Leadership at large organizations

Q: How are you different form him? A: As far as ITC is concerned we should look at it from the perspective that ITC is an institution and ITC works with certain processes and a DNA that has evolved over the years. The DNA of the organisation is one off distributed leadership where we have each business, which has a management committee and has a chief executive and we have a centre that in a way is place the role of venture capitalist and a mentor and we have very clearly a DNA which says that we will do things that will make us perform in 3 dimensions – financials, environmental and social. Now this process actually drives the whole management process in the organisation. Now what I would like to certainly continue doing is to continue what I have learned and what has worked well is to enable and empower, at the same time provide sufficient input and guidance so that each of the businesses can succeed. I am a hands on person, so I have to remain hands on, but at the same time not get into the day to day operations or any backseat driving. The trick really is to be able to remain hands on, give input, give guidance but in a whole ethos of enabling and empowerment so that each business can takes it own decision and succeed in it on right.

Utility of money

Scott Adams in failure

Charlie Munger

Kaufman also summarizes Munger’s approach into a ten-point value investing principles checklist. Here it is:

1. MEASURE RISK

All investment evaluations should begin by measuring risk, especially reputational.

• Incorporate an appropriate margin of safety
• Avoid dealing with people of questionable character
• Insist upon proper compensation for risk assumed
• Always beware of inflation and interest rate exposures
• Avoid big mistakes; shun permanent capital loss

2. BE INDEPENDENT

Only in fairy tales are emperors told they’re naked.

• Objectivity and rationality require independence of thought
• Remember that just because other people agree or disagree with you doesn’t make you right or wrong – the only thing that matters is the correctness of your analysis and judgment
• Mimicking the herd invites regression to the mean (merely average performance)

3. PREPARE AHEAD

The only way to win is to work, work, work, and hope to have a few insights.

• Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day
• More important than the will to win is the will to prepare
• Develop fluency in mental models from the major academic disciplines
• If you want to get smart, the question you have to keep asking is “why, why, why?”

4. HAVE INTELLECTUAL HUMILITY

Acknowledging what you don’t know is the dawning of wisdom.

• Stay within a well-defined circle of competence
• Identify and reconcile disconfirming evidence
• Resist the craving for false precision, false certainties, etc.
• Above all, never fool yourself, and remember that you are the easiest person to fool

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

5. ANALYZE RIGOROUSLY

Use effective checklists to minimize errors and omissions.

• Determine value apart from price; progress apart from activity; wealth apart from size
• It is better to remember the obvious than to grasp the esoteric
• Be a business analyst, not a market, macroeconomic, or security analyst
• Consider totality of risk and effect; look always at potential second order and higher level impacts
• Think forwards and backwards – Invert, always invert

6. ALLOCATE ASSETS WISELY

Proper allocation of capital is an investor’s No. 1 job.

• Remember that highest and best use is always measured by the next best use (opportunity cost)
• Good ideas are rare – when the odds are greatly in your favor, bet (allocate) heavily
• Don’t “fall in love” with an investment – be situation-dependent and opportunity-driven

7. HAVE PATIENCE

Resist the natural human bias to act.

• “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily
• Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
• Be alert for the arrival of luck
• Enjoy the process along with the proceeds, because the process is where you live

8. BE DECISIVE

When proper circumstances present themselves, act with decisiveness and conviction.

• Be fearful when others are greedy, and greedy when others are fearful
• Opportunity doesn’t come often, so seize it when it comes
• Opportunity meeting the prepared mind; that’s the game

9. BE READY FOR CHANGE

Live with change and accept unremovable complexity.

• Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you
• Continually challenge and willingly amend your “best-loved ideas”
• Recognize reality even when you don’t like it – especially when you don’t like it

10. STAY FOCUSED

Keep it simple and remember what you set out to do.

• Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat
• Guard against the effects of hubris and boredom
• Don’t overlook the obvious by drowning in minutiae
• Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”

Mindfulness

Mindfulness practice is the practice of being 100 percent honest with ourselves. When we watch our own mind and body, we notice certain things that are unpleasant to realize. Since we do not like them, we try to reject them. What are the things we do not like? We do not like to detach ourselves from loved ones or to live with unloved ones. We include not only people, places, and material things into our likes and dislikes, but opinions, ideas, beliefs, and decisions as well. We do not like what naturally happens to us. We do not like, for instance, growing old, becoming sick, becoming weak, or showing our age, for we have a great desire to preserve our appearance. We do not like it when someone points out our faults, for we take great pride in ourselves. We do not like someone to be wiser than we are, for we are deluded about ourselves. These are but a few examples of our personal experience of greed, hatred, and ignorance.

