Tuesday, January 22, 2019

22 Jan 2019: Interesting Article I have read today

Webinar organised by CARE Ratings on Foreign Portfolio Investments (Youtube link)

Its always better to read / listen to rating agencies on their sector views rather than brokerage report which are biased and content is more tilted towards their investment thesis and has less content on sector.

Inside NJ: India's largest mutual fund distributor (Article link)

Neeraj Choksi and Jignesh Desai, founders of NJ India, share with us their two-decade journey, which saw NJ become a network of over 26,000 distributors managing more than Rs 45,000 crore through a network of over 26,000 distribution partners. MUST READ

Both of them makes sense in their reply. Specifically on clients going for direct plans, he says

"Look at it this way - much medicinal information is available on the internet but that doesn't mean we stop going to the doctor. Ultimately, the conviction of your advisor is very important"

Real Vision video on "Crisis Building In Auto Sector | The Big Story | Real Vision" (video link)

Not sure how many are tuned to the free videos of Real Vision, I find it useful to get a global perspective on macro and sectors. This video highlights stress in Auto sector.

How I choose what to read

Interesting tidbits on reading. Time is scarce, so you can't read everything. You have to make tradeoffs. As you choose what to read, you walk a balance between thinking differently and knowing more than others.

Some tips on how to choose what to read are shared in this article by David Parell:

  1. Trust Recommendations — But Not Too Much:

"Don't trust what everybody in society is reading. Trust what the people you respect are reading instead. Find people whose recommendations you trust and read what they recommend"

  1. Tame the Thrillers:

"Seek thoughtful, opposing views from thoughtful people whose thought processes you respect"

  1. Blend a Bizarre Bowl

"It's usually better to attack a subject from all sides than to attack it directly"

  1. Trust the Lindy Effect (more on this below)

  1. Favor Biographies over Self-Help

Biographies are written about outliers. The best biographies are the ones the subject doesn't approve of. Life is messy and complicated. A good biographer tells a fair and balanced story — they balance the good with the bad. Through biographies, you explore the cost of ambition and the price of success.  You don't just learn about a person. You learn about their time and place. Let biographies age before you read them. In general, the older biographies are better.

Heard of "Lindy Effect"?

Continuing from the above blog post made by David Parell,

The Lindy Effect says that the future life expectancy of non-perishable things like books is proportional to their current age. For every period they survive, As Nassim Taleb once wrote: "If a book has been in print for forty years, I can expect it to be in print for another forty years. But, and that is the main difference, if it survives another decade, then it will be expected to be in print another fifty years. This, simply, as a rule, tells you why things that have been around for a long time are not "aging" like persons, but "aging" in reverse. Every year that passes without extinction doubles the additional life expectancy."

If you read what everybody else is reading, you'll think what everybody else is thinking. Have a bias for books that would push most people away, especially if they are still in print after many years. These books are either too long, too difficult, or too counter-intuitive, but they will likely contain information that will give you an edge.

We're stuck in a violent and continuous storm of news. The vast majority of news has no informational value. It's entertainment, with a veneer of importance.

As Naval Ravikant observed: "The Internet commoditized the distribution of facts. The "news" media responded by pivoting wholesale into opinions and entertainment."

Avoid 99% of the news. If the news is significant, the information will find you. Don't believe me? Try reading last year's newspaper. If you do read news, read old news.

Friend Savi Jain of 2Point2 Capital makes a important point in his tweet

This picture from a news article clearly conveys why there is no private investment in Indian Infrastructure projects


As IMO 2020 lures newcomers to bunker sector, profit is far from guaranteed: Fuel for Thought (Source)

"But outsiders coming to this industry for the first time in the run-up to 2020 will need to be wary. The bunker and shipping industries are anything but simple, and involvement with them is not for the faint-hearted"

Few players (like Vistin) burned their hands in trying to be first mover. However, they made an interesting presentation on their logic..am sharing some slides from it.

Disclosure: I am still grappling with this industry and am not an expert.

Request you to please share any interesting articles you read and which I could also feature on this blog.

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