The Weekend Bulletin (Vol. 1 | Iss. 9)

Jan 18, 2020

Volume 1 | Issue 9 | January 18, 2020

A detailed discussion around evolving technologies in the automobile sector with some interesting perspectives on the death of the internal combustion engine and the rise of the autonomous/electric vehicle. Whether you are an auto-enthusiast of not, this article is makes for a very informative read.
- For instance, this schematic comparing the individual components of a vehicle powered by an internal combustion engine with one powered by an electric battery:

This is a note-worthy write-up that looks at the demand and supply of investments across the globe. It argues that asset performances remain supported by demand-supply mismatches rather than valuations alone.
As much as we love to quantify risk, in reality, risk is uncertainty. It is a variable that is unknown and unknowable in advance. Since you can’t prepare for what you don’t know, that is where the real risk emanates from. This article narrates a very interesting true story to make this point.
The world of corporate finance is darkened by ‘adjustments’ - accounting measures used by companies to generally boost near term earnings. And if you thought that Wework got creative in the way they re-defined EBITDA, then this article has some surprises for you. For example: It took Del Frisco 2,723 words to explain what Ebitda means, the most of any borrower included in the study. Its definition included 22 types of adjustments it could use to boost its reported earnings.

Unintended consequences (actions have consequences, which have further consequences, creating a chain of cause and effects which we may not be able to anticipate when taking the action) is one of my two favorite mental models, not just for its vast applicability in everyday life, but also for the fact that it is very entertaining. Below are two such entertaining reads:
- A comic and sarcastic take on technology and artificial intelligence and their unintended consequences. While funny all through, it ends with a hard hitting question.
- This article discusses a problem posed by the proliferation of internet and e-commerce that the world is facing today - “The Amazon Effect”

There is a famous Warren Buffett incident that he passed the opportunity to buy more productive machines for his textile business. He thought that over time, the improvement in technology would not benefit those buying it, as productivity improvements would be passed on to the customers. Something similar has happened to the human civilization as a whole - we cant find enough free time.