Ten interesting things we read this week

Here are the ten most interesting pieces that we read this week, ended January 15, 2021.
 
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this week are: Business (From the verge of bankruptcy to the most admired company), Investing (Is value investing outdated?), Women Empowerment (Enforcing a 50-50 gender policy), Gaming (Gaming made 2020 a tiny bit more tolerable).
 
1)    From one of America’s most disorganized firms on the verge of bankruptcy to the most admired [Source: The Investing Principles] 
From an airline’s cockpit avionics to the software for your smart buildings, Honeywell products indirectly touch most of the world’s population. And the person behind this success is David Cote, Honeywell’s erstwhile CEO. In this piece the author shares his notes from “Winning Now Winning Later” by Dave Cote. While the book’s central tenet is that a company can invest both for the short-term and long-term without impacting long-term competitive advantages, the author was amazed to find tons of treasure to make better life decisions. Whether you are a small business owner, an executive in a firm with a small team or a senior C suite employee – the book provides candid wisdom to recharge you into performance machines!

When Mr. Dave was handed the mantle to run Honeywell, no one supported him. The CNBC commentators were lambasting, opining that he wasn’t equipped to run Honeywell. Like many successful people around, Dave was no different in taking out a significant amount of time for him only to think. He called it Blue Book sessions. He also believed that you don’t have to be a genius or have some magic formula to achieve remarkable performance. You do have to believe you can achieve. Being an avid reader, he reads five newspapers a day and books and publications on diverse topics such as IoT, AI, law, and social media. It was not to become an expert but to ask intelligent questions to experts that made them think more creatively.

One of the aspects that differentiate Honeywell is a thriving business in China and India. Many leaders are afraid to do R&D in places like India, fearing that the engineering work quality will suffer. He’d challenges convincing business leaders to source their R&D needs out of India. He pushed his CTOs to travel to India and China to see R&D quality. Today there are 10,000 employees at Honeywell Technology Solutions (HTS) in emerging countries that have not only helped save costs but build a more in-depth knowledge of local markets. Along with the scorching returns for investors, the company made around 2,500 of its employees 401(k) millionaires, with 95% below the executive level and the lowest compensated, earning an annual salary of only $43,000. When it was difficult for the company to motivate employees in the turnaround phase, they used cash compensation.    

2)    Something on value: Howard Marks [Source: Oaktree Capital]
In his latest memo, Howard Marks of Oaktree Capital talks about how investing has changed over the years. With lot of time in hand due to the pandemic, Mr. Marks spent the time with family. Talking about value investing, “Growth” stocks have meaningfully outperformed “value” for the last 13 years – so long that people are asking him whether it’s going to be a permanent condition. He believes that focus on value versus growth doesn’t serve investors well in the fast-changing world in which we live.

Over the last 80-90 years, two important developments occurred with regard to investing style. The first was the establishment of value investing. Next came “growth investing”, targeting a new breed of companies that were expected to grow rapidly and were accorded high valuation metrics in recognition of their exceptional long-term potential. The two approaches have divided the investment world for the last fifty years. There are arguments for a resurgence in value investing and arguments for its permanent impairment. But, Mr. Marks feels that this debate gives rise to a false and unhelpful narrative. The value investor of today should dig in with an open mind and a desire to deeply understand things, knowing that in the world we live in, there’s likely more to the story than what appears on the Bloomberg screen.

Mr. Marks once asked a well-known value investor how he could hold the stocks of fast-growing companies like Amazon – not today, when they’re acknowledged winners, but rather two decades ago. His answer was simple: “They looked like value to me.” Mr. Marks feels the answer is “value is where you find it.” He also says how his conversations with his son-in-law over the ten months of the pandemic have represented a “voyage of discovery” and culminated in this memo.   

3)    The tech chief who put diversity at the heart of her group [Source: Financial Times] 
When Ashwini Asokan was on a flight from Silicon Valley to India in 2013, she had decided diversity was going to be the critical factor to the success of her artificial intelligence start-up Mad Street Den. Fed up with often being the only woman in the room, there was no question in her mind about enforcing a 50-50 gender policy, even though she knew that it was a radical path to take in the male-dominated tech sector. Ms. Asokan, 39, maintains diversity is necessary to break the stranglehold that tech groups such as Google and Facebook have on AI's development and application.

At first, it wasn’t easy. Ms. Asokan says, ““In the early stages it was difficult, we had to make sure we constantly had enough women and if we didn’t get enough applications, we would have to go and hunt people down.” The 50-50 policy has been in place ever since she started Mad Street Den, a start-up backed by US venture capital groups Sequoia and Falcon Edge Capital, that raised $17m in its series B funding round two years ago and has place to raise more. Mad Street Den has expanded during the coronavirus pandemic as companies turn to software to cut costs and embrace AI, machine learning systems that hold great promise — and risk. Elon Musk has described the spectre of digital superintelligence as “far more dangerous than nukes”.

