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 (Importance of useless knowledge in business), Investing (Approaching investing amidst the second wave in India), Technology (The Big Tech battle over privacy), Mental Health (Laws of emotional mastery) and Sports (Effects of endurance exercise on the heart).
Here are the ten most interesting pieces that we read this week, ended May 8, 2021.
1) The importance of useless knowledge in business
Most management books simplify the complicated world of business by providing attractive solutions with a high level of perceived usefulness. This article praises the value of the arts, perceived by some as useless knowledge. The author of this article writes how he is inspired to learn ‘useless’ subjects, such as philosophy, ancient Greek or anthropology. His degree in the humanities has enhanced his engineering and management qualifications, and it has resulted in many publications and conference presentations. To become the best possible manager, you should invest time in acquiring ‘useless knowledge’. The type of knowledge that does not directly enhance the bottom line, but enlightens the individual.
Useless knowledge is not the type of information you get from reading the trivialities on Twitter feeds or Facebook. The canon of useless knowledge is more profound and includes philosophy and its continuous questioning of everything, the lessons of history and appreciation of the arts—the humanities of the liberal arts. The words “useless knowledge” is problematic because it is a contradiction. There is no such thing as useless knowledge. A more suitable term would be indirect knowledge. This is the type of knowledge that solves problems by introducing new perspectives from outside the world of business. Wielded correctly, understanding the humanities will make you a better manager by understanding new perspectives.
Knowing some basic philosophy of science helps managers to comprehend what ‘evidence-based management’ actually entails. Visiting an art gallery during lunch will reset your brain and provides new inspiration to solve your mundane work problems. Reading literature will help you to understand your customers better. Useless knowledge makes you question the certainties of life; it creates a thoughtful and reflective mind, protected against impulsive decision making. For this reason, managers should embrace useless knowledge and study the classics, and the understand the humanities. Read some of Plato’s dialogues and learn from Socrates how deviant behaviour leads to innovation.
2) Richer, wiser, happier with William Green
[Source: The Investor’s Podcast Network; Google Podcasts
In this podcast, William Green, the author of “Richer, Wiser, Happier”, talks about how the best investors can teach us not only how to become rich but how to improve the way we think, reach decisions, assess risk, build resilience, and turn uncertainty to our advantage. The best investors are master game players who consciously maximize their odds of long-term success in markets and life while also minimizing any risk of catastrophe.
Some of the stories that Mr. Green talks about are: 1) Why you should invest like Tom Gayner if you aren’t as smart as Warren Buffett; 2) Deep personal insights into John Templeton’s unique personality; 3) What we can all learn from Bill Miller’s investing and life crisis during the great financial recession in 2008-2009. While working on this book, Mr. Green focused on people who he admired the most; these include Bill Miller, Charlie Munger, etc. They have figured out how to live.
He also says how he admires John Templeton. He says that Mr. Templeton is the most self-disciplined person that he has come across. He also talks about investing techniques of Warren Buffet, Mohnish Pabrai, Guy Spier, Bill Miller, and others. He says every investor is unique and there’s something to learn from each one. This book will surely open up your mind in terms of investing, and give you a deep-dive into the investment philosophies of some of the great investors. 3) Approaching investing amidst the second wave in India
Nobody knows how many waves of Covid there will be. But, one thing is sure that the way we live, commute to work, etc. will change immensely. And that includes our investments as well. In this article, the author talks about how our investments can change. Indian equities: Risk-reward is not in favour of Indian equities; they are highly priced, and except for exporters, especially IT businesses, our businesses face deep economic uncertainty. The Indian equity investor has climbed the wall of uncertainty through FY21 and returns on Indian equity investments have been good. But this has been true for asset prices across the world, except bonds. Since asset prices are being driven by global liquidity, one has to look at the comparative performance of Indian and other equities.
US equities: US stocks will continue to have the edge, as the US government supports consumers with income transfers, and companies have deep access to cheap funds. Over 50% of US adults have been vaccinated, and all adults are now entitled to free inoculation. Meanwhile, the US central bank is committed to keep interest rates low, which makes business expansion easier, and lowers the relative attraction of fixed-income assets. Real estate: The author doesn’t recommend Indian property right now. Even though interest rates are low, there is no appetite for real estate. The Indian family is financially stressed; the household debt-to-GDP ratio has been rising since 2018 and hit 37.1% by September 2020. This situation is not going to improve in a hurry.
Fixed income: At current rates, fixed deposits barely keep up with inflation. If you pay any income tax, you’re actually losing buying power when you keep money in the bank. Gold: In times of uncertainty, gold has historically been a haven. When governments spend way beyond their means, and central banks print lots of money, gold typically shines. It has been the ‘anti-dollar’, the defence against a flood of cash. Crypto: These are early days in crypto, and my understanding is primitive. Block-chain is a secure way of confirming both ownership and transfer of assets and will remove both costs and intermediaries from many transactions. As this technology develops, sharper ways will be found to write block-chain into contracts, to eliminate manual approvals. Which cryptocurrencies will rule this world, is difficult to say. The fear of excessive paper currency is finding comfort in these digital currencies whose supply is controlled, a sense of comfort that many seem to deeply value.
