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Zeal to Read Weekly Newsletter

Weekly Newsletter

Zeal to Read Weekly Newsletter

Weekly Newsletter | by 2 | on 2021-05-23 05:36

At Zebu we spend a lot of time reading news and articles that cover a wide range of topics, including investment analysis, psychology, technology, etc. We have been sharing our favourite reads with clients under our weekly ‘ Zeal to read ’.

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“Learn every day, but especially from the experiences of others. it’s cheaper!”  ― John Bogle

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News you may use

Banks to RBI: More Covid-hit cos may need recast of loans – ‘Restrictions To Contain Pandemic Have Affected Business’

Centre hikes fertiliser subsidy by 140%

Construction target for the year roughly translates into 12-13 km a day – NHAI on track to award ~2.25-trn projects this fiscal

Early showers, low mercury to buoy kharif sowing-Summer crops acreage up 21% at 80.46 lakh hectares

FMCG, Grocery Sales Hit amid Supply Chain Woes – Sales plunge 16% on month in April due to curbs in many states

FPI investment up more than 20 times from FY20 – FPIs Brought in Almost All Foreign Flows in FY21 – Foreign investments rose 80% to $80b last fiscal but ‘durable’ FDI flows were flat

Indian IT & Biz Services Market Growth Slows to 5.41% in 2020 – Reduced growth rate due to impact of pandemic on businesses: IDC

Indian refiners process less crude in April as pandemic stalls activity

Individuals get till September – Govt extends timelines for income tax compliance

Pension AUM crosses ₹6-lakh crore – On path to reach ₹30-lakh crores by 2030, says PFRDA chief; regulator floats an RFP to help design a Minimum Assured Return Scheme

RBI pays ₹99k cr dividend to govt for just 9 months – Amount Is Over 73% Higher Than Previous Fiscal’s ₹57K Cr

Second wave hit demand more than supply, says RBI – Impact On Eco Not As Severe As In Q1 Of Last Fiscal: Report

Some companies producing goods only for exports – As Sales Crash, Electronic, Phone Cos Shutter Plants – Local lockdowns, curbs on online sales and Covid infections among plant workers hurting companies

Truck rentals fall another 5-7% in first half of May- Transporters seek relief measures from govt as losses mount to ~42,000 crore

WPI Hits11-Yr High of10.49% in Apr as Metals, Fuel Prices Zoom – Indicates increase in retail inflation too; economists see a further rise in the wholesale index

Views may be of use

The Optimal Amount of Hassle

If your tolerance is zero – if you are allergic to differences in opinion, personal incentives, emotions, inefficiencies, miscommunication, and such – your odds of succeeding in anything that requires other people rounds to zero. You can’t function in the world, as Pressfield says. The other end of the spectrum – fully accepting every incidence of nonsense and hassle – is just as bad. The world will eat you alive.
Source: (https://www.collaborativefund.com/blog/the-optimal-amount-of-hassle/   )

Distribution and Demand

Look no further than Jeff Bezos and Amazon to see why Hollywood can be a distraction, but in my estimation the problem of merging content and distribution are much more fundamental. Start with the latter: distribution, properly understood, entails the build-out of physical infrastructure. Comcast needs to lay cable and fiber; DirecTV, another AT&T misadventure, needs to launch satellites and install dishes; AT&T’s core mobile business requires buying spectrum and installing cell phone towers and base stations. These are not businesses for the faint of heart, given the massive capital costs.
The payoff for this investment, though, is a competitive moat. Comcast, for example, may only compete with satellite for TV service, and the local phone company for Internet access; no other cable company is going to lay competitive cable lines, because Comcast could simply lower prices and drive them out of the market. This isn’t even predatory pricing, because the actual utilization of its infrastructure is effectively free on a marginal basis. Laying cable is expensive, but using it is cheap. That said, to the extent competition exists, it is quite brutal because it is zero sum; an AT&T customer is not Verizon customer is not a T-Mobile customer. The combination of scarcity in customers and zero marginal cost for incremental usage can lead to price wars, which T-Mobile used over the last decade to take a good amount of share from Verizon and AT&T; perhaps that is why both tried their hand at content.
Source: (https://stratechery.com/2021/distribution-and-demand/   )

Technobabble, Libertarian Derp and Bitcoin

Why are people willing to pay large sums for assets that don’t seem to do anything? The answer, obviously, is that the prices of these assets keep going up, so that early investors made a lot of money, and their success keeps drawing in new investors. This may sound to you like a speculative bubble, or maybe a Ponzi scheme — and speculative bubbles are, in effect, natural Ponzi schemes. But could a Ponzi scheme really go on for this long? Actually, yes: Bernie Madoff ran his scam for almost two decades, and might have gone even longer if the financial crisis hadn’t intervened.
Source: (https://www.nytimes.com/2021/05/20/opinion/cryptocurrency-bitcoin.html  )

A study of insurer death-claims during covid first-wave

I analyze death-claim data across nine life-insurers, accounting for 95% of India’s insurance death-claims. My aim is to compare trends between covid wave-1 period (9-months of FY21) and prior years. Data suggests that 9MFY21 death-claim growth (~4%) is in line with or even slightly below trend of prior six years (6-7%). LIC and private-insurers show divergent trends, though.
Source: (https://buggyhuman.substack.com/p/a-study-of-insurer-death-claims-during   )

Daniel Kahneman: ‘Clearly AI is going to win. How people are going to adjust is a fascinating problem

Daniel Kahneman, 87, was awarded the Nobel prize in economics in 2002 for his work on the psychology of judgment and decision-making. His first book, Thinking, Fast and Slow, a worldwide bestseller, set out his revolutionary ideas about human error and bias and how those traits might be recognised and mitigated. A new book, Noise: A Flaw in Human Judgment, written with Olivier Sibony and Cass R Sunstein, applies those ideas to organisations.
Source:(https://www.theguardian.com/books/2021/may/16/daniel-kahneman-clearly-ai-is-going-to-win-how-people-are-going-to-adjust-is-a-fascinating-problem-thinking-fast-and-slow  )

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Note: the above material is neither investment research nor financial advice. Zebu Share and Wealth Managements Private Limited [SEBI Registration No: INZ000174634] does not seek payment for or business from this email in any shape or form.

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