Links for 10th April, 2019

  1. “In an ideal world, you shouldn’t have to amortize. The prices will all be reflective of reality, there will always be a rational buyer at a rational price if you want to sell. In an ideal world corporates will not rollover their liquid fund investments every day either – they will know how much money they need, and they will only withdraw that much, leaving enough back in the liquid fund.”
    ..
    ..
    The always excellent Deepak Shenoy explains the how, and some of the why when it comes to amortization in debt funds. If you are interested in corporate finance, finance in general, or policy-making when it comes to finance, this is well worth your time.
    ..
    ..
  2. “Within the overall context of having asset allocation in an individual’s portfolio, passive investments will play an important role. It will increase overtime as a complementary strategy. It will not be just be plain vanilla passive but smart beta products. Look at these three benefits. Better returns profile, lower risk profile and wider diversification as compared to normal other products. So, it is a clear cut thing from the growth perspective.”..
    ..
    An interview on Bloomberg Quint about smart beta products. As with the first link, a must read if you are a student of finance, especially from India.
    ..
    ..
  3. ““If you wanted a snapshot of all your financial assets in one place on your mobile or to share information securely with a lender, it was previously not possible,” says Atluri Krishna Prasad, chief executive of Onemoney, one of the five entities that have secured in-principle approval from the Reserve Bank of India to operate as an account aggregator. “Now, if you give Onemoney your consent, we will fetch all your financial information from different sources, aggregate it and give you a single window with the consolidated information.””
    ..
    ..
    If you were worried about data privacy in India, we’re only just getting started. A nice article in FactorDaily that explains how more data sharing between financial organizations will soon be on it’s way.
    ..
    ..
  4. “Here, as in so many cases, the analysts haven’t got beyond an intuition that Johan Cruyff, the Dutch father of Barcelona’s football, had nearly 50 years ago. Cruyff played for Barça in the 1970s, coached the team from 1988 to 1996 and largely invented the passing game that the club still play. He could rhapsodise for hours about players who were “turned” the right way. He cared much less about a player’s size and speed.”
    ..
    ..
    Just one of many excerpt-able snippets from a fascinating article about how a sporting club is using every last little bit of information about, well, everything to make Barca (for that is the football club in question) even better.
    ..
    ..
  5. “He’s agreed to forfeit about $50m. It’s not clear what’s happened to the other $73m, but Rimasauskas was a prolific and baroque money-launderer who squirreled cash away in Cyprus, Lithuania, Hungary, Slovakia, and Latvia. Google has said that “We detected this fraud and promptly alerted the authorities. We recouped the funds and we’re pleased this matter is resolved.”Rimasauskas will be sentenced on July 29. He faces up to 30 years.”
    ..
    ..
    One of those articles that truly help you understand Coase/Demsetz and industrial organization overall. But if I am to be honest, a great read in its own right.
Advertisements

Links for 3rd April, 2019

  1. “There is something touchingly human in the dispersal of these games—in the vision it evokes of travelers packing for long, hard journeys and remembering to take with them something to kill time, something to satisfy their impulse to play. Anthropologists often regard these old games as novelties, Crist told me, but they can narrate plenty about their era. “Games function socially as a way for people to interact with one another,” he said. “People will play games when they vaguely know each other, to get to know one another.”
    Samanth Subramanian on the oldest board game known to us – dates back to around four thousand years ago. Games were, and are, a way to connect socially with people.
    ..
    ..
  2. “But even with increasingly powerful computers and more efficient algorithms thrown at the problem, some whole numbers have stubbornly refused to yield any winning tickets. And 33 was an especially stubborn case: Until Booker found his solution, it was one of only two integers left below 100 (excluding the ones for which solutions definitely don’t exist) that still couldn’t be expressed as a sum of three cubes. With 33 out of the way, the only one left is 42.”
    The rest of the article, fascinating in its own rights, contains many more excerpt-able quotes. But if you are a fan, as I am, it had to be an excerpt that ended with that sentence!
    ..
    ..
  3. “Nine years after giving grants for youth in Uganda to start businesses, those who didn’t receive grants had caught up on income! Nevertheless, “grants had lasting impacts on assets, skilled work, and possibly child health, but had little effect on mortality, fertility, health or education.”
    Honestly, there’s no particular reason why I chose to go with this quote in particular. David Evans has done yeoman service in putting together extremely brief summaries of I don’t know how many papers presented at the annual Center for the Study of African Economics (CSAE) conference.
    ..
    ..
  4. “Take the example of San Francisco; with nicer streets, even more people might want to move there. That would push up rents by an amount roughly equal to the value created — putting the gains from the higher quality of life into the pockets of landowners. In a normal market economy, those higher rents would then induce more construction and, eventually, a corresponding decline in rents. But San Francisco is a “not in my backyard” locale where the amount of new construction just isn’t that high, for legal and regulatory reasons. Again, as both Ricardo and George realized, the incidence of the benefit falls upon the very scarce factor, namely land.”
    What happens when you apply the Ricardian theory of rent to San Francisco? Tyler Cowen provides the answer. Also think about where else, besides land, this argument might apply. Cough *education* cough.
    ..
    ..
  5. “As Ansón puts it: “In principle, because of how it started, a tapa is something that you eat with one hand, a cocktail stick, a fork, or a spoon, allowing you to hold a drink in the other. This style of eating creates a kind of harmony between solid and liquid.”
    This will, if you are as big a fan of food as I am, take up a lot of your time – but also, it will be worth it. Also, if you are anything like me, it will make you want to go to Spain! A lovely, interactive website about Spanish gastronomy.

