Category: What We’re Reading

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 12 July 2020:

1. Habits: The Art of Compounding Choices – Oliver Sung

The key to designing the environment in a way that actually works for sustaining habits is to scale the desired habit down to the smallest, simple thing.

• Want to read 20 book pages every night? Leave a book on your pillow every day you wake up and make your bed.
• Want to drink more water and less alcohol? Make water the default choice by having nothing else in the fridge.
• Want to save more money? Automate your savings transfers and keep the savings account at a different bank than your checking account.
• Want to practice more guitar? Place it right in the center of your living room.

Forming the right habits is really all about thinking ahead to the second-order consequences of even the smallest choices and decisions. Secondly, it’s about creating the right system to make them incredibly easy to start and impossible to fail.

2. The Coffee Can Edge – John Huber

The coffee can portfolio is one of the simplest and most interesting concepts in all of portfolio management theory. It’s a term coined in 1984 by Robert Kirby, a portfolio manager who noticed that one of his clients did better than his own portfolio by secretly using all of Kirby’s buy recommendations but ignoring his sell recommendations. This particular client would put around $5,000 into each stock that Kirby bought, and then never touched the stock again. He put the stock certificate in the proverbial “coffee can” and didn’t think about it again. The results of each individual decision varied widely. Some stocks lost a majority of their value, some went up by an average amount, but a few performed incredibly well. The biggest winner was worth $800,000 (on a $5,000 initial investment).

One benefit of the coffee can approach is it forces you to think about what companies will be looking like in 5-10 years, as opposed to next year or the year after, which is the time frame that most investors (even those in the value investing community) tend to reside. The coffee can incentivizes you to think about two types of companies: the durable businesses that are likely to maintain their competitive position; or the businesses with the potential for much greater earning power in the future (and thus much greater value).

I wrote a series five years ago discussing the importance of returns on capital inside of a business, with the idea that there are two groups of companies in the world: those that are increasing their underlying value per share, and those that are eroding it. While it’s possible to make money buying stocks of mediocre businesses perhaps by buying something cheap and flipping it a year later, I’ve always thought that the vast majority of losses in the stock market come from picking the wrong business, not picking the wrong valuation on the right business.

3. Three people with inherited diseases successfully treated with CRISPR – Michael Le Page

Two people with beta thalassaemia and one with sickle cell disease no longer require blood transfusions, which are normally used to treat severe forms of these inherited diseases, after their bone marrow stem cells were gene-edited with CRISPR.

Result of this ongoing trial, which is the first to use CRISPR to treat inherited genetic disorders, were announced today at a virtual meeting of the European Hematology Association.

“The preliminary results… demonstrate, in essence, a functional cure for patients with beta thalassaemia and sickle cell disease,” team member Haydar Frangoul at Sarah Cannon Research Institute in Nashville, Tennessee, said in a statement.

4. Markets Bombed, Investors Carried On – Jason Zweig

Almost 95% of the 5 million investors in 401(k) and similar retirement plans run by Vanguard Group didn’t make a single trade in the first four months of 2020. Fewer than 1% moved their money entirely out of stocks.

All told, including 8 million households with individual accounts, only 12% of Vanguard’s investors traded between late February and early May, says Karin Risi, managing director of Vanguard’s retail investor group. Among those who did trade, two-thirds bought stocks rather than selling.

From late February through the end of March, fewer than 3% of the 2.2 million participants in retirement plans run by T. Rowe Price Group Inc. made any changes to their portfolios. “It’s a testament to people learning that this is a long-term investment,” says Kevin Collins, head of T. Rowe Price’s retirement-plan services.

5. The Broker Who Saved America – Joshua M. Brown

Solomon uses this role to access enemy military installations and to undermine German support for the Brits. He is sabotaging from the inside, talking the Hessians out of fighting for the English king. When these insurgency activities are discovered, Solomon is arrested again. This time, he pulls out a gold coin that had been sewn into his clothes and bribes a guard to let him escape. He flees to Philadelphia and arranges for his wife and son to meet him there. For the second time, Solomon has arrived in a new American city penniless and forced to start over.

By this time, the tide has turned and the Continental Army is beginning to pile up victories. The army is still, however, massively underfunded. General Washington is without readily available cash and is hamstrung by this lack of financial flexibility. He makes frequent requests to the Continental Congress to send money, but very little money comes. Into this breach steps Haym Solomon, ready to serve in the capacity in which he is best suited – as broker to the fledgling America.

Now that his merchant finance business is up and running again, Solomon begins funneling his own personal profits from the enterprise directly to the revolution. According to records of the time, he extends no-interest “loans”, many of which were never repaid, to James Monroe, Thomas Jefferson, James Madison, and even Don Francesco Rendon, the Spanish Court’s secret ambassador.

6. News by the ton: 75 years of US advertising – Ben Evans

It’s very common for people – especially newspaper people – to look at the newspaper and internet series in these charts and conclude that all the money went from newspapers to internet. There’s also a tendency to try to calculate Google and Facebook’s share of that ‘internet’ line. This can get you onto shaky ground quite quickly.  As that change in share of GDP (and my phase ‘suspiciously flat’) should suggest, what’s actually happened is that the market has been both reallocated and repriced, a lot of money left the data that’s being captured here, and a lot of other money came in.

So: if you talk to people at both Google and Facebook and in the agency world, you’ll hear that perhaps two thirds to three quarters of money spent on Google and Facebook is money that was never spent on traditional advertising – it’s coming from SMEs and local businesses that might have spent in classified at most but probably wouldn’t have done even that. $60bn of consumer spending went through Shopify last year – it’s safe to assume those vendors spent money on advertising, but how many of them would have bought an ad in a local newspaper? This has also come at much lower prices: Facebook in particular has been massively deflationary to online advertising: it offers vast quantities of relevant advertising inventory at much lower prices and much lower entry costs than you’d have needed in print, let alone TV. 

7. 99% of Long-Term Investing Is Doing Nothing; the Other 1% Will Change Your Life – Morgan Housel

Napoleon’s definition of a military genius was, “The man who can do the average thing when all those around him are going crazy.” It’s the same in investing.

Building wealth over a lifetime doesn’t require a lifetime of superior skill. It requires pretty mediocre skills — basic arithmetic and a grasp of investing fundamentals — practiced consistently throughout your entire lifetime, especially during times of mania and panic…

… To demonstrate my meaning, I used Yale economist Robert Shiller’s market data going back to 1900 and created three hypothetical investors. Each has saved $1 a month, every month, since 1900.

The first is Betty. She doesn’t know anything about investing, so she dollar-cost averages, investing $1 in the S&P 500 every month, rain or shine.

Sue, a CNBC addict, invests $1 a month into the S&P, but tries to protect her wealth by saving cash when the economy is in recession, deploying her built-up hoard back into the market only after the economy officially exits a recession.

Bill, a mutual fund manager whose only incentive is to look right in the short run, invests $1 a month, but stops investing in stocks six months after a recession begins, and only puts his money back into the market six months after a recession ends.

After 113 years of investing, who’s won? Boring Betty takes it by a mile:

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 5 July 2020:

1. 40 Things I’ve Learned in 40 Years – Cullen Roche

1) Always try to be a good person. This is the most obvious one and also often the hardest one. Life is hard and everyone is fighting their own personal battles. Help them through it by being kind enough to try to understand their battle.

2) Never mistake money for wealth. The person who mistakes money for wealth will live a life accumulating things, all the while mistaking a life of owning for a life of living.

3) Never stop learning. Life is one big lesson and the older you get the more you’ll realize how little you know. Never lose an unquenchable thirst for knowledge and understanding.

2. Why We’re Blind to Probability – Morgan Housel

Let’s say you’re a 75-year-old economist. You started your career at age 25. So you have half a century of experience predicting what the economy will do next. You’re as seasoned as they come.

But how many recessions have there been in the last 50 years?

Seven.

There have only been seven times in your career that you’ve been able to measure your skills.

If you want to really judge someone’s abilities you would compare dozens, hundreds, or thousands of attempts against reality. But a lot of fields don’t generate that many opportunities to measure. It’s no one’s fault; it’s just the reality of the real world is messier than an idealized spreadsheet.

It’s an important quirk, because if someone says “there’s an 80% chance of a recession,” the only way to tell if they’re right is to compare dozens or hundreds of times they made that exact call and see if it came true 80% of the time.

If you don’t have dozens or hundreds of attempts – sometimes you have one or two – there’s no way to know whether someone who says “75% chance of this,” or “32% chance of that” is right or not. So we’re all left guessing (or preferring those who profess certainty, which is easier to measure).

