Image: ShutterstockAt 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: Stock Market (ASK Group’s Bharat Shah on why the market is guidepost), Social Media (Boomers are getting sucked into misinformation rabbit hole), Technology (Is crypto making a comeback?), Business (New push for diversity in funding tech start-ups), and Space (Who owns our orbit?). Here are the ten most interesting pieces that we read this week, ended October 06, 2020: 1. ASK Group’s Bharat Shah on why the market is his guidepost when it comes to deciphering tangible price and intangible value [Source: Outlook Business] With three decades in the Indian stock market, Bharat Shah of ASK Group, has lived through enough market cycles to figure out what will strike gold and what will turn to dust. With assets under management (AUM) of Rs250bn as of 31 August 2020, under ASK Investment Managers, his Indian Entrepreneur Portfolio has delivered 16.6% returns over 10 years and 7 months against BSE500’s 7.9%. He emphasizes on reading a lot. “I read every day, like I brush everyday…you just can’t procrastinate,” Shah had mentioned in an earlier interview. Talking about the sharp recovery since March, he says that the world has seen such challenges in the past. He feels that technology-wise we have come a long way and we will able to tackle the problem at hand soon. Talking about businesses and markets, he says that there was a lot of value in March from investing perspective. But that has reduced now. The segments that he finds attractive are pharma, healthcare, diagnostic chains, chemicals, and specialty chemicals. Mr. Shah is optimistic about the overall macroeconomic environment today. But why? 1) Cost of capital has declined materially. 2) Reforms related to agriculture. 3) Fertiliser subsidy being given directly to farmers will mean better choices. Lastly, he gives out names of the books that he is reading currently: The Behavioral Investor by Daniel Crosby, A Psychological Analysis of Adolf Hitler: His Life and Legend by Walter Langer and The Secret Teachings of all Ages by Manly Hall. 2. What is the internet doing to Boomers’ brains? [Source: Huffington Post] Misinformation is a common thing this world of social media. And it’s the older generation that is impacted the most. So far, research indicates that older Americans are a major vector of misinformation. “Older adults consume more misinformation and are more likely to share misinformation,” said Briony Swire-Thompson, a senior research scientist at Northeastern University who specializes in social media networks. During the 2016 election, users over 65 shared more fake news than any other age group and seven times more than users between 18 and 29. Where older adults do struggle, however, is with memory and digital literacy. If younger Americans are digital natives, older Americans are digital refugees, drifting onto social media platforms slowly and haphazardly. Older Americans are worse at distinguishing news from sponsored content, spotting manipulated images and separating factual information from opinion. They also lack basic information about the structures and incentives of social media — in a 2019 survey, just 18% of Facebook users over 65 knew that the site used an algorithm to organize their feeds and deliver recommendations. Around one-third thought Facebook staffers were hand-picking stories according to their relevance and credibility. The internet is not just awash in fake news, it is also drenched in what researchers call “hyperpartisan” information. As opposed to straightforward fiction (Bigfoot is real, hydroxychloroquine cures COVID-19), hyperpartisan websites take grains of truth and exaggerate them into their most sensationalized version. America’s misinformation problem is only going to get worse. In a 2015 study, researchers found that anger made participants more likely to believe misinformation that reinforced their political views. Anxiety, on the other hand, made them more open to misinformation that went against their existing beliefs. Living through times of societal upheaval — like, say, a pandemic — could be making Americans more vulnerable to false beliefs and making our political system more fragile. 3. ‘Now when it is India’s time under the sun, I do hope that globalisation does not retreat’: HUL CMD Sanjiv Mehta[Source: Indian Express] In this interview, Sanjiv Mehta, chairman and managing director of Hindustan Unilever Ltd, India’s largest FMCG (fast-moving consumer goods) company, talks about how demand is recovering and the future holds. On the seven months gone by, Mr. Mehta says, “As the Covid-related restrictions reduced, people started becoming more mobile, and the economy began to open up. In the March quarter, we had a minus 9% growth. Now, that was because in the last week of March, there was a sudden disruption and we could not supply our distributors. So the -9% was not all driven by offtake reduction, but more by way of supply chain constraints that happened as a result of the lockdown.