Misc

Miscellaneous is often where the gems are.

Misc

Cartels

  • Cartels have been a feature across the world.
  • Cartels lead to prices for consumers and businesses that are higher than they would be if competition prevailed – they overcharge.
  • The chart shows on average overcharging has been 34%.
  • North America stands out with some very large overcharging cases by cartels (the mean is a lot higher than median).
Misc

European Cloud

  • European nations are starting to realise that they might have lost the next race – cloud technology.
  • Cloud technology is a huge enabler as we have written about before.
  • The EU are now starting, in typical fashion, the fight back.
  • This is reminiscent of how in 1967, fearing the rise of US aviation, an agreement between Germany, France and Britain (notice the absence of the latter from the current proposal) to join forces in technology gave birth to Airbus.
Misc

Biology

  • A fascinating piece from a16z, the US venture capital firm, on biology.
  • They run a $650m Bio fund and invest in many new technologies.
  • “Bio today is where information technology was 50 years ago: on the precipice of touching all of our lives. Just like software—and because of it—biology will one day become part of every industry.” 
  • Lots of links within to articles (written by a16z) on various aspects of how healthcare is transforming.
  • This piece is a shout out to the now famous 2011 article by a16z “Why Software is Eating the World”.
Misc

Business Tactics

  • Sometimes one finds lessons for business tactics in unlikely places.
  • This is a brilliant article on the drug trade in the UK.
  • “Mohammed Qasim, a research fellow at Leeds Beckett University who studies drug dealers, described the Albanian business approach as “fantastic”, adding: “If they were on Dragon’s Den with this model, all the dragons would be giving them money.””
Misc

Woodford

  • Adrian Lowcock, head of personal investing at Willis Owen, summed it up when he told the Financial Times: “We have seen the complete demise of the most famous fund manager the UK has seen for years… This collapse is on a par with the implosion of New Star at the height of the financial crisis, and it will shake the funds industry to its core.”
  • Source h/t Alphaville
  • We think this article is unfair (1) It was not just a few lone journalists but many fund managers, often in private, voiced concerns about Woodford especially the use of a barbell approach, high % of illiquid (or private) investments, use of leverage, high % ownership in shares, complicated holding structures etc. (2) The industry has suffered because of Woodford and has not gained. In any way. (3) The pressures described are not new and regulation has relentlessly moved in the direction of reforming the industry. It is not flawless.
  • Big read from FT on Woodford.
Misc

Negotiations

  • Seriously interesting article on Calouste Gulbenkian and negotiating.
  • If you haven’t heard of him he was the richest man in the world in the 1950s by virtue of negotiating “5%” royalties on Middle Eastern (especially Iraqi) oil developed by western companies.
  • Lessons include never put all demands upfront but make demands step by step, often right at the last moment.
  • Make agreements so complex that non one will dispute them later.
Misc

Nutrition and CO2

  • A fascinating piece on how the nutrition of the world’s plants is changing because of climate change.
  • “Across nearly 130 varieties of plants and more than 15,000 samples collected from experiments over the past three decades, the overall concentration of minerals like calcium, magnesium, potassium, zinc and iron had dropped by 8 percent on average. The ratio of carbohydrates to minerals was going up. The plants, like the algae, were becoming junk food.“
Misc

Academic Publishing

  • Academia is the source of a lot of the world’s basic knowledge.
  • In this really interesting piece two academics analysed a database of 120 million academic publications from 25 million authors.
  • They found some very interesting conclusions.
  • Papers have become shorter, while features that attract readers – like titles and abstracts – have gotten longer (academic clickbait).
  • There is a huge increase in new authors and they publish at a much faster rate (see chart).
  • Overall these results support Goodhart’s law – any measure will eventually become a target.
Misc

How do people get new ideas?

  • In 1959 a scientist asks Isaac Asimov to join a project to develop the most creative approach possible to a ballistic missile defence system.
  • Asimov eventually declines, but leaves one contribution – a wonderful essay on creativity.
  • Full of lessons that can be applied to investment meetings. Such as:
    • Meet in a relaxed place.
    • Meetings shouldn’t always involve the same people.
    • No more than 5 people per meeting.
    • Try not to link pay to generating ideas – instead link it to executing ideas/tasks.
Misc

Pressure Point Theory

  • Often peak noise tends to lag the underlying trend that caused it.
  • Worse the trend is often already receding when noise picks up.
  • A great example is the refugee situation in the EU.
  • This is a chart (source: UN) of arrivals into Europe by land and sea.
  • Although the numbers peaked in the autumn of 2015 the noise still continues.
  • This is important for investing – next time you find yourself pondering noisy news flow, ask yourself – what is the data saying? What is the underlying trend doing?
Misc

Spaced Repetition

  • Ever wonder what the most efficient way to learn something is?
  • This fascinating piece argues that the best approach for long term memory retention and learning is spaced active repetition.
  • The idea is to actively (i.e. asking a question) recall information at ever increasing intervals, using software to help timing.
  • As the chart below shows – cramming (massed repetition) works well in the short run but for the long run spaced repetition wins.
Misc

Great Ideas

  • Something to think about in relation to investing. Original ideas.
  • “Coming up with a genuinely original idea is a rare skill, much harder than judging ideas is. Somebody who comes up with one good original idea (plus ninety-nine really stupid cringeworthy takes) is a better use of your reading time than somebody who reliably never gets anything too wrong, but never says anything you find new or surprising.”
  • From a good article.
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