3. Behind the Fall of China’s Luckin Coffee: a Network of Fake Buyers and a Fictitious Employee – Jing Yang

A group of Luckin employees had already begun helping sales along by engineering fake transactions, starting the month before the IPO, according to people familiar with the operation. The employees used individual accounts registered with cellphone numbers to purchase vouchers for numerous cups of coffee. Between 200 million and 300 million yuan of sales ($28 million to $42 million) were fabricated in this manner, according to a person familiar with the matter.

The undertaking became more complex. In late May 2019, orders began flooding in under a fledgling line of business that involved selling coffee vouchers in bulk to corporate customers, according to internal records reviewed by the Journal.

Alongside bona fide voucher sales, to a few regular clients such as airlines and banks, the records show numerous purchases by dozens of little-known companies in cities across China. These companies repeatedly bought bundles of vouchers, often in large amounts. Rafts of orders sometimes came in during overnight hours.

Qingdao Zhixuan Business Consulting Co. Ltd., situated in China’s northern Shandong province, bought 960,000 yuan ($134,000) worth of Luckin vouchers in a single order, according to the documents. They show it made more than a hundred similar purchases from May to November of 2019.

Mainland China and Hong Kong corporate-registry records link this company to a relative of Mr. Lu, to an executive of Mr. Lu’s previously founded Ucar Inc. and to a Luckin executive, via a complex web of other companies and their directors and shareholders. Qingdao Zhixuan also has the same telephone number as a branch of CAR Inc. and is registered with a Ucar email address.

4. How Big is the Racial Wealth Gap? – Nick Maggiulli

Unfortunately, even when we control for a household’s education level, the wealth gap still exists between White and non-White households.  In fact, the median Black household with a college degree has a net worth similar to the median White household without a high school diploma.

Yes, you read that right.  A college degree barely gets a Black household past where a White household is with no high school education.

5. The Anthropause: How the Pandemic Gives Scientists a New Way to Study Wildlife – Matt Simon

“There is an amazing research opportunity, which has come about through really tragic circumstances,” says lead author Christian Rutz, an evolutionary ecologist at the University of St. Andrews and Harvard University. “And we acknowledge that in the article. But it’s one which we as a scientific community really can’t afford to miss. It’s an opportunity to find more about how humans and wildlife interact on this planet.”

Historically, this has been difficult to study. Researchers might have been able to compare how species behave in a protected area versus a neighboring unprotected area, or an urban versus a rural environment. “The problem with all of these approaches is that they usually refer to just a handful of sites,” says Rutz. “And what happened here in the anthropause is that we have this global slowing of human activity, which gives us these really valuable replicates, where we can look at the effects of human activity across geographic regions, across ecosystems, and importantly, also across species.”

Take the fishers—carnivorous mammals in the weasel family—living in North America. “They were supposed to be out in the woods far away from people, and somehow they entered cities again,” says ecologist Martin Wikelski of the Max Planck Institute of Animal Behavior and University of Konstanz, coauthor on the anthropause paper. “This is a change in culture—it’s not a genetic change.”

6. SITALWeek #251: How a Handful of Chip Companies Came to Control the Fate of the World – NZS Capital, LLC

Photolithography is a good example. In short, when the light source used in the process had to change from a wavelength of 193nm to 13.5nm to accommodate smaller, more intricate patterns on leading-edge chips of ever-decreasing geometry, only one company even tried to do it.

Extreme ultraviolet lithography (EUV) is an almost magical process. In a vacuum, 50,000 microscopic droplets of molten tin are fired every second in a stream as one laser strikes each one so precisely that they flatten into discs before another bombards them with so much power that they become balls of plasma shining with EUV light. The machines cost almost $200 million, can be the size of a house and are contained within ultraclean environments to keep out even a single speck of dust. The scanners and lasers that power EUV lithography are so complex that a decade ago many scientists believed them to be an impossibility, and Nikon, ASML’s key competitor, viewed the technology as so complicated that it didn’t even attempt to develop an EUV tool.

Because of its unique mastery of EUV, ASML has built a de facto monopoly in manufacturing the machines that make the most advanced chips. The Dutch company expects to ship about 35 scanners this year, taking the total used by foundries around the world to around 100. TSMC and Samsung are already in high-volume manufacturing with EUV, while Intel will be using the process from 2021.

Without EUV, Moore’s Law, which states that the density of transistors on a chip will double about every two years, would likely have reached its limitations. But because of the process, TSMC is building 7nm and 5nm fabs, and is investing another $20 billion on a 3nm node foundry, while Samsung, South Korea’s biggest company, said in May 2020 it started building a 5nm facility near Seoul based on EUV as part of a $116 billion plan outlined in April 2019 to compete with TSMC in contract chipmaking.

7. The Nifty Fifty and the Old Normal – Ben Carlson

Although the Nifty Fifty stocks got crushed after being bid up so much by investors in the early-1970s, their long-term results were still pretty good. Jeremy Siegel published Revisiting The Nifty Fifty in 1998. He published the annual returns from 1972 through the summer of 1998 for these stocks along with their 1972 P/E ratios and subsequent earnings growth rates:

Many of the stocks at the top of the list showed extraordinary performance. Some of these stocks were terrible investments. But you can see over this multi-decade period, this group actually more or less kept up with the overall stock market. Despite crashing from lofty levels, over the long-term the Nifty Fifty did just fine.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 28 June 2020:

1. Growth Without Goals – Patrick O’Shaughnessy

Jeff Bezos is an incredible figure. He is known for his focus on the long term. He has even funded a clock in West Texas which ticks once per year and is built to last 10,000 years—an ode to thinking long-term.

But I now realize that the key isn’t thinking long-term, which implies long-term goals. Long-term thinking is really just goalless thinking. Long term “success” probably just comes from an emphasis on process and mindset in the present. Long term thinking is also made possible by denying its opposite: short-term thinking. Responding to a question about the “failure” of the Amazon smartphone, Bezos said “if you think that’s a failure, we’re working on much bigger failures right now.” A myopic leader wouldn’t say that.

My guess is that Amazon’s success is a byproduct, a side-effect of a process driven, flexible, in-the-moment way of being. In the famous 1997 letter to shareholders, which lays out Amazon’s philosophy, Bezos says that their process is simple: a “relentless focus on customers.” This is not a goal to be strived for, worked towards, achieved, and then passed. This is a way of operating, constantly—every day, with every decision.

2. Never The Same – Morgan Housel

The halt in business has been stronger than anything ever seen, including the Great Depression. But the Nasdaq is at an all-time high.

The story isn’t over. And it’s political, so it’s messy. But in terms of quickly stemming an economic wound, the policy response over the last 90 days has been a success.

There’s been the $600 weekly boost to unemployment benefits.

The Fed expanding its balance sheet by trillions of dollars and backstopping corporate debt markets.

The $1,200 stimulus payments.

The Paycheck Protection Plan.

The airline bailouts.

The foreclosure moratoriums … on and on.

I don’t care whether you think those things are right, wrong, moral, or will have ugly consequences. That’s a different topic.

All that matters here is that people’s perception of what policymakers are capable of doing when the economy declines has been shifted higher in a huge way. And it’s crazy to think those new expectations won’t impact policymakers’ future decisions.

It’s one thing if people think policymakers don’t have the tools to fight a recession. But now that everyone knows how powerful the tools can be, no politician can say, “There’s nothing we could do.” They can only say, “We chose not to do it.” Which few politicians – on either side – wants to say when people are losing jobs.

3. What comes after Zoom? – Ben Evans

I think this is where we’ll go with video – there will continue to be hard engineering, but video itself will be a commodity and the question will be how you wrap it. There will be video in everything, just as there is voice in everything, and there will be a great deal of proliferation into industry verticals on one hand and into unbundling pieces of the tech stack on the other. On one hand video in healthcare, education or insurance is about the workflow, the data model and the route to market, and lots more interesting companies will be created, and on the other hand Slack is deploying video on top of Amazon’s building blocks, and lots of interesting companies will be created here as well. There’s lots of bundling and unbundling coming, as always. Everything will be ‘video’ and then it will disappear inside.

4. The Anatomy of a Rally – Howard Marks

There’s no way to determine for sure whether an advance has been appropriate or irrational, and whether markets are too high or too low. But there are questions to ask:

• Are investors weighing both the positives and the negatives dispassionately? 
• How do valuations based on things like earnings, sales and asset values stack up against historical norms?
• Is that optimism causing investors to ignore valid counter-arguments?
• Is the market being lifted by rampant optimism?
• Are the positives fundamental (value-based) or largely technical, relating to inflows of liquidity (i.e., cash-driven)?
• If the latter, is their salutary influence likely to prove temporary or permanent?
• What’s the probability the positive factors driving the market will prove valid (or that the negatives will gain in strength instead)?