Today women make up about half of Mad Street Den’s 300 employees, including at the management level where women are the team leaders of data analytics, product and engineering — positions that were traditionally held by men. Ms. Asokan credits diversity with coming up with inclusive products, such as software that allows companies to generate clothes on digital models of different shapes and body sizes. But, Ms Asokan fears that AI is not being developed responsibly because it is not inclusive and vows to continue her push for diversity. “People need to not just passively consume AI, they need to be actual active creators of AI,” she says. “Otherwise we’re never going to create a world where industries everywhere can benefit from AI. It’s always going to come down to Google, Facebook and Amazon.”

4)    Of percentiles, fat percentages and functional fitness [Source: Livemint] 
“It’s very hard to fail completely if you aim high enough”, that’s what Swanand Kelkar, managing director at Morgan Stanley, feels. He is currently on a sabbatical, hoping to explore 12 different pursuits. In September, he learnt how to cook and as a culmination of that effort, he hosted a dinner for a few friends in early October. He cooked a lot during that month and ended up consuming all of what he cooked. And this all started showing on the waistline and a jowl reappeared. One of the activities he intended to pursue during his sabbatical was “Getting fit—training yourself to peak condition”. And getting fit wasn’t only physically, but mentally also.

Talking about mental fitness, he says, “Many years ago, I had participated in a corporate challenge that combined the mind and body aspects of fitness. It entailed doing a hundred jumping jacks, solving a Sudoku puzzle, running a mile and so on; one after the other. Despite several “fit” contestants, a mother of two who got no time to work out, won handily. Yup! She kicked our gym-toned butts at Sudoku. My definition of “fit” started changing that day. It was more than just a physical attribute.”

That’s when he decided that he needs to be fit not only physically, but also mentally. For the mind part, he decided he would take the Common Admission Test (CAT) again. CAT is the most popular and extremely competitive MBA entrance exam. For the physical aspect, he thought of measuring changes in fat percentage and muscle mass as an indicator of fitness. An unsaid hope was to see some muscle definition on the abdomen; the pinnacle of male vanity. Recently, his friend asked him about the sustainability of all that he was doing. The overarching objective of this sabbatical has been to rekindle a few passions he can continue with for the rest of his life. One thing that the two months of fitness pursuit taught him is: “It’s very hard to fail completely if you aim high enough.”

5)    Absolute Success is Luck. Relative Success is Hard Work. [Source: jamesclear.com] 
In this blog, James Clear, author of Atomic Habits, talks about the importance of luck and hard work. He cites Warren Buffet, showing how luck plays a crucial role in our lives. And then he moves to the story of a Chinese scientist named Tu Youyou, and how she was able to find a cure for Malaria. Tu Youyou was not fabulously lucky. She has no postgraduate degree, no research experience abroad, and no membership in any of the Chinese national academies—a feat that has earned her the nickname “The Professor of the Three No's”. But she was a hard worker, persistent, diligent and driven. For decades she didn't give up and she helped save millions of lives as a result. Her story is a brilliant example of how important hard work can be in achieving success.

So, what determines success? Hard work or good fortune? One way to answer this question is to say: Luck matters more in an absolute sense and hard work matters more in a relative sense. Absolute success is luck. Relative success is choices and habits. In Atomic Habits, he wrote, “It doesn’t matter how successful or unsuccessful you are right now. What matters is whether your habits are putting you on the path toward success. You should be far more concerned with your current trajectory than with your current results.” With a positive slope and enough time and effort, you may even be able to regain the ground that was lost due to bad luck.

By definition, luck is out of your control. Even so, it is useful to understand the role it plays and how it works so you can prepare for when fortune (or misfortune) comes your way. In his fantastic talk, You and Your Research, the mathematician and computer engineer Richard Hamming summarized what it takes to do great work by saying, “There is indeed an element of luck, and no, there isn't. The prepared mind sooner or later finds something important and does it. So yes, it is luck. The particular thing you do is luck, but that you do something is not.” You can increase your surface area for good luck by taking action. In the end, we cannot control our luck—good or bad—but we can control our effort and preparation.

6)    How understanding light has led to a hundred years of bright ideas [Source: The Economist]    
Albert Einstein won the 1921 Nobel prize for physics in 1922. The temporal anomaly embodied in that sentence was not, alas, one of the counterintuitive consequences of his theories of relativity, which distorted accustomed views of time and space. It was down to a stubborn Swedish ophthalmologist—and the fact that Einstein’s genius remade physics in more ways than one. In November 1922 Einstein was awarded the 1921 prize “for his services to theoretical physics, and especially for his discovery of the law of the photoelectric effect”. Einstein’s first paper on the nature of light, published in 1905, contained the only aspect of his work that he himself ever referred to as “revolutionary”.

