Some of the most fascinating topics covered this week are: Leadership (Profiles of the new strongmen), Management (Structured management practices lead to better HR outcomes), Scientific Breakthrough (Promise and price of cellular therapies), Technology (The A.I. diet), Lifestyle (Spot the psychopath), Markets (Winner takes it all applies to stock market as well) and Science (Mosquito Menace)
At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are: Leadership (Profiles of the new strongmen), Management (Structured management practices lead to better HR outcomes), Scientific Breakthrough (Promise and price of cellular therapies), Technology (The A.I. diet), Lifestyle (Spot the psychopath), Markets (Winner takes it all applies to stock market as well) and Science (Mosquito Menace).
Here are the ten most interesting pieces that we read this week, ended August 16, 2019.1) Profiles of the new strongmen [Source: Foreign Affairs] The leading figures on the world stage today practice a brutal, smashmouth politics, a personalized authoritarianism. Old-school strongmen, they do whatever is needed to grasp and hold on to power. Here are five such profiles. All fought their way from obscurity to the throne and then took a hard authoritarian turn. But how, and why? 1) Russia’s Vladimir Putin sees himself as a latter-day Peter the Great. He fetishizes strength, dreams of restoring imperial grandeur, and rules by the old tsarist doctrine of “Orthodoxy, Autocracy, Nationality.” 2) China’s Xi Jinping is driven by paternal hero worship and devotion to the Chinese Communist Party. Having concluded that the party’s rule was under growing threat, he has devoted his time in office to restoring its dominance. 3) Turkey’s Recep Tayyip Erdogan is harder to pin down. A fiery Islamist turned reformer turned populist authoritarian, he has become the country’s longest-serving and most significant leader since Ataturk.
4) Rodrigo Duterte of the Philippines is comfortable shooting people and wants you to know it. He made his name as a tough mayor bringing order to a crime-ridden city, and as president, he offers that experience as a national model—“Singapore with thugs instead of technocrats.” 5) And Hungary’s Viktor Orban, started off as a liberal activist before cynically switching to populist nationalism when the political winds shifted—and as prime minister, he has proceeded to dismantle democratic institutions and undermine the rule of law. There is no scholarly consensus on what role individuals play in history, relative to broader structural forces in their environment. You can tell any political story you want through the lens of the people involved, making it appear that their choices mattered greatly.
2) Structured management practices lead to better HR outcomes [Source: MIT Management Sloan School] Management is an important factor for any company. A new research from MIT’s Initiative on the Digital Economy shows that firms with structured management practices are better at hiring, firing, and retaining workers. The paper, “Building a Productive Workforce: The Role of Structured Management,” examines with new depth how personnel management practices relate to human resources outcomes and workforce productivity. The research, led by former MIT Sloan postdoctoral research fellow Daniela Scur, used data from Brazil that offered an unusually nuanced picture of worker movement: an employer-employee matched dataset covering full-time workers for ten years (RAIS), the annual industrial survey (PIA) for productivity data, and the World Management Survey (WMS) for management practices data.
The research outlined a few key points: 1) Firms with structured management practices do a better job at hiring the “best” people. These are employees with the most valuable portable skills. 2) Firms with structured management practices do better at keeping those workers over time, retaining a much larger share of workers in the top quantile of worker quality distribution. 3) Structured management firms also maintain lower levels of firing. Scur and colleagues posit that structured firms are better at job matching to begin with, so they need to fire less often.
Scur and her colleagues consider these facts to be “the first step in an exciting research agenda exploring the labor aspect of this relationship. A whole new set of questions arises based on these patterns, such as whether structured management helps firms mitigate unhelpful managerial biases, whether they’re more able to optimize their internal labor markets, or whether these firms can improve the human capital of their workers”.
3) How mosquitoes changed everything [Source: New Yorker] This review of the book “The Mosquito: A Human History of Our Deadliest Predator” by historian Timothy C. Winegard throws light on how mosquitoes have killed nearly 52 billion people till now. The book offers a catalogue of stories of how mosquitoes have endangered human lives. Malaria laid waste to prehistoric Africa to such a degree that people evolved sickle-shaped red blood cells to survive it. The disease killed the ancient Greeks and Romans—as well as the peoples who tried to conquer them—by the hundreds of thousands, playing a major role in the outcomes of their wars.