Questions like these can’t tell us for a fact whether an advance has been reasonable and current asset prices are justified. But they can assist in that assessment. They lead me to conclude that the powerful rally we’ve seen has been built on optimism; has incorporated positive expectations and overlooked potential negatives; and has been driven largely by the Fed’s injections of liquidity and the Treasury’s stimulus payments, which investors assume will bridge to a fundamental recovery and be free from highly negative second-order consequences.

5. Locusts Are A Plague Of Biblical Scope In 2020. Why? And … What Are They Exactly? – Pranav Baskar

Locusts have been around since at least the time of the pharaohs of ancient Egypt, 3200 B.C., despoiling some of the world’s weakest regions, multiplying to billions and then vanishing, in irregular booms and busts.

If the 2020 version of these marauders stays steady on its warpath, the United Nations Food and Agriculture Organization says desert locusts can pose a threat to the livelihoods of 10% of the world’s population.

The peril may already be underway: Early June projections by the FAO are forecasting a second generation of spring-bred locusts in Eastern Africa, giving rise to new, powerful swarms of locust babies capable of wreaking havoc until mid-July or beyond.

6. As Businesses Reopen, We Should Reopen Our Minds – Chin Hui Leong

Even as the ground beneath businesses shift, we should recognise that some of the key qualities we seek as investors will remain unchanged.

We still want to have good management teams at a company’s helm who are willing to adapt to new realities, innovate, and pivot their business accordingly.

Similarly, a business with strong financials and steady free cash flow rarely goes out of style, as cash would provide the company with the all-important financial firepower to turn strategy into reality.

These factors remain timeless.

And we have to keep learning.

We will continue looking for instances and data points that will either validate or break our assumptions on how things may change in the future.

It’s an ongoing process that we, as investors, have to adopt and be willing to change our mind if the situation calls for it.

Ultimately, keeping an open mind and a long term view is key.

New, unexpected developments could take shape in ways we cannot predict ahead of time.

7. Transcript: Jeremy Siegel – Barry Ritholtz and Jeremy Siegel

RITHOLTZ: And I thought I recall didn’t Ben Bernanke specifically saved that to Milton Friedman at some …

SIEGEL: Absolutely. During his 90th birthday. He was the head of ceremonies for his 90th birthday party. He stood up — and this is well before the financial crisis. Milton Friedman died in 2006. Before the financial, it was 2004, he was 90, stood up in front of a group of people. I couldn’t be there because of another engagement and I kicked myself for not being there.

But he said, Milton, the influence of your book and I’m going to promise you, the Great Depression shouldn’t have happened and because of what you did and wrote, it’s not going to happen again. We will not let it happen again.

He said that in 2006 to the face of Milton Friedman — I mean, 2004. Two years later, Friedman passed away. Two years later, Bernanke had to take the playbook from that mammoth monetary history and put it into effect and saved us from the Great Depression.

RITHOLTZ: How incredibly prescient in 2004.

SIEGEL: Wow. Yes. Wow.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 21 June 2020:

1. The Age of We Need Each Other – Charles Eisenstein

It was a painful yet beautiful clarifying experience that asked me, “Why are you doing this work? Is it because you hope to become a celebrated intellectual? Or do you really care about serving the healing of the world?” The experience of failure revealed my secret hopes and motivations.

I had to admit there was some of both motivations, self and service. OK, well, a lot of both. I realized I had to let go of the first motive, or it would occlude the second. Around that time I had a vision of a spiritual being that came to me and said, “Charles, is it really your wish that the work you do fulfill its potential and exercise its right role in the evolution of all things?”

“Yes,” I said, “that is my wish.”

“OK then,” said the being. “I can make that happen, but you will have to pay a price. The price is that you will never be recognized for your role. The story you are speaking will change the world, but you will never get credit for it. You will never get wealth, fame, or prestige. Do you agree to pay that price?”

I tried to worm my way out of it, but the being was unyielding. If it was going to be either-or, how could I live with myself knowing in my heart of hearts I’d betrayed my purpose? So I consented to its offer.

2. John Collison – Growing the Internet Economy – [Invest Like the Best, EP.178] – Patrick O’Shaughnessy and John Collison

Yeah, again, just like people kind of had a hard time believing that we weren’t done with the payment systems that we had at the time. Similarly, I think people don’t really intuit this. I mean, if you look at the raw numbers, the internet economy is a very small fraction of the overall economy depending on who you believe, five, 6%, something like that, but the vast majority of internet, of the economic activity is not internet enabled. I think it’s fairly clear to all of us that that is going to flip. We’re going to end up with actually a majority that’s internet enabled, but that means we’re really at a shockingly early point in that Sigmoid growth curve.

The thing that gets me excited, and one of the things that we spent a lot of time thinking about at Stripe and trying to drive is what the second order effects are of that shift, and I think people spend lots of time thinking about first order effects of technology changes and so if you were an analyst looking at the growth of computers in the fifties and sixties, you might be wondering what are the effects going to be of computers getting faster? Presumably you’d say, well, banks are going to be able to run their calculations faster and airlines are going to be able to handle even more routes in the route calculation computers.

You’d look as what computers were already used for and just kind of project that forward more and faster. You would never forecast video games. I mean, to someone in the fifties, it would seem absurd, the notion that you could have so much excess computing power and it’s so cheap that we’re just going to use this for this wildly wasteful rendering of triangles. I don’t know if you saw the Unreal Five demo, but imagine showing that to somebody in the 1950s. It really, I think their brain might have exploded, or similarly with smartphones…

…  I mean, I still find technology some of the most interesting, one of the most interesting places to look, because what I find so exciting about technology is from a business point of view, it’s positive-sum, right? So many other businesses are essentially, I mean, they learn not to talk about them this way, but there’s all these like business euphemisms for the fact that, there’s a fixed amount of supply in this industry and we’re getting really good price discipline. That’s one of these like investor-y euphemisms and for not competing too much on price or revenue optimization and things like that, as you look at something like real estate, in many kinds of parts of the world, barriers to building mean that part of what makes it a good business is the fact that there’s a fixed number of assets that can be monetized.

3. We Can Protect the Economy From Pandemics. Why Didn’t We? – Evan Ratliff

Kraut, however, had an even more ambitious idea in mind. What if, instead of simply hedging its own life insurance business in the case of a pandemic, Munich Re could use the same concept to insure other businesses against them? Business interruption insurance, the policies that protect companies against income losses from disasters like fires or hurricanes, often explicitly excluded disease. (And when it didn’t, insurers could still use the ambiguity to deny claims.) The risk was thought to be too large, too unpredictable to quantify. But Munich Re had already proven it could cover its own life insurance risk in pandemics, and now it had a partner in Metabiota that specialized in seemingly unpredictable outbreaks. What if they could create and sell a business interruption insurance policy that covered epidemics, starting with acutely vulnerable industries like travel and hospitality? They could then pass on the payout risk from those policies to the same types of investors who had bought their life risk. “There is a bit of financial alchemy to the whole thing,” Wolfe told me later. “You really are creating something from nothing.”

At the same time, Wolfe had been working to operate Metabiota more like a technology company. In 2015, he hired Nita Madhav, an epidemiologist who’d spent 10 years modeling catastrophes at a company called AIR Worldwide, one of a handful of firms the insurance industry relies on to compute extreme risks. (Munich Re, in fact, had worked with AIR epidemiological models in its life insurance calculations.) Madhav’s mandate at Metabiota was to build the industry’s most comprehensive pandemic model. Her team, which eventually grew to include data scientists, epidemiologists, programmers, actuaries, and social scientists, began by painstakingly gathering historical data on thousands of major disease outbreaks dating back to the 1918 flu. Her colleagues had recently created what they called the Epidemic Preparedness Index, an assessment of 188 countries’ capacity to respond to outbreaks. Together, the two efforts informed an infectious disease model and software platform. A user could begin with a set of parameters around a hypothetical virus—its geographic origin point, how easily it was transmitted, its virulence—and then run scenarios exploring how the disease spread around the world. The goal was a model that could, for example, help a manufacturer understand how a disease might impact its supply chain or a drug company plan for how a treatment would need to be distributed.

4. The Observer Effect: Marc Andreessen– Sriram Krishan

Well, I will pick three! It’s kind of the holy trinity of our modern dilemma. It’s health care, it’s education and it’s housing. It’s the big three. So basically, what’s happened is the industries in which we build like crazy, they have crashing prices. And so we build TVs like crazy, we build cars like crazy, we make food like crazy. The price on all that stuff has really fallen dramatically over the last 20 years which is an incredibly good thing for ordinary people. Falling prices are really, really good for people because you can buy more for every dollar.

