Read, Learn, Improve – 28-Mar-15
The Western world has turned its back on car culture – Link here
How luck works – Link here
Behind TaxiForSure’s sellout – This is absolutely amazing behind the scene insight of ola-TaxiForSure acquisition – entrepreneur raised 1/9th money of Ola and sold it at 10x – Link here
Facebook Crashes the Payments Party – Link here
Predictable irrational - Computer password – Link here
The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech Companies – Link here
Consumer culture has found its perfect match in our mobile-first, fast-fashion lifestyles – The reason why flipkart is winning - Link here
What’s Right With Finance – Link here
Things You Didn’t Know About Buffett’s Strategy – Link here
Monday, March 30, 2015
Sunday, March 22, 2015
Most (not everyone) people believe Analyst know what’s gone happen tomm in market
This post is kind of mashup discussion that came about while I was discussion markets in general with two very good friend and analyst - SJ & BA.
Most (not everyone) people believe Analyst know what’s gone happen tomm in market
One of the constant thing that analyst do is “meet management of company” at 5-star hotel of the city like Taj @ Apollo Bunder/Gateway of India, Trident/Hilton at Nariman Point, etc. While visiting one such company management along with my colleague who goes by the name of Sanjay Khan (The Shining Bald) we accidently bumped in old foreigner while entering elevator. We apologized and helped him stand up, given his old age we thought its best if we accompany him till his room. And this conversation happen during the period
Analyst: we are extremely sorry sir, I hope we have not hurt you too much.
Old Gentleman: no no I am fine, you boys ought to carry on with you work and not bother about me
Analyst: no sir, how can we do that, it’s our duty. Anyway my name is Raj and this is my colleague Shining Bald..i mean…Sanjay Khan…I mean…
old gentleman: I am Mr Buffett
Analyst: nice to meet you Mr Buffett
Mr Buffett: so what do you do for living Raj?
Analyst: Sir I am Stock Market Analyst
we reached his room and he open his door and stood there looking at us and spoke “you know why god created Analyst?
Analyst: ummm…so that we can find good stock for investment?
Mr Buffett: no…so that weatherman doesn’t get left alone.
He smile said thank you and closed the door, while I was left wondering in thoughts, Shining Bald was almost rolling on floor and laughing like a kid (ROFLK)
Most general people believe that analyst have ability to forecast or know what is gone happen in stock market in future. Once, Analyst was asked by a person, of which stocks are gone increase tomm, Analyst enquired why he thinks that he know future? And pat comes reply “because you work in stock market”. Analyst was like but that doesn’t make sense, he was like it does, you work in stock market and people who work in stock market know what’s gone happen tomm and day after tomm and so on, Analyst was like “but what gives us ability to do so?”, he said, “ that’s how it is”, I said “who says so?” And he replied “fine, don’t tell me, you make money, while I will remain poor”
I don’t know why most general public hold that belief, but Mr Buffett was right when he said “analyst exist so that weatherman are not left alone”. Think about it, how many times has weatherman gone right?............same is the case with analyst, but people still believe in analyst can predict future and hence their keep on asking him.
There are 2 reasons why people are this way (1) Human nature and (2) somebody claims he can do it and 3) competition to fuel this
Human nature is pretty amazing piece of work, since time immemorial humans have always wonder about what future would be like, hence we have huge fan following of “Back to the future- trilogy” and hence, Indian community has astrologer too. Look it from perspective of businessman or capitalist or marketer and you have wonderful opportunity to cater too. Since demand exists, broker/analyst fulfills it. Second, there would always be somebody who would claim he can forecast future for precisely above reason. hence even if general public at large might know that no one can predict/forecast future, but if somebody claims people would still be interested in paying him and knowing the same (no matter how much ridiculous or fake it might be).