It did not explain a new experiment or discovery, nor fill a gap in established theory; physicists were quite happy treating light as waves in a “luminiferous aether”. It simply suggested that a new way of thinking about light might help science describe the world more consistently. That quest for consistency led Einstein to ask whether the energy in a ray of light might usefully be thought of as divided into discrete packets; the amount of energy in each packet depended on the colour, or wavelength, of the light involved. Over subsequent years he toughened his stance. His work on relativity showed that James Clerk Maxwell’s luminiferous aether was not required for the propagation of electromagnetic fields; they existed in their own right. His work on light showed that the energy in those fields could be concentrated into the point-like particles in empty space.

Einstein rejected the idea that a theory which provided only probabilities could be truly fundamental. He wanted a better way for a photon to be both wave and a particle. He never found it. “All these 50 years of conscious brooding”, he wrote to a friend in 1951, “have brought me no nearer to the answer to the question, ‘What are light quanta?’ Nowadays every Tom, Dick and Harry thinks he knows it, but he is mistaken.” Though Einstein was probably not thinking of him specifically, one of those Dicks was Richard Feynman, one of four physicists who, in the late 1940s, finished off the intellectual structure of which Einstein had laid the foundations: a complete theory of light and matter called quantum electrodynamics (QED). Feynman was happy to forgo Einstein’s brooding and straightforwardly assert that “light is made of particles”.

7)    How gaming made 2020 a tiny bit more tolerable [Source: Firstpost]
The spread of Covid has changed the gaming industry a lot. The author of this articled, and also a gaming addict, tells how Covid has given him more time to play. Aside from the growing, creeping fear of this new coronavirus that was ravaging China and finding its way across Europe, January brought with it the disappointing news that the long-awaited Cyberpunk 2077 (this name is going to pop up again; consider yourself duly warned) was delayed by a whole five months — pushed back from April to September. February was soon upon us and as COVID-19 (as it had begun to be known in common parlance) began to take grip of Europe, large swathes of Asia, countless hours of airtime and endless reams of newsprint.

February soon turned to March and COVID-19 had leapt out from the TV screen and newspaper into the living room. Working from home every day of the week was (and remains) fairly stifling, but by cutting out the time spent commuting and socialising, it afforded the author more hours to get his game on, as it were. Microsoft revived its ‘Free Play Days’ on Xbox, while the historically stingier Sony launched its ‘Play at Home’ initiative for the PlayStation 4. Elsewhere, the Epic Games Store and Ubisoft’s UPlay handed out freebies to PC gamers. Statista puts the increase in sales (at the start of the pandemic, compared to the same time last year) of consoles worldwide at 155%, physical games at 82% and digital games at 52.9%.

The likes of PUBG, Fortnite and other similarly repetitive shooters have always had their mega fanbases and continued to have them. A by-product of being locked down and being unable to find avenues to ride oneself of one’s frustration was the growing tendency to vent one’s spleen on the internet. This claim isn’t based on any scientific data, but it sure felt that way looking at the sheer nastiness of a percentage of the gaming community on social media in 2020. There used to be a time when Game of Thrones and Arsenal Football Club were believed to have the most toxic fanbases on the planet. This year was the gaming community’s turn to stake its claim to that extremely dubious distinction.

8)    A Death at Sea on the 'Row of Life' [Source: Outside Online]
Paralympic rower Angela Madsen had plenty to worry about as the coronavirus spread across the country. She was on a quest to become the oldest woman—and first paraplegic—to row the 2,500 miles between California and Hawaii solo. She had previously won five gold medals, in swimming, wheelchair slalom, and billiards at the National Veterans Wheelchair Games. In 2002, at age 42, she entered the World Rowing Championship—her first international rowing competition—and took silver. For the next four years, Madsen went undefeated. “My Olympic dream,” she wrote, “became my Paralympic dream.”

Talking about her expedition, she was not nervous about the journey, but she was nervous about the raging pandemic. “I’m already feeling a sense of relief,” she told. “I’m going to be safer out there.” Like everything on the Row of Life, Madsen’s 20-foot, self-righting rowboat, the food was stored in watertight hatches built around her seat, where for the next three months she planned to spend 12 hours a day rowing west. “Whatever my purpose is in this life, my differently-abled, physically-challenged, broken-down, beaten-up body seems to be the vehicle required for me to achieve it,” Madsen once wrote. “If I could go back and change things, I would not.”