There are two ways here: you get paid more or everything you buy is cheaper. And people always really underestimate, I think, the benefits of everything getting cheaper. And so the stuff that we actually build is getting cheaper all the time. And that’s fantastic. The stuff we *don’t* build, and very specifically, we don’t have housing, we’re not building schools, and we’re not building anything close to the health care system that we should have – for those things the prices just are skyrocketing. That’s where you get this zero sum politics.I think people have a very keen level of awareness. They can’t put it into formal economic terms but they have a keen awareness of the markers of a modern western lifestyle. It’s things like – I want to be able to own a house, I want to live in a nice neighborhood and I want to be able to send my kids to a really good school and I want to have really good health care.

And those are the three things where the price levels are increasingly out of reach. However we built those systems in the past, it’s failing us. And so we need to rethink. Quite literally, it’s like, okay, where are the schools? Where are the hospitals? Where are the houses?

5. The Resilience Of Markets – Jamie Catherwood

Wall Street and American markets have endured the tests of many challenging episodes in history. The Buttonwood Agreement was signed in 1792, and since then the United States of America has experienced its fair share of wars, recessions, political upheaval, Presidential assassinations, natural disasters, disease, terrorist attacks, and more. Despite all these adversities, however, the institution of Wall Street and US markets have held firm as a bastion of American finance. Take a moment to really consider this feat, as it’s truly remarkable. Much has changed in the centuries since the Buttonwood Agreement was signed by 24 stockbrokers outside of 68 Wall Street on May 17th, 1792. Yet, much has stayed the same. If you read any archival document from the years between 1792 and 2020, it is quickly evident that investors have always found reasons to fear the continued function of American markets due to some new policy or action by an institution.

However, New York is still considered the global capital of financial markets, and Wall Street continues to be revered by investors worldwide. So, this week’s Sunday Reads will focus on the first decades of financial markets in the United States, and the groundwork that our predecessors laid for investors today.

6. Five Tips for Recovering From Covid-19 Panic Selling – Barry Ritholtz

No. 1. Recognize what happened: What motivated you to sell? Was it something you heard on the news? An emotional impulse? Did you give any thought to how selling fit in your broader investment strategy? Or was it merely an itch that had to be scratched?

Figuring out what goes into your own decision-making is the key to reducing mistakes. Analyze your process: Determine what factors should have an impact when making buy and sell decisions. Then, face up to what actually drives those decisions. If there is a mismatch between those two, recognize it and make adjustments.

If you don’t know how you got lost, what is to stop you from getting lost the next time this happens? Remember, there always is a next time.

7. Same As It Ever Was – Morgan Housel

The nuclear bomb was developed to end World War II. Within a decade, America and the Soviets had bombs capable of ending the world – all of it.

But there was a weird silver lining to how deadly these bombs were: countries were unlikely to use them in battle because they raised the stakes so high. Wipe out an enemy’s capital city and they’ll do the same to you 60 seconds later – so why bother? John F. Kennedy said neither country wanted “a war that would leave not one Rome intact but two Carthages destroyed.”

By 1960 we got around this predicament by going the other way. We built smaller, less deadly nuclear bombs. One, called Davy Crocket, was 650 times less powerful than the bomb dropped on Hiroshima, and could be fired by one person like a bazooka. We built nuclear landmines that could fit in a backpack, with a warhead the size of a shoebox.

These tiny nukes felt more responsible, less risky. We could use them without ending the world.

But they backfired.

Small nuclear bombs were more likely to actually be used in combat. That was their whole purpose. They lowered the bar of justified use.

It changed the game, all for the worse.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 14 June 2020:

1. ‘Superforecasters’ Are Making Eerily Accurate Predictions About COVID-19. Our Leaders Could Learn From Their Approach – Tara Law

But in his spare time, Roth moonlights as a “superforecaster”— a member of a team of ordinary people who make surprisingly accurate predictions for the forecasting firm Good Judgment, Inc. In recent months, businesses, governments and other institutions have worked with superforecasters like Roth to help them understand how the COVID-19 outbreak might unfold.

That a group of semi-professional forecasters would somehow have accurate insight into anything as complex and important as the coronavirus pandemic sounds like the stuff of science fiction, or even ancient history—like the seers of old who told fortunes to kings and nobles. But the team behind Good Judgment, Inc. and the organization it spun off from (the research initiative Good Judgment Project) say they have established a rigorous system for identifying talented forecasters and sharpening their abilities…

… It’s unlikely that superforecasters like Roth could ever fully replace subject-matter experts. Michael Jackson, an associate scientific investigator at Kaiser Permanente Washington Health Research Institute, cautions that superforecasters are a “black box,” meaning their less-than-scientific methods make it impossible to vet their work in the same way that a scientist’s output would undergo peer review. And Philip Tetlock, a professor at the University of Pennsylvania and a co-founder of Good Judgment, acknowledges that there are times in which expertise is crucial (for example, he notes that some public health experts warned about the possibility of a coronavirus pandemic early in the outbreak.)

However, Tetlock argues that superforecasters have skills that experts may not: for example, they may also be more flexible than traditional scientists, because they’re not bound to a particular discipline or approach. Their predictions incorporate research and hard data, but also news reports and gut feelings. That way of working may increase their overall accuracy, says Tetlock…

… Superforecasters aren’t just smart, Tetlock says; they also tend to be actively open-minded and curious. They’re in “perpetual beta” mode, as he puts it in his book on the topic, Superforecasting: The Art and Science of Prediction— always striving to update their beliefs and improve themselves. 

2. 6 Stoic Rituals That Will Make You Happy – Daily Stoic

The Stoics are saying there are no good or bad events, there’s only perception. Shakespeare encapsulated it well when he said, “Nothing either good nor bad but thinking makes it so.” Shakespeare and the Stoics are saying that the world around us is indifferent, it is objective. The Stoics are saying, “This happened to me,” is not the same as, “This happened to me and that’s bad.” They’re saying if you stop at the first part, you will be much more resilient and much more able to make some good out of anything that happens…

… Don’t set your mind on things you don’t possess as if they were yours, but count the blessings you actually possess and think how much you would desire them if they weren’t already yours.

3. Left-Handed DNA Has a Biological Role Within a Dynamic Genetic Code – Rachel Brazil

The DNA molecule was composed of the traditional sugar backbones and nucleotide pairs, but rather than the well-known right-handed spiral of the double helix structure, famously discovered by Watson and Crick in 1953, Wells’s polymer spiraled in the opposite direction, giving it a zigzag appearance.

Whether this bizarre form of DNA existed in cells and had any function, and what that might be, was hotly debated for nearly half a century. But research has recently confirmed its biological relevance. So-called Z-DNA is now thought to play roles in cancer and autoimmune diseases, and last year scientists confirmed its link to three inherited neurological disorders. Today, molecular biologists are beginning to understand that certain stretches of DNA can flip from the right- to the left-handed conformation as part of a dynamic code that controls how some RNA transcripts are edited. The hunt is now on to discover drugs that could target Z-DNA and the proteins that bind to it, in order to manipulate the expression of local genes.

4. The Story Behind Shundrawn Thomas’s Open Letter to Asset Management – Dawn Kissi

In “Breaking the Silence,” an open letter that has generated both internal and external praise since it was published on June 1, the Chicago-based African-American president of a firm with more than $900 billion under management wrote of a decades-old encounter with police in a Chicago suburb. 

“It was profiling, pure and simple,” he wrote of the incident in which an officer unholstered his firearm after pulling him over for no other reason than Thomas being a black man in a white neighborhood. Unfortunately, this wasn’t an isolated incident; he has suffered numerous similar indignities throughout his life. In the wake of the recent killings across the United States of three African-Americans in separate incidents that have generated worldwide protests demanding an end to racial inequities, Thomas was moved to do what many feel needed to be done: “break the silence as it pertains to issues of prejudice and discrimination” and give voice to the pain.

5. 294: Cullen Roche Explains The Ultimate Breakdown Of The Federal Reserve – The Pomp Podcast

Ser Jing here: The link above brings you to a podcast hosted by Anthony Pompliano featuring investor Cullen Roche. Roche writes an excellent blog called Pragmatic Capitalism that offers his thoughts on how the modern monetary system works. In the podcast, Roche talks about his views on how the Federal Reserve actually works, and he shares his thoughts on why a lot of common beliefs about the US’s central bank (such as “money printing” will cause hyperinflation, and the Fed has manipulated interest rates to unsustainable lows) are wrong. Some of Roche’s commentary fly over my head because I don’t have a good grasp on the monetary system or the inner-workings of the Federal Reserve. But I still find Roche’s views important to note to gain a broader perspective on money. 

6. The 6 Traits That Make a Rule Breaker – David Gardner

My what is I like to find the most innovative companies of our time and I like to make sure they’re not just R&D firms, or they’re not just a hope and a dream. They’re actually real-world companies delivering outstanding solutions, often disrupting the industries in which they are participating; but they’re real innovators and they could be potentially big-time innovators. Like maybe one day they’d grow up and be Amazon.com.