A stock broker works on same logic, people in general want to know what future would be and if beneficial he would be interested in making use of that opportunity. Knowing this stock broker asks his analyst to predict future of Sensex and voila you have a report stating “Sensex at 50,000 by 2020”. Broker very well knows its long time and people suffer from short term memory loss, also you can always come up with new report to make it more exciting. Finally you have competition, if one broker does it, other would out do it and so would other and of course you have 24 x 7 TV channels, newspaper and people around you who continuously bombard you with it and make it sound true “ that humans can predict future and you would be fool in not believe the same”
While giving pocket money, parent always say “don’t spend all at one go”. Whenever you are crossing road, you ought to look on both sides before crossing. Now we cannot predict future, but we can always minimize our loss & try to be safe. Same goes for stock market investing, nobody can predict future, but there are always way to safeguard and protect your money. If somebody claims ability to predict future, I suggest you get out of there at very moment.
Most (not everyone) people believe Analyst know what’s gone happen tomm in market
One of the constant thing that analyst do is “meet management of company” at 5-star hotel of the city like Taj @ Apollo Bunder/Gateway of India, Trident/Hilton at Nariman Point, etc. While visiting one such company management along with my colleague who goes by the name of Sanjay Khan (The Shining Bald) we accidently bumped in old foreigner while entering elevator. We apologized and helped him stand up, given his old age we thought its best if we accompany him till his room. And this conversation happen during the period
Analyst: we are extremely sorry sir, I hope we have not hurt you too much.
Old Gentleman: no no I am fine, you boys ought to carry on with you work and not bother about me
Analyst: no sir, how can we do that, it’s our duty. Anyway my name is Raj and this is my colleague Shining Bald..i mean…Sanjay Khan…I mean…
old gentleman: I am Mr Buffett
Analyst: nice to meet you Mr Buffett
Mr Buffett: so what do you do for living Raj?
Analyst: Sir I am Stock Market Analyst
we reached his room and he open his door and stood there looking at us and spoke “you know why god created Analyst?
Analyst: ummm…so that we can find good stock for investment?
Mr Buffett: no…so that weatherman doesn’t get left alone.
He smile said thank you and closed the door, while I was left wondering in thoughts, Shining Bald was almost rolling on floor and laughing like a kid (ROFLK)
Most general people believe that analyst have ability to forecast or know what is gone happen in stock market in future. Once, Analyst was asked by a person, of which stocks are gone increase tomm, Analyst enquired why he thinks that he know future? And pat comes reply “because you work in stock market”. Analyst was like but that doesn’t make sense, he was like it does, you work in stock market and people who work in stock market know what’s gone happen tomm and day after tomm and so on, Analyst was like “but what gives us ability to do so?”, he said, “ that’s how it is”, I said “who says so?” And he replied “fine, don’t tell me, you make money, while I will remain poor”
I don’t know why most general public hold that belief, but Mr Buffett was right when he said “analyst exist so that weatherman are not left alone”. Think about it, how many times has weatherman gone right?............same is the case with analyst, but people still believe in analyst can predict future and hence their keep on asking him.
There are 2 reasons why people are this way (1) Human nature and (2) somebody claims he can do it and 3) competition to fuel this
Human nature is pretty amazing piece of work, since time immemorial humans have always wonder about what future would be like, hence we have huge fan following of “Back to the future- trilogy” and hence, Indian community has astrologer too. Look it from perspective of businessman or capitalist or marketer and you have wonderful opportunity to cater too. Since demand exists, broker/analyst fulfills it. Second, there would always be somebody who would claim he can forecast future for precisely above reason. hence even if general public at large might know that no one can predict/forecast future, but if somebody claims people would still be interested in paying him and knowing the same (no matter how much ridiculous or fake it might be).