Links for 20th March, 2019

  1. “In 1950, cement production was equal to that of steel; in the years since, it has increased 25-fold, more than three times as fast as its metallic construction partner.”
    A mostly negative view of concrete, and how pervasive it has become over the years and across the world, in the Guardian. I wouldn’t necessarily argue the view that concrete is all bad, but the data is worth thinking about. Also keep an eye out for a mention of Vaclav Smil later on in the article – an author worth reading.
  2. “Achieving victory over another man, defeating them, forcing them to submit—it’s not about saying “I’m better than you.” It’s saying “I’m better than I was yesterday.” It’s why almost every competition ends with a hug and a thank you. Because each gave the other something—the opportunity to learn, to progress and to become better. At “Camp Settle This Like Men,” and at MMA gyms around the world, black belt instructors lend their time and expertise to lead classes on kickboxing, jiu jitsu, boxing and self-defense. When we teach others our skills, we make them better, hone our own knowledge, and create stronger opponents, that we can measure ourselves against.”
    An article from the Quillette about “Camp Settle This Like Men”. Interesting on multiple levels – masculine toxicity, respect (the earning and the giving of it), and about the plus side of mixed martial arts.
  3. “You have no idea how hard it is. Yes, there’s a lot of work that goes into getting the teams aligned and getting the right leaders in place who believe in these priorities, and being able to execute on that. And even the process of writing something like this is really helpful, because you can talk about a lot of things in the abstract. But it’s not until you actually put it down on paper and say, “Yeah, here are the trade-offs. We’re going to focus on reducing the permanence of how much data we have around, and that’s going to make these things harder.” Then you get all these teams inside the company that come out of the woodwork with all the issues that that’s going to cause for other things that we really care about.”
    Maybe it is because I was teaching industrial organization this semester – but rather than everything else that everybody focused upon, this is the part of the interview that leaped out for me. Organizing a firm is hard. Organizing teams within a firm is harder. There’s a very long reading list that suggests itself about this – it begins from Coase, and ends at Horowitz – for now.
  4. “Today, we’re celebrating the objects and ideas dreamt up and created by inventors, scientists and dreamers. Thanks to over 110 institutions, including National Council of Science Museums and Tata Institute of Fundamental Research from India, as well as dedicated curators and archivists from 23 countries around the world, you can explore a millennia of human progress in Once Upon a Try, now available on Google Arts & Culture. With over 400 interactive collections, it’s the largest online exhibition about inventions, discoveries, and innovations ever created.”
    What a time to be alive. I haven’t seen a lot on the site, principally because I would get nothing else done – but this is a truly bookmark-able resource. Again, what a time to be alive.
  5. “In India, in my opinion, we ape the West too much, particularly America too much. I lived in Silicon Valley so I know both the strengths and the weaknesses. The weaknesses, the short-termist thinking. Very few companies stay the long haul and we have taken more inspiration from the Japanese on these than from the Americans, in this particular area.”
    Lots and lots of interesting stuff here, and the whole interview is worth listening/reading. But of all of those things, this was the most interesting one to me – the influence of Japanese and American start-up culture on Zoho – a remarkable Indian firm.