Those are my whats. I’ve always loved those companies. I think you and I should spend almost all of our time, if we’re trying to beat the market and we care enough to select stocks, I think we should be spending a lot of our time, anyway, looking at those kinds of companies. That’s my what.

My how is that I tend to buy and not really to sell.

I try to get in before the vast majority of others and out well after the vast majority of others. That’s a quote that I’ve sometimes used in the past — one of my maybe legacy lines one day that I’m hoping to just convey — how we do the “how of Rule Breaker Investing.” In before the vast majority of others. Out well after the vast majority of others and it’s that second part that’s so key. That’s kind of our how.

And what I said in that meeting 10 years ago was, “I think that’s why this approach works, because a lot of people who might go for innovators think that those are really high-priced stocks, or they’re momentum stocks, or you need to figure out when to sell those because they’re going to collapse, probably, at some point. I mean, you need to act in a volatile manner around volatile innovators.”

But we, instead, on this podcast and in my services Motley Fool Stock Advisor and Motley Fool Rule Breakers, I’ve got a scorecard almost two decades long, now, of stocks where we basically bought them and then kept holding. We did the opposite of how people think they should approach innovators.

And I think, because that puts us in a small corner of the big room of the investment world, there are not many others that have painted themselves into that little corner where we are. We’re kind of lonely, there, and that’s great news for you and me because most of the rest of the world will not adopt this investment approach and so that’s our what and that’s our how and when you put those two things together you have, I hope, a market-beating strategy you can use the rest of your life.

7. Watch This Black Hole Blow Bubbles – Dennis Overbye

In another example of casual cosmic malevolence, astronomers published a movie last month of what they said was a black hole shooting blobs of electrified gas and energy into space at almost the speed of light.

From a distance — quite a distance, of some 10,000 light-years — the black hole looked like a cosmic pop gun, propelling puffs of light across the sky. Up close … well you wouldn’t want to be up close, as clouds of sterilizing radiation a trillion miles wide swept by…

… “Consequences can be indirect,” she said. “A huge increase in cosmic rays during the Pliocene might have been indirectly responsible for the extinction of some ocean animals — not due to irradiation but due to damage to the ozone layer they created. So maybe crossing the path of a jet could indeed create a massive extinction, though we are a bit speculating here.”

As the bubbles traveled outward, they lit up the thin interstellar gas with a traveling light show.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 7 June 2020:

1. Complexity Bias: Why We Prefer Complicated to Simple – Farnam Street

Meanwhile, we may also see complexity where only chaos exists. This tendency manifests in many forms, such as conspiracy theories, superstition, folklore, and logical fallacies. The distinction between complexity and chaos is not a semantic one. When we imagine that something chaotic is in fact complex, we are seeing it as having an order and more predictability than is warranted. In fact, there is no real order, and prediction is incredibly difficult at best.

Complexity bias is interesting because the majority of cognitive biases occur in order to save mental energy. For example, confirmation bias enables us to avoid the effort associated with updating our beliefs. We stick to our existing opinions and ignore information that contradicts them. Availability bias is a means of avoiding the effort of considering everything we know about a topic. It may seem like the opposite is true, but complexity bias is, in fact, another cognitive shortcut. By opting for impenetrable solutions, we sidestep the need to understand. Of the fight-or-flight responses, complexity bias is the flight response. It is a means of turning away from a problem or concept and labeling it as too confusing. If you think something is harder than it is, you surrender your responsibility to understand it.

2. Ben Thompson – Platforms, Ecosystems, and Aggregators – [Invest Like the Best, EP.176] – Patrick O’Shaughnessy & Ben Thompson

Why? Because the content they seek out is evergreen. It’s always available. I can go watch Orange is the New Black, one of the original shows and it’s valuable to me today. So the marginal value of Netflix is increasing as their customer base increases as opposed to a lot of services where the more customers there are, it degrades in quality and becomes even harder to acquire them and then they have to spend marketing costs to acquire them.

And that’s just where companies fall apart. So many companies based their sort of projections and calculations on the cost of acquiring a customer at the beginning. The problem is at the beginning you’re serving your ideal customer, the one that really wants your product, and so they’re going to look over the problems with your product, et cetera, et cetera. They’re going to be easy to acquire and usually your marginal customer gets more and more difficult to acquire. You have to spend more money, and what happens is Facebook and Google actually end up taking all your profit over time.

3. An Unlikely Hero for 1906, 1929…and Today – Jason Zweig

“I might never have gone into the banking business,” he later recalled, if he hadn’t gotten into a shouting match with the head of a local bank about its reluctance to make small loans to individual borrowers. In 1904, Giannini founded a bank of his own in San Francisco, called Bank of Italy, to do just that.

Then, on April 18, 1906, an earthquake struck the Bay Area, killing more than 3,000 people and setting the city ablaze.

Realizing the fires were heading toward his bank, Giannini heaved $80,000 of gold and cash into two horse-drawn produce wagons. He buried the money under crates of oranges to hide it from looters rampaging through the streets. For weeks afterward, he recalled later, the bank’s money smelled like oranges.

By the next day, the Bank of Italy had burned to the ground. But Giannini rode in from his home in San Mateo, where he had stashed the money. With San Francisco still smoldering, he set up a desk on the wharf and plunked a sack of gold on it, under a cardboard sign on a stick that read BANK OF ITALY: OPEN FOR BUSINESS.

Giannini lent to almost everyone with a legitimate need, on one condition: They had to raise half of what they needed elsewhere. That forced them to enlist their friends and family in the recovery of their business or the rebuilding of their home.

Then Giannini would lend the other half, often accepting little more than people’s character as their collateral. After all, he’d just gotten others to assume half the bank’s risk. What’s more, much of the hoarded cash the borrowers raised from their friends and family ended up as Bank of Italy deposits—or was invested in shares of its stock.

4. Permanent Assumptions – Morgan Housel

Some things are always changing and can’t be known. There can also be a handful of things you have unshakable faith in – your permanent assumptions.

Realizing it’s not inconsistent to have no view about the future path of some things but unwavering views about the path of others is how you stay humble without giving up. And the good news when the world is a dark cloud of uncertainty is that those permanent assumptions tend to be what matter most over time.

5. The Day Coronavirus Nearly Broke the Financial Markets – Justin Baer

Mr. Rao, who was working remotely that Monday, walked down the 20 steps to his home office at 4:30 a.m. to discover the debt markets were already in disarray. He started calling the senior Wall Street executives he knew at many of the big banks.

Executives told him that Sunday’s emergency Fed rate cut had swung a swath of interest-rate swap contracts in banks’ favor. Companies had locked in superlow interest rates on future debt sales over the past year. But when rates fell even further, the companies suddenly owed additional collateral.

On that Monday, banks had to account for all that new collateral as assets on their books.

So when Mr. Rao called senior executives for an explanation on why they wouldn’t trade, they had the same refrain: There was no room to buy bonds and other assets and still remain in compliance with tougher guidelines imposed by regulators after the previous financial crisis. In other words, capital rules intended to make the financial system safer were, at least in this instance, draining liquidity from the markets.

One senior bank executive leveled with him: “We can’t bid on anything that adds to the balance sheet right now.”

At the same time, the surge in stock-market volatility, along with falling prices on mortgage bonds, had forced margin calls on many investment funds. The additional collateral they owed banks was also booked as assets, adding billions more.

The slump in mortgage bonds was so vast it crushed a group of investors that had borrowed from banks to juice their returns: real-estate investment funds.

The Fed’s bond-buying program, unveiled that Sunday, had earmarked some $200 billion for mortgage-bond purchases. But by Monday bond managers discovered the Fed purchases, while well-intentioned, weren’t nearly enough.

“On that first day, the Fed got completely run over by the market,” said Dan Ivascyn, who manages one of the world’s biggest bond funds and serves as investment chief at Pacific Investment Management Co. “That’s where REITs and other leveraged-mortgage products started getting into serious trouble.”

6. How Pandemics End – Gina Kolata

When will the Covid-19 pandemic end? And how?

According to historians, pandemics typically have two types of endings: the medical, which occurs when the incidence and death rates plummet, and the social, when the epidemic of fear about the disease wanes.

“When people ask, ‘When will this end?,’ they are asking about the social ending,” said Dr. Jeremy Greene, a historian of medicine at Johns Hopkins.

In other words, an end can occur not because a disease has been vanquished but because people grow tired of panic mode and learn to live with a disease. Allan Brandt, a Harvard historian, said something similar was happening with Covid-19: “As we have seen in the debate about opening the economy, many questions about the so-called end are determined not by medical and public health data but by sociopolitical processes.”