A stock broker works on same logic, people in general want to know what future would be and if beneficial he would be interested in making use of that opportunity. Knowing this stock broker asks his analyst to predict future of Sensex and voila you have a report stating “Sensex at 50,000 by 2020”. Broker very well knows its long time and people suffer from short term memory loss, also you can always come up with new report to make it more exciting. Finally you have competition, if one broker does it, other would out do it and so would other and of course you have 24 x 7 TV channels, newspaper and people around you who continuously bombard you with it and make it sound true “ that humans can predict future and you would be fool in not believe the same”
While giving pocket money, parent always say “don’t spend all at one go”. Whenever you are crossing road, you ought to look on both sides before crossing. Now we cannot predict future, but we can always minimize our loss & try to be safe. Same goes for stock market investing, nobody can predict future, but there are always way to safeguard and protect your money. If somebody claims ability to predict future, I suggest you get out of there at very moment.
Saturday, March 21, 2015
Read, Learn, Improve 21-Mar-15
A Tech Bubble or Just a Mistake? – Link here
India is becoming the land of the errand app – Link here
American petro-topia - The genius and hubris of plastic has been absorbed by every living thing. Is it a curse or evolution’s next step? – Link here
Behavioral Experts Behaving Badly – Link here
An investing app, is luring stock-market newbies – Link here
Lies and Statistics: How India’s Largest State Fudges Crime Data – Link here
Michael Lewis Reflects on His Book Flash Boys, a Year After It Shook Wall Street to Its Core – Link here
P/E Ratio Analysis of Nifty in 2015 (Since last 16+ Years) – Link here
India is becoming the land of the errand app – Link here
American petro-topia - The genius and hubris of plastic has been absorbed by every living thing. Is it a curse or evolution’s next step? – Link here
Behavioral Experts Behaving Badly – Link here
An investing app, is luring stock-market newbies – Link here
Lies and Statistics: How India’s Largest State Fudges Crime Data – Link here
Michael Lewis Reflects on His Book Flash Boys, a Year After It Shook Wall Street to Its Core – Link here
P/E Ratio Analysis of Nifty in 2015 (Since last 16+ Years) – Link here
Saturday, March 14, 2015
Read, Learn, Improve -14-Mar-15
Pigeon King - The Scam that shook Canada – Link here
The Strong, Weak Dollar – Link here
Homejoy, the startup that makes all new hires scrub toilets – Link here
It is all about durability – Link here
Why We Sleep Together – Link here
Ray Dalio - Power of not knowing – Link here
Look Out Below, Copper's Falling – Link here
When Should You Follow Insider Buying Signals? – Link here
If I ran a beverage company in India, I would go and acquire this company - Paper Boat is giving traditional Indian beverages a makeover – Link here
The Strong, Weak Dollar – Link here
Homejoy, the startup that makes all new hires scrub toilets – Link here
It is all about durability – Link here
Why We Sleep Together – Link here
Ray Dalio - Power of not knowing – Link here
Look Out Below, Copper's Falling – Link here
When Should You Follow Insider Buying Signals? – Link here
If I ran a beverage company in India, I would go and acquire this company - Paper Boat is giving traditional Indian beverages a makeover – Link here
Tuesday, March 10, 2015
How Analyst think
For this post most of the content is taken from Quora.
Somebody on Quora posted a question "I paid Rs. 20 to a shoe polish wala in Dadar station. Given the number of people travelling everyday we can expect that he polishes at least 100 shoes a day. Does it mean that his income is at least Rs. 480000 a year?"
It was answered anonymously, it gives one very interesting insight into mind of analyst, how Analyst think & verifies fact. go on read it to get better insight
I know the actual number because of a project. I will reveal it in the end.
Let us do some basic math. Dadar Station traffic is half million passengers a day.
That is 5,00,000. Given that a person is likely to polish his shoes only in one way journey we get 2,50,000.
Deduct from it 20% female crowd and 30% students because neither of them wear polish-able shoes.
You get 1,25,000 men traveling via Dadar and might polish their shoes assuming they are wearing one. 50% of India's population is very poor and most certainly does not have a job that requires them to wear polished shoes, and they mostly take trains and buses so we deduct another 50% to get 62,000.