Winegard is particularly interested in wars and conquests, and argues that, for much of military history, deaths caused by mosquitoes far outnumbered, and were more decisive than, deaths in battle. Malaria has many strains, of varying deadliness, but survival rates are lowest for people encountering new varieties to which they have not been “seasoned”—to which they have gained no immunity. Military strategists, from Saladin to the Nazis, used mosquitoes as direct weapons of war. At Walcheren, Napoleon breached dikes to create a brackish flood—the ensuing malaria epidemic killed four thousand English soldiers—and declared, “We must oppose the English with nothing but fever, which will soon devour them all.”
Globalization is helping to spread a new generation of mosquito-borne illnesses once confined to the tropics, such as dengue, perhaps a thousand years old, and chikungunya and Zika, both of which were first identified in humans only in 1952. Meanwhile, climate change is dramatically expanding the ranges in which mosquitoes and the diseases they carry can thrive. One recent study estimated that, within the next fifty years, a billion more people could be exposed to mosquito-borne infections than are today.
4) The promise and price of cellular therapies [Source: New Yorker] In this longish article, Siddhartha Mukherjee, physician and author of “The Emperor of All Maladies,” for which he won a Pulitzer Prize, throws light on “living drugs” that is made from patient’s own cells. This can cure cancers. He starts with the story of twins, out which one fell ill and was diagnosed with a condition called aplastic anemia, a form of bone-marrow failure. A physician-scientist named E. Donnall Thomas was called in to treat her. Mr. Thomas saw a way around this. First, he would try to eradicate the malignant blood cells with doses of chemotherapy and radiation so high that the functioning marrow would be destroyed, purged of both cancerous and normal cells. That would usually be fatal, but the donor marrow would then replace it, generating healthy new cells.
Mr. Thomas, who won a Nobel Prize for these studies, later described them as “early clinical successes.” Human immune system—in particular, the T cell, a type of white blood cell that is central to what is known as “adaptive immunity”—could recognize and attack cancer. Which led to a question: Could T cells be trained to reject cancerous cells but not turn against the host? Could they be the basis of a new class of drug? It’s true that donor T cells, in marrow-graft patients, could hunt down the host’s cancer cells, but they were indiscriminate in their hostilities, in ways that could be lethal. The trick was to get T cells to recognize and respond to cancers both more selectively and more effectually. Genetically modified T cells equipped with “chimeric antigen receptors” that were fully integrated into their immune functions—would be termed CAR-T cells, or CAR-Ts.
Dozens of labs around the world are now developing CAR-T therapies that work on different targets and different cancers. The estimated cost to manufacture a typical CAR-T infusion is close to six figures. In short, even if CAR-T therapy were offered with no margin of profit, it would still rank with some of the most expensive procedures in medicine. But, is it fully safe? For a certain class of drug-resistant patients with another form of leukemia, called CLL, the response rate with CAR-T therapy is around 75%. 85% of drug-resistant patients with multiple myeloma—a malignancy of the blood’s plasma cells—have either a complete or a partial response to the therapy, but more than a third of complete responders relapse within a year.
5) Doctors altered a person's genes with CRISPR for the first time in the U.S. Here's what could be next [Source: popsci.com] For the first time, doctors in the United States used the gene editing tool CRISPR to attempt to remedy a genetic disease in a living person. Victoria Gray, a 41-year-old woman from Mississippi was born with sickle cell disease, an often painful and debilitating condition caused by a genetic mutation that alters the shape of red blood cells. Only one treatment for the condition exists—a donor transplant that works for just 10% of patients—but doctors think editing cells extracted from Gray’s own bone marrow could restore proper red blood cell formation. If successful, it could prove to be the treatment 90% of sickle cell patients have been waiting for. Gray is the first person in the U.S. to have her cells altered with CRISPR and the second globally.
CRISPR stands for clustered, regularly interspaced short palindromic repeats. They are repeating sequences of DNA that when matched with an enzyme—in this case Cas9—act like DNA-cutting scissors and can chop, remove, and replace various segments of DNA. For the treatment, doctors removed stems cells from Gray’s bone marrow. Then, they used CRISPR-Cas9 to cut and disable the BCL11A gene so that the cell no longer produces the repressor. Once the edited cells are injected back into the patient’s bone marrow, they should begin to produce fetal hemoglobin.
Can gene editing cure all diseases? Gene editing has the potential to treat a number of genetic and other currently incurable diseases, including some cancers. But because it can cut essentially any DNA segment at will it must be used with extreme caution. It’s too early to draw conclusions but researchers are still eager, because for the vast majority of people with sickle cell disease, Vivien Sheehan, a hematologist at Baylor University, says “this is the only potential cure.”