Endings “are very, very messy,” said Dora Vargha, a historian at the University of Exeter. “Looking back, we have a weak narrative. For whom does the epidemic end, and who gets to say?”

7. Massive Up and Down Moves in Stocks in the Same Year Are More Common Than You Think – Ben Carlson

Here are some reminders I like to consider when thinking through big moves like this:

• I cannot predict the direction of the stock market over the short-term.
• I cannot predict the magnitude of stock market moves.
• I cannot predict when market moves are going to start or stop.
• The stock market doesn’t always make sense nor does it have to.
• The stock market has the ability to make everyone look foolish at times.

Things looked bleak in March. Now things look not so bad considering the S&P 500 is down just 2-3% on the year. What happens next is anyone’s guess.

I don’t know.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 31 May 2020:

1. We Need To Talk About Ergodicity – Joe Wiggins

A system is deemed ergodic if the expected value of an activity performed by a group is the same as for an individual carrying out the same action over time.  Rolling a dice is an example of an ergodic system.  If 500 people roll a fair six-sided dice once, the expected value is the same as if I alone roll a fair six-sided dice 500 times.

The Russian roulette example is a non-ergodic system.  The expected value of the group differs sharply to the average of an individual carrying out the action through time.  In the group situation the average outcome is to live and become wealthy.  As an individual performing the activity through time – on average – I am dead.  In a non-ergodic system the group expected value is deeply misleading as it pertains to individual experience.

Although these may seem like somewhat frivolous examples, the concept of ergodicity is incredibly important.  Much of classical economics assumes about human behaviour is founded on the expected average outcome of the group (see Expected Utility Theory).  This works under the assumption that most environments or situations are ergodic, when in fact this is not the case.

2. Not even wrong: ways to predict tech – Ben Evans

A lot of really important technologies started out looking like expensive, impractical toys. The engineering wasn’t finished, the building blocks didn’t fit together, the volumes were too low and the manufacturing process was new and imperfect. In parallel, many or even most important things propose some new way of doing things, or even an entirely new thing to do. So it doesn’t work, it’s expensive, and it’s silly. It’s a toy. 

Some of the most important things of the last 100 years or so looked like this – aircraft, cars, telephones, mobile phones and personal computers were all dismissed.

But on the other hand, plenty of things that looked like useless toys never did become anything more. 

This means that there is no predictive value in saying ‘that doesn’t work’ or ‘that looks like a toy’ – and that there is also no predictive value in saying ‘people always say that’. As Pauli put it, statements like this are ‘not even wrong’ – they give no insight into what will happen. You have to go one level further. You have to ask ‘do you have a theory for why this will get better, or why it won’t, and for why people will change their behaviour, or for why they won’t’?

3. My Son’s Entrepreneurship Journey – Investment Pilgrim

In Primary 4, he and his classmates started playing this traditional local game called “kuti kuti” where each player will control a small plastic animal. Each player is to maneuver his/her animal around the table with the aim of resting his/her animal over the other player’s animal. Once that is done, the game is won and the winner takes possession of the loser’s animal. This was very much like how I used to play the flag erasers with my friends when I was younger.

He started playing with large plastic animals. One weekend, he was out with his maternal grandfather when he saw a pack of the plastic animals selling for $2.50 for a pack of 10. He bought the pack, or his grandfather did anyway, and brought his new toys to school. He managed to sell each plastic animal for $1! In a few days, he sold all of them. Pretty good margin, lol.

He did not tell me any of this until it was over. When I found out about his transgressions away from school work, I did what any responsible parent would do. I laid down the law.

“Son, I need to tell you that your school work is the most important thing for you at this point.”

Pause.

“I’d also like you to think about growing this business.”

4. The Fourth Great Unlock – Scott Galloway

Jeff Bezos, at the outset of their earnings call, warned shareholders they “may want to take a seat.” He has done this several times. “This” is snatching profits from the jaws of shareholders to reinvest in the firm. With the exception of Netflix, no firm has been given this much runway. Bezos has used every foot of it to set aloft a vessel that nobody will likely catch. Imagine a Spruce Goose but at twice the speed of sound.

Bezos told investors that the $4 billion in profits they were expecting would be reinvested. The investment had a theme: Covid-19. Specifically, Bezos outlined a vision for at-home Covid tests, plasma donors, PPE equipment, distancing, additional compensation, and protocols to adapt to a new world. Jeff Bezos is developing the earth’s first “vaccinated” supply chain.

The genius here is breathtaking. Walmart can’t follow, as they don’t own their distribution for last-mile commerce. Outside of Walmart, few firms have the balance sheet to pull this off. Maybe FedEx, UPS, or Prologis? But it’s unlikely they could make this sort of investment, this fast — it would be perceived as reckless.

5. The Epic Games Primer: Parts I-VI Directory – Matthew Ball & Jacob Novak

Epic Games was founded by Tim Sweeney and Mark Rein in 1991. Sweeney is the CEO and majority/controlling shareholder, while Tencent owns roughly 40%. As a private company, Epic does not publicly disclose its financials. According to press reports, it was valued at roughly $15B in 2018 (when it last raised capital) and is currently raising more at a “significantly higher” price, per Bloomberg. 

Compared to Facebook, Amazon, Apple, Microsoft and Google, which are worth $600B to $1.4T, Epic’s valuation is modest. However, Epic has the potential to become one of the largest, most influential tech companies in the world. This might seem hyperbolic to those who know Epic only as the marker of the hit video game Fortnite: Battle Royale. In fact, even long-time fans of Epic’s games might find such a pronouncement odd given Fortnite has generated more revenue in three years than the rest of Epic has in almost as many decades. But behind the scenes, it looks increasingly likely that Epic will be at the very center of society’s digital future. 

6. Uncertainty II – Howard Marks

By definition, people who lack the expertise in a given field required for superior judgments also lack the expertise required to assess their level of expertise.  As I mentioned, they qualify as John Kenneth Galbraith’s forecasters “who don’t know they don’t know.”

While re-reading my memo, I realized I had left out an important further ramification.  Not only do most people fail to possess superior expertise – as well as the ability to know it – but they also lack the ability to figure out who does have it.  That’s the catch: you may have to be an expert in a field in order to be able to figure out who the true experts are.  That’s why research in most fields is subjected to “peer review,” meaning a review by experts, (not to be confused with “a jury of one’s peers,” meaning other lay citizens)…

… Nowadays, like everyone else, I’m bombarded with conflicting views regarding the wisdom of rapidly reopening the U.S. economy.  Yet I recognize that not only is my opinion on that topic of little value, but I also don’t have the expertise required to know for sure whose opinion does count. What I do know is that the last thing I should do is choose an expert because his or her opinions agree with mine, and allow confirmation bias to affect my decision…

… So (a) true expertise is scarce and limited in scope, (b) expertise and predictive ability are two different things, and (c) we all should be careful about whom we listen to and how much weight we give to their pronouncements.

What we probably don’t realize is that walking can be a kind of a behavioral preventive against depression. It benefits us on many levels, physical and psychological. Walking helps to produce protein molecules in muscle and brain that help repair wear and tear. These muscle and brain molecules—myokines and neurotrophic factors, respectively—have been intensively studied in recent years for their health effects. We are discovering that they act almost as a kind of fertilizer that assists in the growth of cells and regulation of metabolism. They also reduce certain types of inflammation.

These essential molecules are produced by movement and the increased brain and body activity created by movement. If you’re not moving about, placing heart and muscle under a bit of positive stress and strain, these molecules aren’t produced in sufficient quantities to perform their roles.

7. If Robots Steal So Many Jobs, Why Aren’t They Saving Us Now? – Matt Simon

Modern Capitalism has never seen anything quite like the novel coronavirus SARS-CoV-2. In a matter of months, the deadly contagious bug has spread around the world, hobbling any economy in its path. In the United States, where consumer spending accounts for more than two-thirds of economic activity, commerce has come to a standstill as people stay home to slow the virus’ spread. Hotels and restaurants and airlines have taken massive hits; Delta has cut its flight capacity by 70 percent. One in five US households has already lost work. And that’s all because of the vulnerabilities of the human worker. When we get sick—or we have to shelter in place to avoid getting sick—the work that depends on people grinds to a stop.

Why haven’t the machines saved us yet?

This economic catastrophe is blowing up the myth of the worker robot and AI takeover. We’ve been led to believe that a new wave of automation is here, made possible by smarter AI and more sophisticated robots. San Francisco has even considered a tax on robots—replace a human with a machine, and pay a price. The problem will get so bad, argue folks like former presidential candidate Andrew Yang, we’ll need a universal basic income to support our displaced human workers. (UBI seems to have actually arrived, in a sense, with the Trump administration’s proposed payout to American households to weather the crisis: A $1,000 check for most, with an extra $500 for every child.)