For simplicity sake let us assume all of them wear polish-able shoes.[1] I polish my shoes once a month so only 1/30th of 62,000 wants to polish their shoes a day. That is 2066 ~ 2000.
Dadar station has 12 shoe polish people last time I had checked. (two years back).
So each boy typically gets around 166 customers. Each polishing session takes around 4 minutes. Which means assuming there is an infinite line of customers then the boy has to work for 11 hours a day to cater to all of them.
That is not the case. This is totally incorrect. It is incorrect because of assumption [1]. Out of those 62,000 only 30% probably work in service industry. We get 20,500. when we apply 1/30 rule to it we get around 683. 683/12= 56.
Note that as per our assumptions this is the upper limit on how many customers a shoe polish guy would have. It will never exceed 56.
The facts are :
1. The real number is around 20 customers per day.(After adjusting for weekends) Number never exceeds 60 in a day.
2. 100 rupees is the hafta that they have to pay
So typical monthly earning for him is around Rs 6000 per month. This is also a part time business with free time on weekends. That makes it very lucrative.
Quora Answer Link
Somebody on Quora posted a question "I paid Rs. 20 to a shoe polish wala in Dadar station. Given the number of people travelling everyday we can expect that he polishes at least 100 shoes a day. Does it mean that his income is at least Rs. 480000 a year?"
It was answered anonymously, it gives one very interesting insight into mind of analyst, how Analyst think & verifies fact. go on read it to get better insight
I know the actual number because of a project. I will reveal it in the end.
Let us do some basic math. Dadar Station traffic is half million passengers a day.
That is 5,00,000. Given that a person is likely to polish his shoes only in one way journey we get 2,50,000.
Deduct from it 20% female crowd and 30% students because neither of them wear polish-able shoes.
You get 1,25,000 men traveling via Dadar and might polish their shoes assuming they are wearing one. 50% of India's population is very poor and most certainly does not have a job that requires them to wear polished shoes, and they mostly take trains and buses so we deduct another 50% to get 62,000.
For simplicity sake let us assume all of them wear polish-able shoes.[1] I polish my shoes once a month so only 1/30th of 62,000 wants to polish their shoes a day. That is 2066 ~ 2000.
Dadar station has 12 shoe polish people last time I had checked. (two years back).
So each boy typically gets around 166 customers. Each polishing session takes around 4 minutes. Which means assuming there is an infinite line of customers then the boy has to work for 11 hours a day to cater to all of them.
That is not the case. This is totally incorrect. It is incorrect because of assumption [1]. Out of those 62,000 only 30% probably work in service industry. We get 20,500. when we apply 1/30 rule to it we get around 683. 683/12= 56.
Note that as per our assumptions this is the upper limit on how many customers a shoe polish guy would have. It will never exceed 56.
The facts are :
1. The real number is around 20 customers per day.(After adjusting for weekends) Number never exceeds 60 in a day.
2. 100 rupees is the hafta that they have to pay
So typical monthly earning for him is around Rs 6000 per month. This is also a part time business with free time on weekends. That makes it very lucrative.
Quora Answer Link
Monday, March 9, 2015
Read, Learn, Improve - 7-Mar-15
Don't Be Like Buffett. Be Like You – Link here
Investment Banker on Warren Buffett – Link here
The $62bn secret of Warren Buffett’s success – Link here
Warren Buffett — Lucky Coin Flipper? – Link here
Striking gold with a hoard of lost property – Link here
The Absolute Return Letter - Tigers in Africa – Link here
Culture insight – Iceland – babies nap in tough cold weather outside – Link here
Devangshu Datta: The ABC of life on Earth – Link here
What does it feel like to die? – Link here
A quarter of a million people use an app to brush their teeth – Link here
Tuesday, March 3, 2015
SnapChat – what does nature teaches us?
SnapChat has been taking mobile user and investors by storm. For uninitiated “Snapchat is a photo messaging application. Using the app, users can take photos, record videos, add text and drawings, and send them to a controlled list of recipients. Users set a time limit for how long recipients can view their Snaps (the range is from 1 to 10 seconds) after which they will be hidden from the recipient's device and deleted from Snapchat's servers”.