6) The A.I. diet [Source: New York Times] Artificial intelligence and deep learning have made anything and everything possible. Algorithms are today used not only for trading in stock market, but also to plan a perfect diet. Dr. Eric Topol, a cardiologist, participated in a two-week experiment that involved using a smartphone app to track every morsel of food he ate, every beverage he drank and every medication he took, as well as how much he slept and exercised. He wore a sensor that monitored his blood-glucose levels. All of his data, amassed with similar input from more than a thousand other people, was analyzed by artificial intelligence to create a personalized diet algorithm. The point was to find out what kind of food he should be eating to live a longer and healthier life.
The results were astonishing as per Dr. Topol. Coming up with a truly personalized diet would require crunching billions of pieces of data about each person. This would require developing an artificial intelligence more sophisticated than anything yet on the market. The first major development in this field occurred a few years ago when Eran Segal, Eran Elinav and their colleagues at the Weizmann Institute of Science in Israel published in the journal Cell a landmark paper titled “Personalized Nutrition by Prediction of Glycemic Responses.” Spikes in blood-glucose levels in response to eating are thought to be an indicator of diabetes risk, although we don’t know yet if avoiding them changes that risk. These spikes are only one signature for our individualized response to food. But they represent the first objective proof that we do indeed respond quite differently to eating the same foods in the same amounts.
The study included 800 people without diabetes. The data for each person included the time of each meal, food and beverage amount and content, physical activity, height, weight and sleep. In the study, more than a hundred factors were found to be involved in glycemic response, but notably food wasn’t the key determinant. Instead it was the gut bacteria. Here were two simultaneous firsts in nutritional science: one, the discovery that our gut microbiome plays such a big role in our unique response to food intake; and second, this discovery was made possible by A.I. We don’t often think of a diet as being unsafe, but the wrong foods can be dangerous for people with certain risks or conditions. For now, it’s striking that it took big data and A.I. to reboot our perceptions about something as fundamental as what we eat. While we are still far away from a universal diet, but at least we are making some progress.
7) Netflix is not a tech company [Source: Benedict Evans] The author of this piece talks how Netflix is a television company using tech as a crowbar for market entry. He compares it to Rupert Murdoch’s Sky. Sky used technology as a crowbar to build a new TV business. Everything about how it executed that technology had to be good, and by and large it was. The box was good, the UI was good, the truck-rolls were good, and the customer service and experience were good. Unlike American cable subscribers, Sky subscribers in the UK are generally pretty happy with the tech. The tech has to be good - but, it’s still all about the TV. If Sky had been showing reruns of MASH and I Love Lucy no-one would have signed up. Sky used tech as a crowbar, and the crowbar had to be good, but it’s actually a TV company.
He says Netflix went the same way. Netflix realised that you could spend far more money on far more hours of scripted drama than anyone had ever spent before, and you could (hopefully) make your money back by selling it on subscription directly to consumers instead of going through aggregators, using a new technology, broadband internet, that both gave you that access and made it possible for people to browse that vast selection of shows. Like Sky, Netflix has used technology as a crowbar to build a new TV business. There’s an irony here in the fact that the tech industry has spent decades wanting to get into the living room, get into TV, break up the cable bundle and move TV from scheduled linear to on-demand, and yet now that it’s happening, it’s happening in the TV industry, not the tech industry.
Netflix isn’t using TV to leverage some other business - TV is the business. It’s a TV company. Amazon is using content as a way to leverage its subscription service, Prime, in much the same way to telcos buying cable companies or doing IPTV - it’s a way to stop churn. Amazon is using Lord of the Rings as leverage to get you to buy toilet paper through Prime. Apple’s position in TV today is ambivalent. Will Apple spend $1bn a year buying content from people in LA, and produce another nice incremental service with some marketing and retention value, or spend $15bn buying content from people in LA, to take on Netflix? Well, who knows, but that’s a TV question, not a tech question.
8) The dawn of the age of plastics [Source: undark.org] In 1939, the future arrived at the World’s Fair in New York with the slogan, “The World of Tomorrow.” The fairground in Queens attracted 44 million people over two seasons, and two contenders laid claim to being the most modern industrial material: cork and plastic. For decades, cork had been rising as the most flexible of materials; plastic was just an intriguing possibility. In the months after the fair, as U.S. entry into the war became inevitable, the government grew concerned by American dependence on cork, which was obtained entirely from forests in Europe. The United States imported nearly half of the world’s production.