“ Mr. Mehta says that there were no pay cuts in the company. Talking about how they navigated through the crisis, he says that they focused of a few aspects. “The first was, of course, our people – how do we keep them safe, and having a clear protocol to keep our factories and the distribution running with minimal risk to our people. We created a tiered protocol for our factories depending on the infection rates in the vicinity. We also trained the retail trade on how they should be operating in contactless fashion, or how they reduce physical contact with their customers as much as possible. For our own people, we focused on how to nurture them, look after their physical and mental well-being.” Talking about growth across categories, “We are now growing at 3% on the total company’s basis. But if you look at our ten-year historical growth, we grew at 9%. The 3% comes from 80% of our portfolio (food, hygiene, nutrition) growing at 10% and the balance 20% of our portfolio with a negative growth of 25%. So, when you put this together, it becomes 3% on the total portfolio. This 20% of my portfolio that is growing at -25%, is predominantly an urban portfolio and linked to a great extent to people not stepping out of their homes.” He also believes that India is a country where general trade, modern trade and e-commerce will co-exist. 4. How crypto is making a comeback [Source: Livemint] Investing in cryptocurrencies was a rage a few years ago. But, the steep crash in early 2018 mellowed down everything. Also, a Reserve Bank of India (RBI) ban followed in April 2018. The industry promptly went into a deep freeze. Crypto exchanges either shut shop or started looking outside India for opportunities. But things are changing now. Last week, PayPal announced that it would allow cryptocurrency in its wallets. The announcement followed a decision by several companies to hold crypto in their treasuries. A global thaw is likely to provide important directions for India too. In India, not only has RBI’s 2018 ban been reversed by the Supreme Court through a ruling in March 2020, but also the country’s famously conservative banking system is making nascent forays into the crypto space. On Monday, a London-based cryptocurrency platform, Cashaa, said that it had tied up with a multi-state cooperative credit society in India and would pursue more such tie-ups as part of its Indian operations. “Around 15% of today’s investors, I would say, would be those who joined before the Supreme Court ruling (in March)… who have seen the rally of 2017," said Gaurav Dahake, CEO, Bitbns, a cryptocurrency exchange. “For the large segment of new investors, it is low fixed deposit rates, a depreciating currency, and lacklustre stock markets that are bringing them in." Signs of yet another boom in the space have already resulted in adventurous capital pouring into India, in the form of global exchanges buying Indian ones and via private equity (PE) investments. India’s largest crypto exchange, Wazir X, was purchased by a global player, Binance, in late-2019. “We are seeing daily volumes of ₹10-11 crore. The average user invests around ₹11,000 into cryptos on our exchange and around 75-80% of them are below the age of 45," said Ashish Singhal, co-founder, Coinswitch. “In a short span of time, India has become as much as 15% of our global volume. However, industry-wide, India does not play a significant role in the global crypto market yet," he said. So, will this trend continue? Will the investors go long on crypto? There are many ifs and buts, as of now. 5. Data disappeared – An accounting of the damage [Source: Huffpost Highline] Whenever President Donald Trump is questioned about why the United States has nearly three times more coronavirus cases than the entire European Union, or why hundreds of Americans are still dying every day, he whips out one standard comment. We find so many cases, he contends, because we test so many people. The remark typifies Trump’s deep distrust of data: his wariness of what it will reveal, and his eagerness to distort it. Good data about where the coronavirus is spreading, whom it’s affecting, and the capacity of health systems is essential for government officials to make better decisions on, for example, lockdown orders and where to send supplies. Epidemiologists and infectious disease experts can use the information to understand COVID-19 better and, more importantly, to contain it. For over 40 years, the White House has published economic forecasts, including on growth and unemployment, as part of its midyear budget update to Congress. But this year, the White House decided to omit such projections. Officials told The Washington Post that the volatility caused by the pandemic made it difficult to model economic trends and that “there is no statutory requirement to release this information, just precedent.” The same been for pollution, climate change, science, food, etc. Every 10 years, the Census Bureau fans out across the country to count the people who inhabit it. And yet the 2020 census has become the target of a relentless sabotage campaign. First, congressional Republicans limited the agency to the $12.3 billion it spent in 2010, even though a growing population means each census is more complicated than the last. This forced the bureau to scale back its ambitions and roll out new counting methods without adequate testing. Then, in March, the bureau had to suspend field operations due to the coronavirus pandemic. The following month, the Trump administration asked Congress to extend the deadlines for data collection and processing, but ended up reversing its decision in July, sending agency staff scrambling. 