If you have parents who in 50s/60s/70s or you are a rational analyst/investor – one wonders what utility does this app fulfill…..because utility means revenue, which means profit and which means valuation. I guess that’s pretty normal for people in stock market fraternity. However Silicon Valley seems to work on totally different tangent “make a cool product and let market see if it has utility” SnapChat belongs to that category.
Market is amazing, one of my professor use to say “you are born in market, you live in market and you die in market”. Free market captures true essences of nature or Darwin principle “survival of fittest”. To just re-word the phrase of Gordon Gekko from movie Wall Street “Market, for lack of a better word, is good. Market is right. Market works. Market clarifies, cuts through, and captures, the essence of the evolutionary spirit”.
For all of us rational investor & analyst kept on wondering what utility SnapChat can provide, porn or adult entertainment industry has found its usage. (I am not here to debate on legality & harmfulness & morality etc of porn or adult entertainment industry), (Read more here – NYTimes) I just want show what wonder market can create, I am not sure whether inventor of SnapChat thought about it, just like Mark Zuckerberg & Team at Facebook they just thought it would be cool product and look what their invention is doing. For that matter, many of us where questioning the utility of Facebook in very beginning and look where it is today, FB pretty much created & revolutionize an industry “social media”.
Anyway if you thought that SnapChat was only used by adult industry, you should re-think. Sometime back SnapChat introduced a concept of story (read whole story here and here), where strings of pics can be attached and resulting movie last for 24hrs. Plus the movie doesn’t come up on friends’ timeline or mail; person/friend has to actively seek out. Articles in above link would give one very good idea on working of SnapChat and how people have started using it.
One of the key things I have learned after reading tonnes of books & interacting with of lot of successful & failed entrepreneur is what nature teaches us, “One turtle lays anywhere between 50-200 eggs (depending on species) of which 1% survive over long time”. Provide small funding to many entrepreneur and let market decide which one win.
If you have parents who in 50s/60s/70s or you are a rational analyst/investor – one wonders what utility does this app fulfill…..because utility means revenue, which means profit and which means valuation. I guess that’s pretty normal for people in stock market fraternity. However Silicon Valley seems to work on totally different tangent “make a cool product and let market see if it has utility” SnapChat belongs to that category.
Market is amazing, one of my professor use to say “you are born in market, you live in market and you die in market”. Free market captures true essences of nature or Darwin principle “survival of fittest”. To just re-word the phrase of Gordon Gekko from movie Wall Street “Market, for lack of a better word, is good. Market is right. Market works. Market clarifies, cuts through, and captures, the essence of the evolutionary spirit”.
For all of us rational investor & analyst kept on wondering what utility SnapChat can provide, porn or adult entertainment industry has found its usage. (I am not here to debate on legality & harmfulness & morality etc of porn or adult entertainment industry), (Read more here – NYTimes) I just want show what wonder market can create, I am not sure whether inventor of SnapChat thought about it, just like Mark Zuckerberg & Team at Facebook they just thought it would be cool product and look what their invention is doing. For that matter, many of us where questioning the utility of Facebook in very beginning and look where it is today, FB pretty much created & revolutionize an industry “social media”.
Anyway if you thought that SnapChat was only used by adult industry, you should re-think. Sometime back SnapChat introduced a concept of story (read whole story here and here), where strings of pics can be attached and resulting movie last for 24hrs. Plus the movie doesn’t come up on friends’ timeline or mail; person/friend has to actively seek out. Articles in above link would give one very good idea on working of SnapChat and how people have started using it.
One of the key things I have learned after reading tonnes of books & interacting with of lot of successful & failed entrepreneur is what nature teaches us, “One turtle lays anywhere between 50-200 eggs (depending on species) of which 1% survive over long time”. Provide small funding to many entrepreneur and let market decide which one win.
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