In the midst of her journey, she lost connection with her friends. Deb, her partner, examined Madsen’s path on the GPS to see if there was any forward momentum to indicate rowing. After a few minutes of deliberation, Soraya Simi, a 24-year-old filmmaker documenting Madsen’s journey, convinced Deb it was time to call the Coast Guard’s Joint Rescue Coordination Center (JRCC) Honolulu to request a rescue. It was a clear, serene early evening over that desolate swath of the central Pacific when the C-17 made a low pass over Madsen’s position and identified her lifeless body floating in the water, still tethered to the boat. The Polynesia, German cargo ship, arrived and dispatched a crew to retrieve Madsen’s body. Other than some scrapes and bruising on her lower right leg, Madsen’s body was unharmed. An autopsy later concluded that she had drowned. How, exactly, will never be known.
  
9)    In Diwik Singh Chhalani's quest to restore old radios, a coming together of nostalgia and sustainable methods [Source: Firstpost]
Diwik Singh Chhalani, an advertising professional, quit his well-paying corporate job in Delhi to return to his ancestral home in Bikaner, in 2015. From the wreck of his abandoned old home, Chhalani brought back to the city an object he had carefully guarded over the years: his grandfather’s old radio. “Each year, my mother would try and get rid of it during the Diwali cleaning, but I always had my eye on it and kept it safe,” he says. This small obsession soon turned into a full-time project, as Chhalani remained adamant on rescuing this acutely modern object from the dredges of history. Along with a carpenter and an electronic engineer, he began restoring the radio and turned it into a Bluetooth speaker, its original grace and aesthetic intact. Thus was born Diwiks, a modern version of the radios of yore.

Murphy Radio, which entered India in 1948, is perhaps the most popular brand. At least two generations of Indians grew up listening to it, and in most rural corners of the country, the practice probably continues. Globalisation in the '90s quietly ushered in the end of the radio, with pre-recorded cassettes and discs taking over. Chhalani, therefore, doesn’t just collect radios — he collects stories. The process of restoration is as much about sourcing as it is about paying close attention to detail. Now based out of Bikaner, Chhalani collaborates with local artisans Ustad Mainuddin and Manoj Suthar to revive these rectangular antiques that families have held onto, largely for sentimental reasons. The team usually works on one piece at a time. It’s not about maximising output, but rather micro-focusing. The restoration of a single unit can take anywhere between three to four months.

Mr. Chhalani found his calling at his old home, where his workshop is now set up. “The old structure that was our first home remained untouched, as if it was waiting for me to set up my workshop. For our first collection, I repurposed the old windows and doors to create the wooden casing for the speakers. Reclaimed wood has been a part of our story and inspiration ever since,” he says. Though the idea for Diwiks was born out of a sense of nostalgia, Mr. Chhalani claims it is also a response to the lack of aesthetic plurality in design today.

10)    From facing rejections to being laid off to Country Counsel & Company Secretary at Boeing, India: Meet Dr. Akhil Prasad [Source: The Finance Story]
You realise the importance of introspection, self-assessment, self-improvement, and upskilling after reading the story of Dr. Akhil Prasad. Growing up in Meerut, India, he was born with a silver spoon. However, everything started to change when his family businesses started to flounder and the family went into deep financial problems. After clearing all company secretary examinations, he applied to several companies only to get rejected at every interview. After 15 job rejections, he was selected by Filaments India Limited in New Delhi. The organizations looked at a CS, as a compliance career and often overlooked the potential that a CS could offer as a corporate counsel. Soon he realised that he needed to upskill and decided to pursue specialization on the legal side.

After he had finished his law degree around 1996, he was looking to upscale his career as a corporate lawyer…only to be told by one recruiter at a large company that his law degree lacked significance and carries no reputation! About his event he says, “He selected my CV, called me for an interview, and told me this to my face! I wondered why would someone do this! I then realized that had he just rejected my CV; I would not have received that feedback, which was one of many of my career shaping moments.” He took the feedback positively and immediately decided to pursue a Master of Laws in Commercial Law [LLM (Comm Law) from Meerut University. During his 10 years of daily travel from Meerut to Delhi, he completed four degrees.

Then destiny again shone on him and as he completed the LL.M program in 1998, in the year 2000, he was selected to be the Assistant General Manager: Legal for Electrolux Kelvinator and Company Secretary for Intron Limited (another Electrolux Group company). The then Managing Director indicated that he had selected me because he had a specialization in Commercial Law, he was Company Secretary and he was in possession of LLM. That isn’t where he stopped; he then pursued a Doctorate in Commerce [Ph.D. (Commerce)]. Also, there was a time when a company had laid him off, and after 42 rounds and 6 months later he was offered an opportunity with Fidelity Investments India, as its Head of Legal and Company Secretary. Fast forward, in 2012, he was approached by an international head-hunter for a role at Boeing. Not only did he got the job, but also he became the Board Member of its Indian subsidiaries.