As your mindfulness develops, your resentment for the change, your dislike for the unpleasant experiences, your greed for the pleasant experiences, and the notion of selfhood will be replaced by the deeper awareness of impermanence, unsatisfactoriness, and selflessness. This knowledge of reality in your experience helps you to foster a more calm, peaceful, and mature attitude toward your life. You will see what you thought in the past to be permanent is changing with such inconceivable rapidity that even your mind cannot keep up with these changes. Somehow you will be able to notice many of the changes. You will see the subtlety of impermanence and the subtlety of selflessness. This insight will show you the way to peace and happiness, and will give you the wisdom to handle your daily problems in life

Skin in the game matters!

--

Best regards,

Chaitanya

Key is to create the freedom to choose

Example where there was no FCF generation yet companies did well evwntually

Good read on Japanese bubble

http://awealthofcommonsense.com/2016/09/the-greatest-bubble-of-all-time/

60 p/e

MTM losses

Anticipation of errors has been hallmark of investing as preached by Munger - but may be when he meant errors, he meant permanent errors. There could be MTM losses if Price corrects due to 1) market related reasons 2) temporary change in underlying business aka quarterly fluctuations and 3) permanent downward change in business. I have not come across an article which lays out as to how a prudent investor/trader react to MTM situations.

Clearly, case 1 represents a buying opportunity and case 3 represents an exit opportunity; Case 2 is unique in the sense that it could happen with a general market slowdown (case 1) or a company specific issue. Several examples to demonstrate these 3 cases are Firstsource, ICICI Bank, Vaibhav Global, Rallis, IPCA labs, Bata India, KPIT and now perhaps Mindtree

Barring Vaibhav Global (Deterioration in Cash flows due to competitive reasons) and IPCA labs (Deterioration in fundamentals due to regulatory reasons), businesses have always come back and so have the prices. In rest of the cases, an investor, just like a trader, is faced with the question of exiting the weaker franchises/stocks to rotate into better ones, but how does one do this a bit more systematically?

The rise and fall of nations

Major regions of the world, including the Byzantine Empire and Europe before the Industrial Revolution, have gone through phases stretching hundreds of years with virtually no growth.

When a country like Japan, China, or India puts together a decade of strong growth, analysts should be looking not for reasons the streak will continue but for the moment when the cycle will turn

In general, however, if a country focuses on growth, development will follow.

In the United States, one of few countries where most lending is done through bonds and other credit market products rather than through banks, the credit markets started sending distress signals well before the onset of the last three recessions, in 1990, 2001, and 2007. The credit markets also send false signals on occasion, but for the most part they have been a fairly reliable bellwether.

Investment typically represents a much smaller share of the economy than consumption, often around 20 percent, but it is the most important indicator of change, because booms and busts in investment typically drive recessions and recoveries. In the United States, for example, investment is six times more volatile than consumption, and during the typical recession it contracts by more than 10 percent; while consumption doesn’t actually contract, its growth rate merely slows to about 1 percent.

Population growth is proportional to economic growth - Labor

Increase the retirement age - It is no longer valid

The essential question to ask about the impact of politics on the prospects for any economy is this one: Is the nation ready to back a reformer? To answer it, the first step is to figure out which position the nation occupies on the circle of life. Nations are most likely to change for the better when they are struggling to recover from a crisis.

The second step is to figure out whether the country has a political leader capable of rallying the popular will behind reform. In a crisis, the nation often demands a change in leadership, so look for the promising reformers among the newcomers: The crisis is likely to give them a strong mandate for change.

The European Commission president Jean-Claude Juncker captured the lament of technocrats everywhere when he remarked, “We all know what to do, we just don’t know how to get re-elected after we’ve done it.