6. Climate-conscious venture capitalists are back [Source: The Economist] In 2019 investors poured a record $36bn into climate-related technology, up from $17bn in 2015, according to Cleantech Group, a research firm. Half the money flowed into North American start-ups. China accounted for between 15% and 30%, depending on how the sector is defined, and Europe for another 15%. Green VC has a chequered past. In the late-2000s it experienced a boom and bust cycle in America and, to a lesser extent, Europe. VC funds took a financing model designed for software firms and applied it to companies producing physical products, mostly solar panels and biofuels, that take plenty of time and money to generate revenues. Many companies went bust. Their VC backers lost more than half of the $25bn they had bet. Capital dried up. Now it is flowing again. This time investors are looking at a broader range of clean tech. VC firms are increasingly rubbing shoulders with governments, corporations, climate-conscious billionaires and private-equity (PE) firms. Governments are trying to fill funding gaps at a later stage, too, when deep-pocketed banks are reluctant to hand out $50m for a factory-scale project and less risk-averse VC firms cannot afford to do so, observes Emily Reichert of Greentown Labs, an incubator. Corporations, for their part, are on the lookout for new technologies to help them decarbonise or cut energy costs. Liqian Ma, of Cambridge Associates, a consultancy, notes that between 2014 and 2018 green VC investments around the world generated annual returns of 20%. That is double what typical VC firms manage, and a vast improvement over the mid-2000s, when the average green VC lost money. Part of the problem is that, as Mr. Bill Gates explains, “the demand side for innovation is missing.” That is particularly the case for high-emitting products bought by businesses, such as cement (which accounts for around 8% of global greenhouse-gas emissions) and steel (7-9%). Unlike software, which is easy to differentiate from rivals, “green steel is not going to be any better than steel,” notes Mr. Gates. “So there is no market for early innovation.” 7. Good Eats [Source: inference-review] Agriculture is now a marginal sector that contributes little to gross domestic product in modern societies. In 2016, farm production accounted for 0.7% of the United States’ GDP. Vaclav Smil, Distinguished Professor Emeritus at the University of Manitoba, and author of this article suggests: just let them live off the output of the most important sector, which now accounts for more than 20% of GDP, the category labeled by the Bureau of Economic Analysis as “finance, insurance, real estate, rental, and leasing.” All affluent countries have been producing substantially more food than could be possibly eaten, even by gluttonous populations. With the sole exception of Japan, average daily supply is now in excess of 3,000 kcal per capita. More than 30%, and sometimes even more than 40%, of all food energy originates from lipids. Food production is the single largest activity putting humans into competition with other species inhabiting the biosphere. For that reason, it is particularly destructive to produce food that will be wasted. A study by the Food and Agriculture Organization of the United Nations concluded that annual losses in Europe and North America prorate to about 100 kg per capita. The most obvious concern should not be what specific foods to avoid and what diets to follow. Our evolutionary heritage is indisputable: we are an omnivorous species. The advice to consume a wide variety of plant and animal foodstuffs has been always sound. In recent years, this course has been reaffirmed in new findings that overturn, or greatly weaken, former restrictive and prescriptive recommendations, some of which had gone as far as demonizing almost any intake of bread or red meat. This omnivory should remain within the confines of actual energy and nutrient needs, particularly because in modern societies dominated by sedentary employment, excessive food consumption tends to be combined with reduced physical activity. But if the grossly excessive food supply is not reduced, remaining within the confines of healthy omnivory would further increase today’s unacceptably high level of food waste. Omnivorous moderation should be then accompanied by significant curtailment of the oversupply of food. Such a change would bring many environmental benefits, but it would require a fundamental shift of priorities, from growth to deliberately managed retreat, an antithetical move for modern economies. 