Reading across disciplines is one of the best ways to improve our investment acumen. Here is a summary of some of the best articles I read this week.
I especially try to not post Corona related articles as that is all one gets to read in all traditional media.
If you like this collection, consider forwarding it to someone who you think will appreciate.
The Lifecycle of Information
Whenever we point to “information abundance,” what we are really saying is that we have “endless opportunities to react to data.” Whatever we want to engage with and process will be there at a moment’s notice. Whether it’s a 30-minute TV news segment or a never-ending Twitter feed, we will be able to see what we want to see, and toss out the things that we find questionable.
Whenever we come into contact with some objective fact or event, it moves so quickly across these stages that it’s essentially unnoticeable. When we read something in the news, we don’t ponder whether this is data or information, and whether or not we want it to influence our outlook on a given subject. All this happens instantaneously, as if the transmission of data and the processing of it occur simultaneously.
Reasons why a stock is hated – lecture notes from Joel Greenblatt
There are four reasons why a business is hated which results in its stock price being hated.
Those 4 reasons are:
1. The business is unsustainable
2. The business has a bad balance sheet
3. The business is cyclical
4. The business is dying
The history of soap
Ancient Mesopotamians were first to produce a kind of soap by cooking fatty acids – like the fat rendered from a slaughtered cow, sheep or goat – together with water and an alkaline like lye, a caustic substance derived from wood ashes. The result was a greasy and smelly goop that lifted away dirt.
By the Middle Ages, new vegetable-oil-based soaps, which were hailed for their mildness and purity and smelled good, had come into use as luxury items among Europe’s most privileged classes. The first of these, Aleppo soap, a green, olive-oil-based bar soap infused with aromatic laurel oil, was produced in Syria and brought to Europe by Christian crusaders and traders.
In 1879, P&G introduced Ivory soap, one of the first perfumed toilet soaps in the U.S. B.J. Johnson Soap Company of Milwaukee followed with their own palm-and-olive-oil-based Palmolive soap in 1898. It was the world’s best-selling soap by the early 1900s.
Sound of Silence
Learning when to speak, and when to keep silent, is an art that the best retailers are masters of. To listen carefully, marketers need to ask the right questions, and thereafter keep a true and open silence, in listening deeply to the answers. There are moments when consumers go very silent because they are happy, or satiated, or both. Marketers should learn to capture these beautiful moments of silence, and the accompanying emotions, in various touch points of their brands, including communication or packaging — because this can resonate deeply with consumers who have felt exactly that way, so many times.
When consumers reject a product, or totally give up on a brand, they tend to go totally silent, because their involvement has just ended.
Stop and ask why
“It takes a very long time to become young,” Pablo Picasso once said. Adults miss the innocent curiosity of their youth; artists strive to reclaim their lost childlike creativity. The creative process often feels like a constant battle between an inner child and an inner critic. Being young is being curious: on average, children ask 107 questions per hour. But, as we grow older, we start accumulating factual knowledge, practical shortcuts, and mental models to make decisions faster. In a society focused on speed as a measure of performance, we look for the quickest path to achieve our goals. We prioritise so much knowing how and how fast we can get to the desired outcome, we forget to stop and ask why during the journey.
Disclaimer: Abhishek Basumallick is the Head of the equity advisory www.intelsense.in for long term wealth creation and a pure quant focused newsletter at www.quantamental.in. The blog posts should not be construed as investment advice. Please do your own due diligence before investing.