To check the popular impression of the increasingly stagnant and dominant elite, I did a quick scan of the 2010 billionaire list and found that the top ten Indian tycoons controlled wealth equal to 12 percent of GDP—compared to only 1 percent in China. Moreover, nine of India’s top ten were holdovers from 2006 compared to zero in China, and this stagnation was relatively new; on India’s 2006 list, only five billionaires had been holdovers from 2001. A cover story I wrote for Newsweek International in September 2010 argued that the rise of crony capitalism was “India’s fatal flaw,” and it was greeted with great skepticism in Delhi’s political circles. Top officials told me that corruption is normal when a young economy is taking off, citing the robber barons who ruled America in the nineteenth century. But as economic growth fell by almost half in the years that followed, many of the same officials came to acknowledge that an abnormally high level of corruption and inequality † was one of the main factors in the slowdown.

Paths to wealth - Phil Fisher

By taking advantage of normal stock market volatility—timing done rarely, but done
well—a single downturn can provide enough bounce to cover inflation for years. It is the closest he ever came to a justification for market timing.

What are you doing your competitors aren’t doing yet?

lengthy cycles when the level of all prices would tend to fall and the value of the dollar to rise correspondingly

William o neil

William J. O'Neil

William O'Neil is likely one of  the greatest stock traders of our time. O'Neil made a large amount of money while he was only in his twenties, enough to buy a seat on the New York Stock Exchange. Today, he runs a successful investment advisory company to big money firms, and is also the creator of the CAN SLIM growth investment strategy, which the American Association of Individual Investors named  the top performing investment strategy from 1998 to 2009.This non-profit organization tracked more than 50 different investing methods, over a 12 year time period. CANSLIM showed a total gain of 2,763% over the 12 years. The CAN SLIM method is explained in O'Neil's book "How to Make Money in Stocks".

Mr. O'Neil founded "Investor's Business Daily" to compete directly with "The Wall Street Journal", and he also discovered of the "cup with handle" chart pattern.

Those closest to O'Neil that have seen his private trading returns say that they are greater than Warren Buffett's or George Soros over the same time period. Here are some of the principles that lead to his results, and why he is considered a trading legend.

#1 He sells a stock he is holding after it has gone down 7% from his purchase price.

"I make it a rule to never lose more than 7 percent on any stock I buy. If a stock drops 7 percent below my purchase price, I will automatically sell it at the market – no second-guessing, no hesitation"

#2 One of the major keys to his profitable trading was only having small losses when he was wrong. 

"The whole secret to winning in the stock market is to lose the least amount possible when you're not right."

#3 William O'Neil studied historical chart patterns relentlessly and read thousands of trading books.

"90% of the people in the stock market, professionals and amateurs alike, simply haven't done enough homework."

#4 He invested in an industries leading stocks not its laggards and dogs.

"It seldom pays to invest in laggard stocks, even if they look tantalizingly cheap. Look for, and confine your purchases to, market leaders."

#5 O'Neil 's investing style lead to big winners and small losing trades.

"Investors cash in small, easy-to-take profits and hold their losers. This tactic is exactly the opposite of correct investment procedure. Investors will sell a stock with profit before they will sell one with a loss."

#6 He did not waste his time and money playing the short side in bull markets.

"Cardinal Rule #1 is to sell short only during what you believe is a developing bear market, not a bull market."

#7 Fundamentals told O'Neil what to buy and the chart told him when to buy.

"The number one market leader is not the largest company or the one with the most recognized brand name; it's the one with the best quarterly and annual earnings growth, return on equity, profit margins, sales growth, and price action."

#8 O'Neil knew exactly what he was doing in the markets. He had a trading plan, trading principles, and rules.

"Some investors have trouble making decisions to buy or sell. In other words, they vacillate and can't make up their minds. They are unsure because they really don't know what they are doing. They do not have a plan, a set of principles, or rules to guide them and, therefore, are uncertain of what they should be doing."

#9 O'Neil traded price action not his own opinions or of anyone else.

"Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you hear on TV shows are giving you their personal opinion. And personal opinions are almost always worthless … facts and markets are far more reliable."

#10 He watched a stocks volume as part of his trading plan.

"The best way to measure a stock's supply and demand is by watching its daily trading volume. When a stock pulls back in price, you want to see volume dry up, indicating no significant selling pressure. When it rallies up in price, you want to see volume rise, which usually represents institutional buying."

