Intelsense Capital Blog: Weekend Reading

Reading Time: 5 minutes

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. If you like this collection, consider forwarding
it to someone who you think will appreciate it.

Why Valuations Probably
Won’t Matter For a While

  • Markets are in an uptrend
  • Easy money is here to stay
    for a while
  • The government isn’t going
    make the same mistake it made following the last crisis by pushing for
  • The consumer is in better
    shape even after a pandemic-induced recession
  • Housing prices are on fire
  • And there is a light at the
    end of the Covid tunnel.

On the other hand,
valuations are stretched, we are coming off a 10+ year bull market that never
truly got reset during the pandemic plunge and there is a speculative frenzy
among investors that hasn’t been seen since the dot-com bubble.

Markets, in many
ways, are insane right now.

Yes, fundamentals
will always matter eventually when it comes to the markets but the next 18-24
months is setting up to be one of the better economic environments we’ve seen
in some time. But there is just so much money sloshing around that it seems
like any correction will see buyers step in.


Is Tiny Cars the future of

Having decided that
the future of mobility is electric, the Chinese government has subsidized sales
of standard electric cars since 2010. With close to 1.18 million sold in 2019,
China accounts for just over half of electric-vehicle sales globally. The country
has set a top-down target for electric vehicles to make up 40% of car sales by
2030. Tiny cars, which first began appearing in the early 2010s, have more than
double the sales of regular electric cars but have never benefited from
subsidies. Nor do advertisements for them air on television. As they don’t
technically require licenses, tiny cars tend to be popular with migrant
workers, who struggle to pay for driving lessons and other car-related costs.
The elderly, too, find tiny cars attractive since, up until October of last
year, people over 70 could not apply for a driving license in China. They’re
also convenient for anybody who wants a car to pick up groceries or their kids
from school: No tiny car is longer than 1.5 meters, and their speed tops out at
between 40 and 56 kilometers an hour. They’re for the short trips of daily
life, not for traveling from one side of the city to another.


The next big risk

A few years back
that some hackers managed to get a hold of the Swift credentials of Bangladesh
Bank, the central bank of Bangladesh, and caused several tens of millions of
dollars to disappear from Bangladesh Bank’s master account at the Federal
Reserve Bank of New York. Some of the money was recovered, but some of it seems
to have disappeared into casinos in Macau—walked out the door and was never
recovered. In this case it was not a failure of the Federal Reserve. Someone
managed to get access to the Swift credentials of a bank that had an account at
the Federal Reserve, and they drained that bank’s master account.

As we discovered in
the pandemic, there’s a lot of systemically important companies. It suddenly
became obvious to everybody. Without Amazon or Google or our internet service
provider, our problems would become even greater.


What’s the dumb thing you
can do here?

In a new interview,
billionaire Thomas Tull — who runs a holding company called Tulco modeled in
part after Buffett’s — described just a piece of advice from Buffett that
shifted his approach to investment decisions. At a meeting in Buffett’s office
in Omaha, the legendary investor shared the lesson during a two-hour
conversation, which Tull said he’ll “treasure for the rest of my
life.” The lesson involved an approach taken by Buffett and his longtime
business partner, Charlie Munger.


“There was a
moment,” Tull says. “Where I was describing and talking through the
business model [of Tulco] and how I thought about something.”


“I said, ‘What
we’re trying to do is be smart about,’ and [Buffett] stopped me and said, ‘I
gotta be honest, for years, Charlie and I have always asked, ‘What’s the dumb
thing we could do here?'”


“I kind of
laughed, and he said, ‘No, I’m dead serious. We always ask. We don’t want to be
in the clever pile. What what could we do here that would be the dumb thing,
and how do we avoid it?'” Tull says. “Honestly, it actually has had a
fair amount of impact on the way that I assess and think about


The future of education is

In 2011, Stanford
professor Andrew Ng—along with the help of Daphne Koller—posted videos of his
course on machine learning. Within weeks, there were over 100,000 learners who
viewed it.  To put things into perspective:
Ng’s on-campus course would involve about 400 students per year. This meant
that he would have to teach for 250 years to get the same levels achieved on

In today’s economy
in which the skills needed to succeed are rapidly evolving, education is
becoming more important than ever. As automation and digital disruption are
poised to replace unprecedented numbers of jobs worldwide, giving workers the
opportunity to upskill and reskill will be crucial to raising global living
standards and increasing social equity. Online education will play a critical
role, enabling anyone, anywhere, to gain the valuable skills they need to earn
a living in an increasingly digital economy. In 2019, the spending on global
higher education was $2.2 trillion. As for the online degree category, it was
$36 billion in 2019 and is forecasted to hit $74 billion by 2025.

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Abhishek Basumallick

Abhishek Basumallick

Abhishek Basumallick is the Head of the equity advisory for long term wealth creation.
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