H1 CY16 - AlphaGO

Markets are getting too euphoric, with indices turning near to all time highs. This is total contradiction to the ground realities. On ground, industry is still living with hope and possibilities. Banks are in dire-most state and Messihas aka Rajans are evicted - one can understand where the puck is going. 

The wind sector story which started with too many bells and whistles, isn't being supported on ground level. Evacuation of electricity/payment by SEBs is still problem. The focus of investors is shifting towards Solar, where IRRs r lower, but evacuation is not a problem yet, as its size is tiny compared to wind.

Wat concerns me presently is the velocity of rate of change in tech ecosystem, which is disturbing each-and-every industry. Robotics/AI/Drones/synthetic bio/VR/batteries/fintech are changing at a rapid speed. I worry, that this will lead to unemployment, chaos, decrease in earning power of masses, and more inequality, with power shifting in hands of very few people eventually - looks like there will be only 2 classes - cash rich and credit rich. Labour intensive states can lose 'labour-cost-advantage' in age of cheap robots. Already job-creation is a nightmare. This is wat Jeff Weiner, linkedin guy, wrote in recent letter. 

           "Remember that dystopian view of the future in which technology displaces millions of people from their jobs? It's happening. In the last three weeks alone, Foxconn announced it will replace 60,000 factory workers with robots, a former CEO of McDonald’s said given rising wages, the same would happen throughout their franchises, Walmart announced plans to start testing drones in its warehouses, and Elon Musk predicted fully autonomous car technology would arrive within two years."

Considering that, we are looking for industries where rate of change is less/they are helped by the new technologies.  The capital raised is undeployed as valuations of desirables did not come in our range. Will wait.

H2 CY15 - Oh! The Humanities

Same story repeating (link) - lots of talks, too much politics, and sadly nothing getting done. Looks like broadcasting such noisy frightful bureaucratic drama on the TV is taking away our mental bandwidth/higher purposes from our lives and society. Purposes like invention, progress, healthcare, basic living rights, etc etc are strangely not visible. Unequal economic distribution, leading to flow of people towards metros is leading to stress, population imbalances, corruption, anxiety, pollution - it looks like a basic fabric of cities is destroyed - Delhi is full of dust and traffic and has become gas chamber, with possibly worst air quality - link. Looks like it will lead to public health epidemic sooner or later. 

Insecurity and unequal opportunity is pretty prevalent today. Unequalness in society is caused by corruption, which inturn is caused by demanding/consuming/hoarding more than one could consume in its lifetime - typical human condition. And it stems possibly from all sort of personal feelings of inadequacies/insecurities/incompleteness/fear. Eckhart Tolle has written/said well about this. Feelings of inadequacies, leads one to accumulate more and more, and consume more and more, giving fuel to commercial entities to exploit our biases. Munger understood this quite early in his life when he quoted - I wanted to get filthy rich like Warren not because I wanted ferraris, but because I desperately wanted to get independent. People misjudge the balance between utility of money (aka personal freedom to pursue one's passions) VS ego-satisfying consumption fueled by money. One is inward virtue, other is external embellishment. [[[[[[["Personal incompleteness" was a topic of great interest to me in last few years, and I was glad to work with few schools in last 2 years - you may see this Project Flourish files here. (and for a hilarious take, see BigBangTheory's Sheldon Cooper's own feelings of incompleteness, leading him unsatisfied and anxious)]]]]]]]

Commercial entities have always flouted our inadequacies/wants and the laws-of-nature with impunity. I am glad about a new wave which has sweeped Indian fmcg sector - Baba ramdev's pitanjali is giving tough fight to incumbent evergreen fmcg players with assumed-to-be permanent indestructible moats. I think the market here was ripe for "somewhat seemingly" honest/organic entity to enter and fight against for-profit-at-any-cost entities. Such entities don't realise that the cost of selling product is not just raw-material/operating costs, but also invisible costs like long term degradation of public health/environment. Things like cokes, snacks, or financial products (CDOs etc) of the worlds may do well for a period, but sooner or later they will come crashing down as a set of public will awaken to their mis-utility. Would be glad if ramdev's or some other organic movement works rationally and succeeds here. 

Rotten Picks 

There aren't many new insights presently. Its difficult to find amalgamation of good management, good business, and right valuations and industry tailwinds at the same time. What amuses me is the constant flow of new picks/gems on the channels and investor meets. Not many talk about old picks where they would like to still buy more and more upwards - as if companies in the pocket start to stink and old ideas begin to rot like vegetables :))..... Unlike food, in investing, one needs to relish rotten picks more than fresh picks. 

There is always a no 4, no 5 and so on, in list of possible opportunities. But they are always compared against no1 and no2. The investing process may look inactive to a novices, but effort is always ON in comparing things at multiple levels. As Jason Zweig says - 99.5% of the time the right thing for people to do is nothing.

We are in good company.