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Capital Cycle

why do investors and corporate managers pay so little attention to the inverse relationship between capital spending and future investment returns? The short answer is that they appear to be infatuated with asset growth. Corporate expansion fires the imagination of both managers and shareholders. This mistaken fetishism for growth is reflected in the historic poor performance of stocks with higher growth expectations (higher valuations). Behavioural finance suggests that investors (and corporate managers) are prone to overconfidence when it comes to making forecasts. As Yogi Berra says, "It's tough to make predictions, especially about the future." As we shall see, this is especially the case when it comes to predicting future levels of demand

eg. PSU banks, Infrastructure as a sector is flawed investment theme, 

The main behavioral explanation for value stocks' long-run outperformance is excessive extrapolation by investors of multiyear growth rates. In reality, growth mean reverts faster than the market expects, making growth stocks more likely to disappoint.

eg. Why does Indian market prove otherwise? Growth has almost always worked out well for investors

Focus on supply than demand:

A rash of IPOs concentrated in a hot sector is a red flag; secondary share issuances another, as are increases in debt. Conversely, a focus on competitive conditions should alert investors to opportunities where supply conditions are benign and companies are able to maintain profitability for longer than the market expects. An understanding of competitive conditions and supply side dynamics also helps investors avoid value traps (such as US housing stocks in 2005–06).

eg. Microfinance in the Public markets and Tech startups in the private space

 The value/growth dichotomy is false. Companies in industries with a supportive supply side can justify high valuations

eg. How many branded consumer goods companies are coming up everyday?

Capital returns

Assessing management...

3 Value Investing World / by Joe Koster 

/ 2 days ago

From Capital Returns (the excerpt below was from a Marathon letter in June 2014, and provides some good pointers to help in assessing management teams):

Over the last two years, Marathon has engaged in nearly two thousand meetings with company management. This activity, along with preparation and the writing of notes, consumes most of the investment team's working hours. Yet many commentators view such meetings as a waste of time. One can see their point. Managers are now so well prepared by PR advisers that meetings can seem like a promotional exercise. Investors still turn up. But for many of them, we suspect, their purpose is to gain an informational advantage about the short-term outlook for the business – in our view, a fruitless endeavour. Given the long-term nature of our investment approach, capital allocation is of paramount importance. The prime purpose of our company meetings is to assess the skill of managers at investing money on behalf of their shareholders. 

Meeting management is not a scientific process. Rather, it involves making judgements about individuals, an activity which is prone to error (witness the rate of divorce). We go into meetings looking for answers to questions such as: does the CEO think in a long-term strategic way about the business? Understand how the capital cycle operates in their industry? Seem intelligent, energetic and passionate about the business? And interact with colleagues and others in an encouraging way? Appear trustworthy and honest? Act in a shareholder-friendly way even down to the smallest detail? 

To assess such questions, the format of the meeting is important. In general, the smaller the number of people in attendance the better. Having fewer attendees on both sides of the table – large meetings often include company managers, investor relations personnel, financial PR types, stock brokers, and other hangers-on – encourages a more open and friendly dialogue. It also reduces the risk of attendants showing off, which can result in the conversation becoming hopelessly bogged down in detail. A new and dreadful manifestation of the quest for redundant detail is the "fireside-chat" format used at many sell-side conferences, which typically involves a CEO being quizzed by the specialist analyst. The conversation generally turns into a "deep dive" into factors impacting short-term earnings, which can be of no interest to long-term investors. Questions of this sort can be ludicrous. At a recent conference we attended, the boss of a major industrial firm was asked whether we could expect that same pattern of seasonality as the year before. 

Large delegations from a company can be a sign that the CEO lacks confidence, resorting to a safety-in-numbers approach. This is often the case when dealing with companies in difficulty, as well as with many Japanese, Spanish and Italian firms. Contrast this with Geberit, the highly successful Swiss plumbing equipment company, whose CEO tends to arrive alone at our offices, having seemingly made his own travel arrangements, fitting us in between meetings with plumbers, architects and other customers. 