8. A new push for diversity in funding tech start-ups [Source: The Wall Street Journal] Tech entrepreneurs of color often struggle to attract early-stage funding for their startups. But that may be starting to change—thanks in part to investors of color. Professional networks have formed in cities such as Chicago, Detroit and Miami in recent months to identify and recruit Black, Latino and other angel investors of color to fund tech entrepreneurs. At the same time, venture firms founded by women as well as racial and ethnic minorities are growing their profiles in raising funds to inject capital into start-ups. “The population of us [Latino] professionals has reached that critical mass where we can do some of that investing ourselves” instead of investing through venture-capital funds, says Adela Cepeda, chairwoman of Angeles Investors, a nationwide group of Latino business executives who make angel investments in Latino-owned tech start-ups. Isabel Rafferty Zavala, chief executive of Canela Media, which operates an internet television service aimed at Spanish-speaking audiences in the U.S. and Latin America, raised money in a funding round led by BBG Ventures and Reinventure Capital and including Angeles Investors members. BBG Ventures focuses on consumer-tech start-ups with female founders. Reinventure funds companies led by women or people of color. “If someone is going to understand the value of the Latino audience, this is it,” says Ms. Rafferty Zavala. “I need people to understand what I’m doing and see the value.” Tech startup entrepreneur Rodney Sampson has been working to increase the ranks of Black angel investors for nearly a decade, seeing it as a pathway to create generational wealth. Mr. Sampson, who is also courting investors for his 100 Black Angels & Allies Fund, says that making Black people aware of the risks and opportunities of angel investing is critical in bringing more investors into the ecosystem. “If people don’t see [angel investing] as an asset class and they don’t know how to access the asset class, it’s not going to advance investments in funds, founders and families,” says Mr. Sampson, who is working with the University of North Carolina at Chapel Hill to develop an angel-investing certificate program to prepare prospective investors. 9. A Math whiz on how to stop stressing about election forecasts [Source: The Atlantic] If you had to choose the winning candidate for the US presidential election, who would you choose, and what would be his chances of winning? Obsessing over the probabilities of unique one-off events that we have an infinitesimally small amount of individual control over—like a presidential election—is a metaphysically strange thing to do. Still, everybody that the author knows, including himself, has been doing so, obsessively, for weeks. The author wanted to know if America’s forecast addiction was understandable, paradoxical, or pathological. So he called Jordan Ellenberg, a mathematician and University of Wisconsin professor, who wrote a best-selling book about thinking mathematically. Mr. Ellenberg says, “Probability is a measure of your feelings. It’s a measure of your degree of belief in some proposition. That’s all it is. As a teacher of math, you’re always trying to emphasize that every single mathematical formalism in the world was developed from a real problem.” So probabilities are almost like guides for our feelings about the future? Mr. Ellenberg puts it even more strongly: Feelings are for the same thing that math is for. They’re both for guiding your decisions and helping you select actions and helping you understand things. Relevant to your decision making is how strongly you feel about the outcome. So, yes, probabilities are about feelings. He shares his advice for things that one can’t control. “A good mental-health question to ask yourself is: What am I actually gaining from trying to figure this out now? None of us sitting at home is going to decide the election. The meaningful actions we’re going to take in support of our preferred candidate at every level have mostly been taken, or decided. So what are we gaining? We’re all about to find out the answer. Our epistemic situation when we know the outcome of the election will be the exact same no matter how hard we think about it right now. Our stress affects nothing.” 10. Who owns our orbit: Just how many satellites are there in space? [Source: World Economic Forum] All countries want to explore space. Spending for space tech has increased over the years. Today, there are seemingly countless benefits and applications of space technology. Satellites, for instance, are becoming critical for everything from internet connectivity and precision agriculture, to border security and archaeological study. Right now, there are nearly 6,000 satellites circling our tiny planet. About 60% of those are defunct satellites—space junk—and roughly 40% are operational. Talking about the space, one name that comes to everyone’s mind is SpaceX. Founded by Elon Musk, SpaceX is not only a disruptive launch provider for missions to the International Space Station (saving NASA millions). It’s also the largest commercial operator of satellites on the planet. With 358 satellites launched as of April, part of SpaceX’s mission is to boost navigation capabilities and supply the world with space-based internet. While the company operated 22% of the world’s operational satellites as of April, it went on to launch an additional 175 satellites in the span of one month, from August to September 2020. Where the original space race was a nationalistic competition between Cold War rivals, the new space race is collaborative and commercialised. Today, international cooperation allows for the deployment of satellites, as well as space-based science. Before SpaceX, NASA and the other space agencies that operate the International Space Station had been reliant on Russian Soyuz rockets for hundreds of missions.
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