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 24 May 2020:

1. The Three Sides of Risk – Morgan Housel

At a conference a few months ago I was asked what skiing taught me about investing. This was on stage, where you can’t ponder your answer – you have to blurt out whatever you can think of.

I didn’t think skiing taught me anything about investing. But one incident came to mind…

…But it opened my eyes to the idea that there are three distinct sides of risk:

• The odds you will get hit.
• The average consequences of getting hit.
• The tail-end consequences of getting hit.

The first two are easy to grasp. It’s the third that’s hardest to learn, and can often only be learned through experience.

But once you go through something like that, you realize that the tail-end consequences – the low-probability, high-impact events – are all that matter.

2. Doordash and Pizza Arbitrage – Ranjan Roy

In March 2019 a good friend who owns a few pizza restaurants messaged me (this friend has made appearances in prior Margins’ pieces). For over a decade, he resisted adding delivery as an option for his restaurants. He felt it would detract from focusing on the dine-in experience and result in trying to compete with Domino’s.

But he had suddenly started getting customers calling in with complaints about their deliveries.

Customers called in saying their pizza was delivered cold. Or the wrong pizza was delivered and they wanted a new pizza.

Again, none of his restaurants delivered.

He realized that a delivery option had mysteriously appeared on their company’s Google Listing. The delivery option was created by Doordash…

…. But he brought up another problem – the prices were off. He was frustrated that customers were seeing incorrectly low prices. A pizza that he charged $24 for was listed as $16 by Doordash…

… If someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long. You’d net a clean $8 profit per pizza

3. Mental Models – Oliver Sung

Surfing

You won’t be able to surf if you don’t catch the wave. And if you do catch it, you can stay on it for long. The trick is catching the one that lasts the longest as early as possible and not to get off. Microsoft was a result of a 16-year-old catching a wave of software revolution right on the edge.

Cockroach Theory

When bad news are revealed, there may be many more related negative events yet to be revealed. There’s never just one cockroach in the kitchen.

Minsky Moment

A sudden collapse of asset values marking the end of a credit cycle or an economic cycle.

Framing

The way a question or situation is framed can determine your response and lead to an action decided based on whether the options are presented with positive or negative connotations. Mixed with the narrative fallacy, framing can turn out dangerous for errors in decision making and might be used as power over other’s behavior.

Hindsight Bias

Also called creeping determinism, it’s the tendency of overestimating one’s ability to have predicted an outcome that could not possibly have been predicted. Hindsight bias is dangerous because it hinders one from learning from past mistakes. If we feel like we knew it all along, it means we won’t stop to examine why something really happened.

4. Our weird behavior during the pandemic is messing with AI models – Will Douglas Heaven

It took less than a week at the end of February for the top 10 Amazon search terms in multiple countries to fill up with products related to covid-19. You can track the spread of the pandemic by what we shopped for: the items peaked first in Italy, followed by Spain, France, Canada, and the US. The UK and Germany lag slightly behind. “It’s an incredible transition in the space of five days,” says Rael Cline, Nozzle’s CEO. The ripple effects have been seen across retail supply chains.

But they have also affected artificial intelligence, causing hiccups for the algorithms that run behind the scenes in inventory management, fraud detection, marketing, and more. Machine-learning models trained on normal human behavior are now finding that normal has changed, and some are no longer working as they should. 

5. Common Myths About the Federal Reserve – Cullen Roche

Myth #5 – The Fed “Manipulates” Interest Rates

It’s very common to hear that the Federal Reserve “manipulates interest rates”.  This is based on the idea that interest rates would be better “set” if they were controlled by a private market instead of a government entity like a Central Bank.  Unfortunately, this is based on a lack of understanding of banking and central banking.

A Central Bank is little more than a central clearinghouse where payments settle.  Before there were central banks payments between banks were settled at private clearinghouses.  The problem with this arrangement was that banks would stop settling payments during financial panics and this would exacerbate depressions.  A central bank leverages government powers to ensure that this doesn’t happen.  The 2008 financial crisis was a great example of this.  When private banks stopped lending to one another the Fed operated as the “lender of last resort”.  This meant that even though many banks were insolvent mom and pop could still buy necessities via the banking system because most banks didn’t stop operating thanks to the Fed’s backstop.  Had the Fed not lent to firms in need the crisis would have bankrupted even the largest banks and the economy would have certainly entered a substantially more catastrophic crisis.  You literally wouldn’t have been able to buy anything unless you had cash under your mattress.

In order to operate as a central clearinghouse the Fed needs to set an overnight rate at which it lends to banks.  Since the Fed requires most banks to utilize this system the banks naturally try to lend their reserve deposits which puts downward pressure on overnight interest rates.  Therefore, the natural rate of interest on overnight loans is 0% in the Fed Funds market.  This means the Fed actually has to manipulate rates HIGHER from this 0% rate. This is not theoretical, this is simply a mathematical reality of a system with a Fed Funds market in which banks operate within this closed system.

6. Why Walking Matters—Now More Than Ever – Shane O’Mara

What we probably don’t realize is that walking can be a kind of a behavioral preventive against depression. It benefits us on many levels, physical and psychological. Walking helps to produce protein molecules in muscle and brain that help repair wear and tear. These muscle and brain molecules—myokines and neurotrophic factors, respectively—have been intensively studied in recent years for their health effects. We are discovering that they act almost as a kind of fertilizer that assists in the growth of cells and regulation of metabolism. They also reduce certain types of inflammation.

These essential molecules are produced by movement and the increased brain and body activity created by movement. If you’re not moving about, placing heart and muscle under a bit of positive stress and strain, these molecules aren’t produced in sufficient quantities to perform their roles.

7. Pandemics & Markets: Part II – Jamie Catherwood

As news of the Spanish Flu began to spread, a September 28, 1918 issue of The Commercial and Financial Chronicle regrettably stated:

‘An epidemic of Spanish influenza has checked business to some extent, but is not expected to be lasting. The Department of Health of this city has just voted $25,000 to fight influenza, which it calls pneumonia in epidemic form. It is said to be in reality the old-fashioned grippe [flu].’

In hindsight we all know how inaccurate this prediction turned out to be, but it is mind boggling to think about how someone could think this so shortly before the Spanish Flu took the world by storm.

Well, this quote inspired me to do a little further digging into what, if any, of the major themes and questions we’re asking today were also prevalent during the Spanish Flu of 1918. Turns out there is a lot in common!

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 17 May 2020:

1. Why the Most Futuristic Investor in Tech Wants to Back Society’s Outcasts – Polina Marinova

As humans, we construct this very linear narrative where you say, “I did X, and then I did Y, and it led to Z.” If you’re really intellectually honest, it’s really this crazy ball of randomness. You just never know. So randomly, there was a guy in my investment banking group whose dad worked with a famous investor. We got to pitch that famous investor, whose name was Bill Conway, one of the co-founders of the Carlyle Group.

Bill’s disposition at the moment when we met was one of enthusiasm and support for a bunch of young entrepreneurially naive guys. And he bet on us. What that meant was helping us capitalize our management company, which would become Lux Capital.

2. Does Covid-19 Prove the Stock Market Is Inefficient? – Robert Shiller & Burton Malkiel

The economics profession has an explanation for this difficulty based on the idea that markets are “efficient.” If markets are perfect, prices will incorporate all publicly available information about the future. Speculative prices will be a “random walk,” to borrow a phrase from the physicists and statisticians. The changes in prices will look random because they respond only to the news. News, by the very fact that it is new, has to be unforecastable, otherwise it is not really news and would have been reflected in prices yesterday. The market is smarter than any individual, the theory goes, because it incorporates information of the smartest traders who keep their separate real information secret, until their trades cause it to be revealed in market prices…

… EMH [Efficient Market Hypothesis] does not imply that prices will always be “correct” or that all market participants are always rational. There is abundant evidence that many (perhaps even most) market participants are far from rational. But even if price setting was always determined by rational profit-maximizing investors, prices (which depend on imperfect forecasts) can never be “correct.” They are “wrong” all the time. EMH implies that we can never be sure whether they are too high or too low. And any profits attributable to judgments that are more accurate than the market consensus will not represent unexploited arbitrage possibilities.

3. Israeli engineers created an open-source hack for making Covid-19 ventilators – Chase Purdy

A team of scientists in Israel this week unveiled what they’re calling the AmboVent-1690-108, an inexpensive ventilator system made from a handful of off-the-shelf items. Project leader David Alkaher also heads the technology work of the Israeli Air Force’s confidential Unit 108, which is comprised of electronics specialists. Whereas a typical hospital ventilator costs around $40,000, the AmboVent system can be made for about $500 to $1,000…

… More on the makeshift side, the French sporting goods company Decathalon has been selling scuba gear to the Rome-based Institute of Studies for the Integration of Systems, where it’s being enhanced with 3D-printed valve parts to make basic ventilator systems. The institute notes the devices are only for emergencies where it’s impossible to find official healthcare supplies.