When it comes to discussing a company's strategy, it is alarming how frequently one finds managers confused on the topic. Too often, the CEO mistakes a short-term target – say an earnings per share target or a return on capital threshold – with a strategy. "Our strategy is to deliver a 15 per cent return on capital," they say. Real strategy, whether military or commercial, involves an assessment of the position one finds oneself in, the threats one faces, how one plans to overcome them, and how opponents might in turn respond. During his tenure at General Electric, Jack Welch required managers of GE's divisions to prepare a few simple slides describing their operating environment in terms of: what does your global competitive environment look like? In the last three years, what have your competitors done to alter the competitive landscape? In the same period, what have you done to them? How might they attack you in the future? What are your plans to leapfrog them? 

Getting CEOs to open up about their competitors can be difficult. They fear that too much openness may lead to a breach of confidentiality (professional investors are a thoroughly untrustworthy bunch) or that revelations about the firm's true market dominance might raise anti-trust issues. Besides, many managers are so fixated on growth, they fail to anticipate the likely competitor response (another example of the "insider view"). Still, on occasions something useful slips out. When a management team compliments a competitor, this can be like gold dust to investors. Learning that DMGT, the UK media company, found it hard to compete with Rightmove, the property listings website, contributed to our decision to invest in the company. 

Discussing how a firm uses investment bankers and how it makes acquisitions (e.g., whether it prefers friendly negotiated deals to contested auctions) can be revealing. Unexpected diversifications into an unrelated area may suggest that something is not right in the core business. Views on share buybacks can also be highly informative. Very few CEOs see this as a legitimate investment on a par with capital expenditure or M&A decisions, presumably due to an aversion to shrinking any aspect of the company. Many fear that buybacks are an admission that the company has run out of investment ideas. On this subject, we like to hear managers justify buybacks based on an internal valuation model, as this can then lead to an interesting discussion about valuation of their business. 

Forming impressions of the CEO's character, intelligence, energy and trustworthiness can be gleaned using a variety of questioning techniques. Intellectual honesty can be tested by asking the CEO to pick out what he or she thinks is important. To unsettle the more promotional CEOs, we like to ask what is not working and wait to see whether they have given the matter much thought. Sometimes the boss will seek to evade responsibility by asking a colleague to talk about a problematic area of the business. The CEO in denial often blames problems on a divisional boss and follows up by saying that management has now been changed. How the chief executive interacts with colleagues, such as the CFO or investor relations personnel, often reveals their leadership qualities. We like to see signs of individual curiosity at meetings – revealed, for instance, by their taking an interest in our own business. Signs of humility – say a recognition of past mistakes – give us some confidence that the chief executive has a grip on reality. 

Appearances can also be revealing. A CEO of an industrial company who wears expensive shoes, or a snappy suit, is more likely to enjoy the expensive company of investment bankers than spend his time visiting factories and customers. Signs of vanity are generally off-putting. One CEO was spotted before a meeting carefully adjusting his elaborate bouffant hair style in our washroom. Several months later, he launched a large and foolhardy acquisition. 

Meetings can also provide insights into a management's approach to costs. This frequently comes out in discussions about compensation. Learning about something as mundane as corporate travel policy can also tell us a lot. After Brazil's AmBev took over the Belgian-based Interbrew, its managers told us about a new edict limiting business-class flights to those lasting six hours or more. This insight into corporate frugality was a pointer to the same management's ability to cut costs at Anheuser-Busch – which prior to the merger sported a fleet of eight Falcon executive jets – and increase the US beer company's operating margins by a massive ten percentage points (between 2005 and 2011). We were equally impressed to learn that senior executives at another company preferred the underground to chauffeured limousine when travelling around London. The number of IR representatives in attendance is a good indicator as to how carefully a company counts its pennies. Of course, we have made mistakes when assessing management teams. But, in our view, trying to spot a great manager remains a game very much worth playing.

