HAPPY NEW YEAR to all the readers!
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 it.
appearances, make us happy
Most of us try to
make decisions intended to bring us greater happiness. The problem is that we
misunderstand how our choices really impact our well-being and end up making
ones that have the opposite effect. We buy stuff that purports to inspire
happiness and end up feeling depressed instead. Knowing some of the typical
pitfalls in the search for happiness—especially the ones that seem to go
against common sense—can help us improve quality of life.
It’s an old adage
that experiences make us happier than physical things. But knowing is not the
same as doing.
We maximize our
chances at happiness when we prioritize our experience of life instead of
acquiring things to fill it with.
Keep it Simple: Aditya Puri
I have been a big fan of Aditya Puri. He is without
doubt one of the greatest bankers in the world along with being a tremendous
institution builder. A true legend. An interview with McKinsey.
Noting that HDFC
Bank delivered total shareholder returns of more than 16,000 percent under
Puri, the Economist suggested that he might be the “world’s best banker.”
To hear Puri tell
it, HDFC Bank’s success comes from keeping its business simple by hewing to its
founding principles: customer focus, risk management, technology-led
innovation, and a “first among equals” culture.
We developed a
standard rule that we wouldn’t bet the bank. We also said that credit would be
a separate structure from sales and marketing, to keep credit independent. We
decided there’s no point having a credit person if that person is going to
report to the sales or business leader, because then sales will always prevail.
Constructive tension between these functions worked for us.
The true picture of two
wheeler sales in India
As per SIAM, a total of around 9.64 million
units of two-wheelers were sold in India during this financial year. FADA puts
the number at 6.19 million units, almost 36% lower. This is a difference of
close to 3.45 million units.
A small part of it stems from the fact that
FADA sales numbers do not take into account sales made in the states of Andhra
Pradesh, Telangana and Madhya Pradesh, which aren’t yet on the government’s
Vahan 4 database, which FADA uses to publish the retail sales numbers. But
retail sales in just three states can’t explain a difference of 3.45 million
units between the SIAM sales number and the FADA sales number.
This basically means
that while manufacturers have been selling two-wheelers to retailers and
retailers haven’t been able to sell a significant portion of what they have
bought from manufacturers to the end consumer. Channel stuffing has been
carried out and now the retailers have ended up with a significant amount of
inventory. FADA suggests that the average inventory of two-wheelers with
dealers is at 45-50 days. This is at the end of the festival season. Last year,
at the end of the festival season the two-wheeler retailers had an average
inventory of 35-40 days.
People will keep taking
their vitamin pills
This year the
dietary supplement industry is forecast to grow as much as 20%. Why? Because
the pandemic is encouraging people to consume more and more multivitamins to
try to boost their immunity, so they don’t contract COVID-19. So what we’ve
seen is tremendous increases in vitamin C, vitamin D, E3 and probiotics. It’s a
great time to be in the supplement market.
People who have now
increased their usage of multivitamins will continue to do so. It’s
reinforcing. They didn’t get sick during the pandemic when they took more
supplements, so they’ll continue to take more supplements after a vaccine is
found. We’re very encouraged that the growth we’re experiencing this year in
multivitamins and in vitamins overall will continue in the foreseeable future.
Learnings from nature
ancient forests, youngsters have to spend their first two hundred years waiting
patiently in their mothers’ shade. As they struggle to put on a few feet, they
develop wood that is incredibly dense. In modern managed forests today,
seedlings grow without any parental shade to slow them down. They shoot up and
form large growth rings even without a nutrient boost from added nitrogen.
Consequently, their woody cells are much larger than normal and contain much
more air, which makes them susceptible to fungi—after all, fungi like to
breathe, too. A tree that grows quickly rots quickly and therefore never has a
chance to grow old.
For building a solid long term portfolio, look at
subscribing to www.intelsense.in long term advisory.
For technofunda investing and positional trading,
subscribe to our Hitpicks advisory service on www.intelsense.in
For momentum trend following systematic trading,
subscribe to Quantamental at www.quantamental.in