4. The Most Important Stock Investment Lessons I Wish I Had Learned Earlier – Safal Niveshak

Tony shares the story of an Arabic date farmer he met who had inherited an orchard that had about a thousand trees. As the farmer was showing Tony around his orchard, and took him to something like a hundred trees that were recently planted, Tony asked him out of curiosity, “How long will it take this tree to bear fruit?”

The farmer replied, “Well this particular variety will bear fruit in about 20 years. But that is not good enough for the market. It may be about 40 years before we can actually sell it.”

Tony replied, “I have never heard this. I did not know this. Are there other date trees that would produce faster?” Meanwhile, he looked at all those trees that were being harvested and realized that this farmer could not have possibly planted them.

The farmer tells Tony, “Okay. Here’s my grandfather and my father, great grandfather.”

5. Does Better Virus Response Lead to Better Stock Market Outcomes? – Ben Carlson

I went through each of these lists to check the year-to-date performance of each country’s stock market to see if there is any correlation between getting a handle on the virus and stock market performance in 2020. I looked at both ETF and local currency performance..

… I guess my main takeaway after going through the data is this — the stock market is rarely a good gauge of the health and strength of your country, especially when dealing with a crisis like this.

The stock market is not the economy but it’s also not its citizens or government leaders or crisis response team either.

6. The Great Depression – Gary Richardson

An example of the former is the Fed’s decision to raise interest rates in 1928 and 1929. The Fed did this in an attempt to limit speculation in securities markets. This action slowed economic activity in the United States. Because the international gold standard linked interest rates and monetary policies among participating nations, the Fed’s actions triggered recessions in nations around the globe. The Fed repeated this mistake when responding to the international financial crisis in the fall of 1931. This website explores these issues in greater depth in our entries on the stock market crash of 1929 and the financial crises of 1931 through 1933.

An example of the latter is the Fed’s failure to act as a lender of last resort during the banking panics that began in the fall of 1930 and ended with the banking holiday in the winter of 1933. This website explores this issue in essays on the banking panics of 1930 to 1931, the banking acts of 1932, and the banking holiday of 1933.

7. One Young Harvard Grad’s Quixotic Quest to Disrupt Private Equity – Richard Teitelbaum

Bain’s investment process was flawed, according to the report. For example, for a prospective target to pass muster, the firm required a projected internal rate of return of 25 percent over the life of the investment. That was a common projected IRR. “The first thing I noticed was this massive dispersion of returns,” Rasmussen says. Bain would generate seven or eight times on some of its investments, but with others, zero, and the number that hit the 25 percent return bogey was infinitesimally small. The upshot was thousands of man-hours wasted modeling investment outcomes because the forecasts were inevitably wrong.

There was another surprise. The single best predictor of future returns had nothing to do with the amount of leverage employed, operational changes, company management, or even the underlying soundness of the business. The driver of superior returns was the price paid by the private-equity firm — companies purchased at a lower ratio of price to earnings before interest, taxes, depreciation, and amortization tended overwhelmingly to outperform.

The cheapest 25 percent of private-equity deals based on price-to-Ebitda accounted for 60 percent of the industry’s profits. Cheap buys made good investments. “With the inexpensive ones, there’s a margin of safety,” Rasmussen says.

The firm’s touted skills for selecting companies, arranging financing, and improving operations proved to be a mirage. Instead the best private-equity deals relied on a simple formula — “small, cheap, and levered,” as Rasmussen puts it. He expected the study to prompt major changes at the firm. “Now that we have the data, how do we change our behavior?” he wondered.

8. Young Bulls and Old Bears – Michael Batnick

What do Bill Gross, Sam Zell, Jeremy Grantham and Carl Icahn have in common? They’re all old, they’ve all had brilliant careers, and they’re all bearish on the stock market. (From April 2016)

Whether it be in music or in sports or in markets, the prior generation never thinks “kids” will ever measure up. Even Benjamin Graham- the man who basically invented value investing- fell victim to the “get off my lawn syndrome.”

From Roger Lowenstein’s Buffett: The Making of an American Capitalist.

“I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook “Graham & Dodd” was first published; but the situation has changed”

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.

Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!

But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.

Here are the articles for the week ending 10 May 2020:

1. How To Achieve 12,000% Returns Against The Odds – Chin Hui Leong

The table below is a sample of stocks that I have held for nine years or more.

The returns may look phenomenal now… but the outlook was not like that over a decade ago….

There I was, in the middle of the Global Financial Crisis, back in early 2008, a downturn so severe that it was eventually billed as the worst recession to happen in over 50 years.

Things were looking bad. Really bad.

And there I was, right in the centre of the economic storm.

If today’s COVID-19 economic scenario feels similar, you might want to stick around for what I am about to share.

2. Why Isn’t The Market Down More? – Sean Stannard-Stockton

The most important thing to keep in mind is that S&P 500 is often referred to as “the market,” but of course the S&P 500 is essentially the 500 largest companies in the US, which, especially during this crisis, are not indicative of the economy as a whole. And the largest 25 companies make up nearly 40% of the S&P 500…

…Now whatever you think about those companies, most all investors would agree that they are far, far more likely to survive this crisis than the average company. And, in fact, with so many smaller companies struggling it seems very likely that many of these large companies will thrive in a post-Coronavirus world in which their competition has been dealt a huge setback.

So looked at this way, the fact that the S&P 500 is only down 16% from its highs does not suggest that the market thinks the economy will be OK, but rather that the largest companies in the world will see their way though, and as demand returns they will face much less competition.

If instead, the market was reflecting investors being naively optimistic about the economic impact of Coronavirus, then you would expect to see economically sensitive stocks leading the recovery. But the reverse is true.

3. Scientists Create Jet Engine Powered By Only Electricity – Dan Robitzski

A prototype jet engine can propel itself without using any fossil fuels, potentially paving the way for carbon-neutral air travel.

The device compresses air and ionizes it with microwaves, generating plasma that thrusts it forward, according to research published Tuesday in the journal AIP Advances. That means planes may someday fly using just electricity and the air around them as fuel.

4. What Have We Learned Here? – Morgan Housel

The two most important economic stories are the size of the business collapse and the magnitude of the stimulus. It’s easy to focus on the former because it’s personal and devastating while ignoring the latter because it’s political and hard to contextualize. But they are equally huge. Despite 15% unemployment, Goldman Sachs estimates household income will be higher in Q2 2020 than it was in Q2 2019, largely because of stimulus…

…Done right, forecasting is a delicate balance of probabilities. But people want certainty, especially when the stakes are high. The people who make forecasting models probably have less faith in their accuracy than those who read them, if only because things like confidence intervals are rarely discussed in the media.

5. Inside the Biggest Oil Meltdown in History – Leah McGrath Goodman

Many of the market participants caught in the crossfire were not sophisticated investors, but simply members of the retail public who did not understand how oil futures contracts work — and that they can expire or trade negative.

When pressed about these investors’ portfolio losses, CME chairman Terrence Duffy, who appeared on CNBC in the aftermath of negative oil prices, did not mince words. “Futures contracts have been around for hundreds of years and I will tell you, since Day 1, everybody knows that it’s unlimited losses in futures,” he said. “So nobody should be under the perception that it can’t go below zero.”

6. Owning Stocks is a Long-Term Project – Safal Niveshak

“Mountains should be climbed with as little effort as possible and without desire. The reality of your own nature should determine the speed. If you become restless, speed up. If you become winded, slow down. You climb the mountain in an equilibrium between restlessness and exhaustion. Then, when you are no longer thinking ahead, each footstep isn’t just a means to an an end but a unique event in itself. This leaf has jagged edges. This rock looks loose. From this place the snow is less visible, even though closer. These are things you should notice anyway. To live only for some future goal is shallow. It’s the sides of the mountain that sustain life, not the top. Here’s where things grow.”

7. Why Most Post-Pandemic Predictions Will Be Totally Wrong – Rob Walker

When a cataclysmic event is fresh or still unfolding, it’s hard to see beyond its immediate contours and even harder to imagine what the next unpredictable events will be and how those will affect whatever change is in motion right now. As this moment ought to remind us, the most influential and important events are the ones that emerge spontaneously and with little warning — like the coronavirus itself.

But it’s so seductively easy to double down on sweeping pronouncements: E-sports will replace football and basketball, movie theaters will never return, and telemedicine will become the new normal. (We’ve even made a few.)

Anything is possible, but take a closer look at how often definitive predictions about permanent change are simply extrapolations of recently observable trends taken to some maximum extreme.

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Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.