A mind for numbers

• Procrastination is the key for math, creativity and investing!
• Combine bursts of focus with frequent breaks - a bit like chess players taking breaks in the midst of an intense game
• Huge dividends for focused intensive work
• Solitary walk is worth a week in front of the computer trying to notch up solutions - I agree:0
• Focus -> Diffuse->Focus-> only problem is Focus with smartphones/mails/watsapps et al
• Edison would hold a marble in his hand and doze off in a chair sitting until the marble bounced off the floor and got him out of his nap
• Keep your working sessions short - much like working out at the gym

On Creativity:

• ok to be disagreeable, external feedback critical to improve, attempting to be creativity bolsters creativity, redo if you falter the first few times
• Learning a new language is a mumbo jumbo of focused attention followed by a super diffused mode of plugging the words into one's conversation
• Key to assimilation - Move chunks of interpretation into long term memory not so much into working memory

Long turn is not as bad as it is made out to be:)

GDP growth alone doesnot make sense!

http://evonomics.com/we-desperately-need-a-twenty-first-century-view-of-the-economy-en/

Excess Returns

Ratan Tata on Making a difference

https://www.facebook.com/RatanNavalTata/videos/521375658066903/

Multi tasking

A few weeks ago, I returned to the classroom of Dennis Dalton, the most important college professor of my life. From the back of an amphitheater seating several hundred students, I realized how much things had evolved at Columbia and Barnard. The lecture hall was now equipped with a wireless sound system, webcams, video projectors, wireless internet. Students were using computers to record the lecture and to take notes. Heads were buried in screens, the tap tap of hundreds of keyboards like rain on the roof.

On this afternoon, April 16, 2008, Dalton was describing the satyagraha of Mahatma Gandhi, building the discussion around the Amritsar massacre in 1919, when British colonial soldiers opened fire on 10,000 unarmed Indian men, women and children trapped in Jallianwala Bagh Garden. For 39 years, Professor Dalton has been inspiring Columbia and Barnard students with his two semester political theory series that introduces undergrads to the ideas of Gandhi, Thoreau, Mill, Malcolm X, King, Plato, Lao Tzu. His lectures are about themes, connections between disparate minds, the powerful role of the individual in shaping our world.

Dalton is a life changer, and this was one of his last lectures before retirement.

Over the course of a riveting 75-minute discussion of the birth of Gandhian non-violent activism, I found myself becoming increasingly distressed as I watched students cruising Facebook, checking out the NY Times, editing photo collections, texting, reading People Magazine, shopping for jeans, dresses, sweaters, and shoes on Ebay, Urban Outfitters and J. Crew, reorganizing their social calendars, emailing on Gmail and AOL, playing solitaire, doing homework for other classes, chatting on AIM, and buying tickets on Expedia (I made a list because of my disbelief). From my perspective in the back of the room, while Dalton vividly described desperate Indian mothers throwing their children into a deep well to escape the barrage of bullets, I noticed that a girl in front of me was putting her credit card information into Urban Outfitters.com. She had finally found her shoes!

When the class was over I rode the train home heartbroken, composing a letter to the students, which Dalton distributed the next day. Then I started investigating. Unfortunately, what I observed was not an isolated incident. Classrooms across America have been overrun by the multi-tasking virus. Teachers are bereft. This is the year that Facebook has taken residence in the national classroom.

Students defend this trend by citing their generation’s enhanced ability to multi-task. Unfortunately, the human mind cannot, in fact, multi-task without drastically reducing the quality of our processing. Brain activation for listening is cut in half if the person is trying to process visual input at the same time. A recent study at The British Institute of Psychiatry showed that checking your email while performing another creative task decreases your IQ in the moment 10 points. That is the equivalent of not sleeping for 36 hours—more than twice the impact of smoking marijuana. But to be honest, on the educational front, multi-tasking feels to me like a symptom of a broader sense of alienation.

I know what it is like to be disengaged. In fact, the crisis that played a large role in ending my chess career was rooted in becoming disconnected from my natural love for learning. 

Throughout my youth, I had been a creative, aggressive chess player. I loved the battle, and wild, dynamic chess felt like an extension of my being. Then, in my late teens a coach urged me to play in the opposite style, his style of quiet, positional, cold-blooded prophylaxis. Instead of cultivating my natural strengths, he boxed me into the cookie cutter mold he knew. In time, I lost touch with my intuitive feeling for chess, and without an internal compass I foundered in the swells of fame and high-pressure competition.

I see myself in the eyes of so many kids today. Too many primary, elementary, and high schoolers are being boxed into the mold of conformity required by big classes, competition for grades, tests with multiple-choice questions.