Cork in the 50s was the go-to industrial sealant used in car windshield glazing, insulation, refrigerated containers, engine gaskets, and airplanes. In defense, cork was crucial to tanks, trucks, bomber planes, and weapon systems. As the vulnerability for the supply of this all-purpose item became clear with the Nazi blockade of the Atlantic, the government put cork under “allotment,” or restricted use prioritized for defense. Information about cork supplies became subject to censorship. In 1944, a book titled “Plastic Horizons,” by B.H. Weil and Victor Anhorn, documented the promise of plastic. Early plastics, as the book explained, covered a wide range of natural or semi-synthetics like celluloid and synthetic resins that could be molded with heat and pressure.
“There may be no Plastics Age, but that should discourage no one; applications will multiply with the years,” they continued. “Plastics are indeed versatile materials, and industry, with the help of science, will continue to add to their number and to improve their properties. Justifiable optimism is the order of the day, and the return of peace will enable the plastics industry to fulfill its promise of things to come.” By 1946, the transition to plastics had reached a new threshold. That year, New York hosted a National Plastics Exposition, where for the first time, a range of strong, new materials and consumer products headed for American homes were on display. One observer noted, “the public are certainly steamed up on plastics.”
9) Spot the psychopath [Source: aeon.com] We have all read about psychopaths or seen one on television. We all believe that psychopaths are the incarnation of evil. However, for an increasing number of researchers, such people are ill, not evil – victims of their own deranged minds. So, just what are psychopaths, and what is wrong with them? According to the Hare Psychopathy Checklist, psychopaths are selfish, glib and irresponsible. They have poor impulse control, are antisocial from a young age, and lack the ability to feel empathy, guilt and remorse. According to some recent calculations, more than 90% of male psychopaths in the United States are in prison, on parole or otherwise involved with the criminal justice system.
So while psychopaths aren’t irrational in the sense of being unable to think clearly, they seem to act irrationally. They struggle with what philosophers call ‘reasons for actions’: considerations that underlie our decisions to act, such as the likelihood that what we’ll do will satisfy our goals and won’t come into conflict with other projects or aims. The psychological evidence confirms that psychopaths have deficits in reasoning that affect how they make decisions. They usually attend almost exclusively to the task at hand (whatever that might be), and ignore relevant contextual information – although when context doesn’t play a role, they do very well.
Rationalist thinkers who believe that psychopaths reason poorly have zoomed in on how they don’t fear punishment as we do. That has consequences down the line in their decision making since, without appropriate fear, one can’t learn to act appropriately. But on the side of the sentimentalists, fear and anxiety are emotional responses. Their absence impairs our ability to make good decisions, and facilitates psychopathic violence. Fear, then, straddles the divide between emotion and reason. It plays the dual role of constraining our decisions via our understanding the significance of suffering for others, and through our being motivated to avoid certain actions and situations. But it’s not clear whether the significance of fear will be palatable to moral philosophers.
10) Winner-take-all phenomenon rules the stock market, too [Source: Bloomberg] A new study on equities found that just 1.3% of the world’s public companies account for all the market gains during the past three decades. Outside the U.S., the gains are even more concentrated, with less than 1% of all equities driving all of the net appreciation in share prices. The lead author of the paper, Hendrik Bessembinder of the Carey School of Business at Arizona State University, and the rest of his researchers looked at 62,000 global common stocks from 1990 to 2018, and ranked them on a compounded, total-return basis. That period includes two decade-long market expansions, from 1990 to 2000 and 2009 through 2018, as well as two major market crashes in 2000 and 2008. These periods, encompassing bear and bull cycles, make it less likely that the findings are due to anomalies or one-off events.
Just five companies, Apple Inc., Microsoft Corp., Amazon.Com Inc., Alphabet Inc. (Google) and Exxon Mobil Corp., accounted for 8.3% of global net wealth creation. Less than half of the stocks in the study, 23,905, had cumulative positive returns. When added to the top gainers, these stocks generated $66.6 trillion of wealth. However, a majority of stocks, 37,195, or 60.9%, were net money losers, subtracting a $21.83 trillion from the total. The total gains of winners minus losers netted out to that $44.7 trillion figure.
The study also pointed that the longer buy-and-hold investors retained their equities, the greater the outperformance relative to Treasury bills. It is about 1% for any one month on average, about 14% for a year, 95% for a decade and a giant 260% for the 29-year sample period. The research suggests that investors who index broadly may be more likely to hold the rare and outsized winners that drive much of the market gains over time. So, if you’ve got the winners, hold on for a long time.