Links for 5th March, 2019

  1. “Using a neural network trained on widely available weather forecasts and historical turbine data, we configured the DeepMind system to predict wind power output 36 hours ahead of actual generation. Based on these predictions, our model recommends how to make optimal hourly delivery commitments to the power grid a full day in advance. This is important, because energy sources that can be scheduled (i.e. can deliver a set amount of electricity at a set time) are often more valuable to the grid.”
    The big problem with renewable energy is its utter unpredictability – which is why we will always struggle to move to a world that uses renewable energy as a primary source. Unless, of course, we figure out how to make great batteries. But in the meantime, anything that helps us predict the pattern of availability of wind and solar power is great news.
  2. “Still, people do break Google’s protection. CAPTCHAs are an ongoing arms race that neither side will ever win. The AI technology which makes Google’s approach so hard to fool is the same technology that is adapted to fool it.Just wait until that AI is convincing enough to fool you.
    Sweet dreams, human.”
    Ever clicked on the “I’m a human” button and wondered why it seemed like such a stupid idea. Well, uh, not stupid. Not stupid at all.
  3. “This further tells us that people are buying and selling homes. It’s just that the builders are not a part of this transaction.”
    This is a very short excerpt, but especially for Indians, this article is well worth reading (and Vivek Kaul is well worth following!). Home loans are going up every year, but unsold inventory is also going up every year? What gives?
  4. “All of economics is meant to be about people’s behavior. So, what is behavioral economics, and how does it differ from the rest of economics?”
    An essay about behavioral economics and its many applications, written by two people who are more familiar with the field than almost anybody else. There isn’t much here for people who are already familiar with the field – but if you are new to behavioral economics, this is an excellent introduction.
  5. “Two landmark events helped pushed along the proliferation of Sichuan cuisine in New York. In 2005, the peppercorn ban was lifted, though imported peppercorns still had to be heat treated and were thus less potent than they might have been. (This restriction was finally lifted in 2018.) ”
    I was in New York in 2007, and knew nothing of how to try new food, and it is a major source of regret. Especially when I read articles like these.

Links for 20th February, 2019

  1. “There is no amount of growth that can’t be destroyed by an investor’s temptation to grab too much of it. And there is no opportunity so appealing that it will catch the eye of someone who refuses to look.But greed and fear aren’t always character flaws. People with the best intentions and ethics fall for their temptation. The two traits evolve from something innocent: the amount of confidence we have that our actions influence our outcomes.”
    I am currently teaching, at the Gokhale Institute, a course on Behavioral Finance. This blog post will be a part of the required reading when I teach the section on overconfidence (and it’s mirror image)
  2. “A Facebook press officer said, in a prepared statement: “This is one study of many on this topic, and it should be considered that way.” The statement quoted from the study itself, which noted that “Facebook produces large benefits for its users,” and that “any discussion of social media’s downsides should not obscure the fact that it fulfills deep and widespread needs.”
    What happens if you go cold turkey on Facebook? I haven’t read the paper itself, but this article from the NYT is a useful read – but not for the usual Facebook bashing reasons. There are benefits to using Facebook, for all of us. I myself no longer have the Facebook app on my phone, but freely admit to checking Facebook every now and then on the browser on my phone.
  3. “Mere hours into the first day of the Google block, my devices have tried to reach Google’s servers more often than the 15,000 times they tried to ping Facebook’s the entire week before. By the end of the week, my devices have tried to communicate with Google’s servers over 100,000 times, comparable to Amazon, at 293,000 times during its block. Most of Google’s pings seem to be in the form of trackers, ads, and resources built into websites. ”
    Speaking of which, what might life look like if you decided to go cold turkey on Google? Much worse, it turns out – your productivity takes a direct hit, as the article above makes clear.
  4. “We’ve made the case for the divergence among equipment manufacturers before: Ultimately robots and excavators aren’t dependent on the same business cycles. This is now playing out.”
    Partially because my own research during the PhD was on this topic, but also because it is a useful way to start thinking about which sectors in the economy tend to move together, and which don’t. More – does this relationship hold over time?
  5. “But the rental market is largely fragmented and unorganized. The build-to-rent model that has worked well globally in many countries hasn’t even scratched the surface here. It is a space ripe for disruption.And in the past 3-4 years, a slew of startups have begun to do just that, particularly targeting young adults and millennials (those in their 20s and early 30s) who need a place to stay when they move out of their parents’ nest or are moving to a new city.”
    This had to happen sooner or later in India – it was simply a function of the way the real estate market is, and has been in India for some time. Watch this space – I’d argue that future growth in India’s real estate sector will happen in this fashion.