The first grader who leaps to his feet when he figures out the math problem is diagnosed as ADHD and medicated to sit quietly with the class. Young learners have immense pressure to perform, to get good grades, but no one is listening to the nuance of their minds. They feel suppressed, they are suppressed, and by the time students get to college, they have become disconnected from the love of learning. Then they are asked to read 1000 pages in a week and skimming is the only solution. Many of the students who actually were engaged in the Gandhi lecture, the ones who wanted to learn more than to shop, were taking notes on their computers in a frenzy, researching events online while Dalton described them, typing every last word of the lecture. But Dalton had already supplied them with a detailed course packet with all the relevant dates and facts. His classroom is an environment for reflection, introspection, and letting resonant themes sink into your being. Unfortunately, to these college students, the notion of delighting in the subtle ripples of learning is almost laughable. Who has the time?

The societal implications of this educational crisis are huge and the issue must be addressed creatively.

We cannot afford to lose a generation to apathetic disengagement. Part of the responsibility lies in public policies like No Child Left Behind, the standardized tests that are turning education into a forced march, and a culture that bombards us with so much stimulation that it is difficult to know what to focus on. But part of the burden also lies with parents, teachers and coaches, and with students themselves. I recently tried to persuade two smart 11-year-olds to give up video games for three weeks. One agreed to the experiment and also agreed to send me a description of how the process felt. The other simply couldn’t imagine life without the PSP, even for a day. Here was an eleven-year-old self-proclaimed incorrigible video game addict!

This story has a happy ending. In the final month of classes, Dennis Dalton discussed the issues of multi-tasking with his students, and many responded. Last week when I went back to hear the final lecture of Dalton’s Barnard career, there were only a few kids surfing the internet—nearly all the students seemed riveted. Many told me they were relieved to have turned off their computers and relaxed into listening. A number of my old classmates came, and afterwards we threw a party for our teacher. After four decades inspiring college minds, he has decided to nip apathy in the bud by teaching younger kids. He will start with high school, but Dennis Dalton, one of our culture’s greatest minds, dreams of teaching kindergarten.

Afterword from Josh:

Thanks to all of you for the powerful responses. I want to address a couple of the issues raised.

We obviously live in a world that bombards us with information, and we feel the need to respond to stimulus as it comes in. The problem with this is that we get stretched along the superficial outer layers of many things. I believe in depth over breadth in the learning process. Let’s say we have three skills to learn. The typical approach is to take them all on at once. It is much more effective to plunge deeply into one, touch Quality, and then transfer that feeling of Quality over to the others. A martial artist, for example, should internalize one technique very deeply instead of trying to learn 10 or 15 superficially.

This approach engages the unconscious, creative aspects of our minds, and we start making thematic connections which greatly accelerate growth. It is also important to point out that deep presence is required for a state of neural plasticity to be triggered—our brain does not re-map effectively when we are skipping along the surface.

As for Jose’s question—“How do you remain focused all the time?”—you don’t. It’s useful to build triggers for the zone, so you can slip into it at will. Then, once we know we can attain a state of intense concentration, we are free to let it go and recover.

I learned this lesson in my late teens/early twenties trying to stay concentrated for 8 hours a day, two weeks at a time in world chess championships—I would burn out. When I started taking mini breaks, my endurance and quality of focus surged. Stress and recovery should be our rhythms, and physical interval training can be an excellent tool for improving mental recovery. One of many problems with multi-tasking is that the frenetic skipping leaves little room for relaxation, and thus our reservoir for energetic presence is constantly depleted.

Tim, now I think it’s important for us to home in on the root of the problem. Multi-tasking, in my opinion, is just a symptom of a broader cultural disconnect that emerges from too much rigidity and too little creativity in our educational and corporate worlds. If we love what we are doing, odds are we will want to focus on it. So the solution is two pronged—help people discover the love, and arm them with strategies to zone in when they want to. The second I addressed above. The first, I will tackle below:

The path to mastery and to engagement is highly individualized—this is a truism that much of our educational system ignores. Those who succeed at the elite levels of any discipline have built relationships to learning around subtle introspective sensitivity. They understand how their minds work, and both cultivate strengths and take on weaknesses through their unique natural voice. They have learned to open communication between their conscious and unconscious minds, and construct repertoires around moments of creative inspiration. They have built triggers for their peak performance state, learned how to funnel emotion into deep focus, turned adversity to their advantage as a way of life—and they have done all of this in a manner and language that feels natural to them. That is how they seem so unobstructed, so fluid…they are just being themselves. Like children.

