know you’re in a bubble. (MarketWatch)

Good luck!

Sunder’s List: The Robots are Here

Roundup: S&P +0.21%, Dow +0.36%, Nasdaq +0.33%, Gold $1287.40, London +0.41%, Germany +0.21%, France +0.19%. At pixel: Nikkei +0.05%, Hang Seng +1.93%

SEBI plans to announce stringent rules that will make it incumbent upon companies to make disclosures relating to fraud, litigation against senior executives and their financial implications. (ET, #SEBI)

Global gold demand fell to a four-year low in the third quarter. “Technically, the bull run is over because we are going to have a down year for the first time in 13 years.” (FT, #gold) [stockquote]GOLDBEES[/stockquote]

ABG Shipyard, the Indian group, has told shareholders that “problems” servicing its loans in a timely manner have led it to seek a debt restructuring agreement with its lenders. (FT) [stockquote]ABGSHIP[/stockquote]

Canada’s financial services firms are under pressure to create more jobs in the country amid rising unemployment rates and may have to wait till at least the middle of 2014 before farming out work to Indian software services providers. Canada’s banks and financial services firms outsource software and services contracts worth $10 billion a year. (LiveMint, Software Sector)

Corporate results have been better than expected, but analysts say it may take 2-3 quarters to build confidence. (LiveMint, #economy)

Worldwide annual shipments of industrial robots have more than doubled in the past decade. South Korea is experimenting with robotic prison wardens that patrol and report inmates who do something wrong; Japanese restaurants are deploying fast-food robots to make and serve sushi. Meanwhile, lower-level tasks are now being automated by software programs. Automation and other productivity improvements are expected to have eliminated 2.2 million business-services jobs in the United States and Europe from 2006 to 2016, at a rate of about 200,000 jobs annually. (Politico)

Good luck!

 

Sunder’s List: #AskJPM #badidea

Roundup: S&P +0.81%, Dow +0.45%, Nasdaq +1.16%, London -1.44%, Germany -0.24%, France -0.56%. At pixel: Nikkei +1.40%, Hang Seng +0.67%

#marketing gone bad: J.P. Morgan’s attempt to gather questions on Twitter for a star investment banker turned into a #badidea. The hashtag got hijacked, with questions ranging from “Which Twilight movie is your favorite?” to “Did you always want to be part of a vast, corrupt criminal enterprise or did you ‘break bad’? (Twitter)

Mr Rajan: “There is no fundamental reason for volatility in the value of the rupee. As explanations we are left with fears about what others will fear and do as an explanation for what is going on.” (FT, USDINR)

Forget about taper. Prepare for more QE. Yellen: “Unemployment … is still too high … At the same time, inflation has been running below the Fed’s goal of 2% and is expected to continue to do so for some time. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.” (Fed)

Do you remember peak oil? “The reason why no new significant oil deposits were discovered in the 1980s and 1990s is because… at $20 a barrel it did not make any economic sense to go out and try and discover new oil. In hindsight, you drive oil to $147 barrel and lo and behold, five years hence the world is swimming in oil. It really is that simple.” (FT)

And the US shale juggernaut continues to roll on. Bakken Shale, is about to start pumping 1M barrels of crude per month by December. Eagle Ford Shale in south Texas, hit the 1M/month milestone this past May, while the Permian Basin got there in May 2011. (SA)

The basic-income movement: give everybody free money. Why? Because it is “coherent and harmonious,” with a dash of “beauty” thrown in. Every month, every Swiss person would receive a check from the government, no matter how rich or poor, how hardworking or lazy, how old or young. (NYT) We call it “government job” in India.

Good luck!