My road from innocence to alienation to a renewed childlike love for learning is the catalyst for my writing, my educational nonprofit, and my commitment to helping kids shine. As parents, teachers, and coaches, we must reach children when they are young, nurture their natural curiosity, help them understand their minds. Teachers have a responsibility to listen first—is a child auditory, kinesthetic, or visual? Are they naturally extroverted or introverted? What excites them? What gets their creative juices flowing? How can we take that unique potential and help it grow? How can we help our child enjoy learning instead of being paralyzed by external pressures?

In my case, I had to let go of a life’s work and start over. It wasn’t until I left chess behind and became a beginner again, meditating, studying philosophy and psychology, and ultimately taking on my second discipline, Tai Chi Chuan, that I began to regain a feel for the art within the learning process. I had to release myself from the desperate need to live up to the expectations of others, and in its place grew presence to a natural creativity that had been smothered by baggage. I started discovering connections again, chess and the martial arts became one in my mind, and I could transfer my ideas, my feeling of Quality from one to the other. Learning became an expression of my being. After years of slogging, I was being true to myself once more. Hopefully, the lessons gleaned from the painful end of my chess career can help others avoid similar pitfalls—and perhaps my rediscovery of a passion for learning holds some solutions to the crisis we face in our schools.

A note for teachers and parents: I am researching the effect of video games on young minds. If you think it might be a healthy experience for your kids, please ask them to give up video games for two or three weeks, and write me about the experience at TheArtofLearning(at)gmail(dot)com.

Thank you!

-Josh Waitzkin

Technology Investing

In the last 7-8-years since we have been investing, we have invested in a very diverse range of companies, it has not just been limited to classifieds or one or two sectors alone.

We have got to a point where we are converging and focusing. So, for example, we are reluctant to do e-commerce although we have done ‘Happily Unmarried’ and that is tracking well and we continue to support that. But other than that we are most likely going to stay away from e-Commerce.

We have done 99labels earlier if you recall. We like the Information Arbitrage businesses, we like businesses that will have some technology build on IP we like Classified businesses, we like businesses where we enable handshakes we do not like businesses where we carry inventory and so on.

So there are patterns that we sort of follow, but having said that it is a good management team, good company scaling up well, good gross margins, high operating leverage, marketed on its space we would look at it, whether or not we have our internal competency in that area or not.

Source: Sanjeev Infoedge earnings call

Past Cycle - Kenneth Andrade

How is the current cycle placed compared to what happened in the last two decades?
India pulled through in the last cycle because of the global recovery. The capacities [in the 1990s] around textiles, metals and other commodities gave companies the ability to price products in the international market in dollar terms. I remember steel prices going all the way down to $160 per tonne between 1998 and 2000 and then rally to $1,000 per tonne midway through the last decade. This, plus the rupee depreciation, helped these companies/assets become financially solvent in 2008, a recovery exactly a decade from where these assets got laden with financial excesses (high debt and low equity). Large commodity companies, notably Tata Steel, had RoEs in excess of 40 percent for almost two years, something they had not seen for a very large part of the company’s history.

In short, India depreciated itself out of the problem in the last cycle.

However, power and fertiliser plants set up in that era did not see as much benefit compared to export-oriented companies or firms which manufactured commodities, which linked their prices to landed costs. Power and fertilisers were sold in the local market which was rupee-denominated and they clearly could not make supernormal profits to get through the excesses of the ’90s. 

We have a larger part of the latter problem this time around. Infrastructure assets have to earn revenues based on the earning capacity of the domestic economy. They are rupee-linked. So even if there is depreciation of the currency, a lot of these companies will not see a rise in turnover or asset prices connected to the fall.  

Another thing that does not help is that India again had a number of commodity companies that acquired assets at the peak of the cycle, and all through debt. This plays out very negatively at a time when commodity prices have virtually halved in value.

Read more: http://forbesindia.com/article/investment-guide-2016/choose-the-volatility-you-are-happy-to-live-with-kenneth-andrade/42027/2#ixzz3yi03xxOy

bear mkt durations

source: https://t.co/Y3SFAqDUSl