4) Why disgraced CEOs rarely fall as far or as fast as everyone else
[Source: Financial Times
This article highlights the Post Office scandal and how business leaders often enjoy the benefit of the doubt. Recently, Paula Vennells, the CEO of UK government-owned Post Office, apologised to sub-postmasters wrongly convicted over financial shortfalls in branch accounts that were in fact caused by faulty computers. She resigned from two board positions and stepped back from her role as a minister in the Church of England, pledging to “focus fully” on the inquiry into what went wrong. The IT system was installed before Vennells’ time. Campaigners, though, accused her of aggressively pursuing prosecutions and welcomed her downfall.
The comparison between her trajectory and that of the hapless sub-postmasters is instructive. Many also rose to be pillars of their communities. After the fraud accusations, they had to give up positions of trust and saw their reputations undermined. Noel Thomas told the BBC that he had been “pretty respectable” in the Welsh village where he was a sub-postmaster and councillor. “I really fell off the ladder,” he said. Vennells, on the other hand, not only clung on to the ladder; for a while she continued to ascend it. In 2019, the year she left the Post Office, she was awarded a CBE by the Queen, became chair of an NHS hospital trust, and added non-executive roles at Dunelm, the retailer, and the Cabinet Office, to her directorship of Morrisons.
The Post Office case illuminates the stark asymmetry of disgrace. If business leaders falter, their fall is usually well cushioned, not only by the financial perks of office, but by a safety net of useful contacts — a safety network, if you like. In other words, the ex-Post Office boss received one benefit her former employer failed to extend to Thomas and the other postal workers wrongly accused of embezzlement and dishonesty: the benefit of the doubt. Whatever the inquiry determines, she will probably never enjoy the clear outcome that the sub-postmasters have finally achieved following their successful appeal against wrongful conviction.
5) Apple takes on the internet: the Big Tech battle over privacy
[Source: Financial Times
Tim Cook is usually a soft-spoken person, but when it comes to online privacy, he gets fired up. In January the Apple chief executive railed against “data brokers, purveyors of fake news . . . trackers and peddlers of division . . . hucksters just looking to make a quick buck.” Cook said that if “everything in our lives can be aggregated and sold, then we lose so much more than data, we lose the freedom to be human”. These are fighting words, and the policy to back them up was rolled out this week. In its new operating system update, the $2.2tn tech giant clamped down on how app developers collect data from its 1bn users in order to create personalised ads.
Owners of iPhones the world over are now seeing in-app prompts asking if they are OK being “tracked”. Users that click “Ask App Not to Track” deprive developers from seeing their IDFA — identifier for advertisers — a string of numbers associated with each iPhone that build user profiles as they move from app to app. Charles Manning, chief executive at Kochava, an adtech group whose clients include Coca-Cola, Nike and the BBC, likens the policy shift to dropping “a bomb in a lake, just to see how many fish fly up”. Apple’s privacy push has been widely portrayed as a battle with Facebook, poster child for “free” apps monetised by ads. Arguably the better framework is Apple versus Everybody — as every company involved in advertising will be forced to learn the new rules.
Matt Voda, a consumer privacy advocate and chief executive of OptiMine, a marketing analytics platform, says it’s tough to ascertain if Apple is being hypocritical, but on the whole he considers Apple’s push a “revolutionary” move that will force transparency across the digital ads marketplace. “If Apple succeeds, this actually shows the extraordinary power they have over their ecosystem and it actually hurts them as it relates to antitrust,” says Mike Fong, chief executive of Privoro, which makes security hardware for smartphones. “You have the biggest companies in the world — Facebook, Tencent, TikTok — plus the biggest government in the world. And Apple literally faces them all down. And wins.” 6) The Bubble of a Dream
This is the story of Peter Bromka’s, a marathoner, two-year journey to attempt to qualify for the USA Olympic Trials Marathon. A 2:19 Trials Qualifying marathon is two 69:30 half-marathons back-to-back. He tried to break the 2:19 mark required to qualify for the US Olympic trials in the California International Marathon, 2018. But, failed. He finished the marathon in 2:20. But, in the fall of 2019, he attempted for the second time at qualifying for the trials. He writes, “At 38 years old I felt stronger than ever before, but reaching the finish line under 2:19 would take an extra leap.” But, he finished in 2:19:02. Missed by just two seconds!
What had become most clear in attempting to qualify was that the point of all this was to maximize. To feel something. To turn the volume on life all the way up and stare straight at the scariest, most exciting challenge you could find without looking away. He writes how he tried again for the third time to qualify for the USA Olympic Marathon Trials at the 2020 Houston Marathon. But, this time too, he failed with a timing of 2:19:23.
Watching the US Olympic trials hurt him the most. But, he learnt that just like him, many were heartbroken as they couldn’t get to the top 3 to represent their country in the Olympics. He writes, “Not racing there was a failure for me, sure, but in some ways, the entire event was about failure.” The commitment of this whole endeavor was simple: to push until you lose control. To reach that line. But embracing failure is the essence of this sport. And this lesson holds true in our personal and professional lives as well. No matter how much you try, there would be times when you would fail. But, pushing the limits is the key. 7) Laws of Emotional Mastery
[Source: Psychology Today
They say mental health is more important than physical health. Mental health is neither a destination nor a property. Rather, it is something you do —the practice of proper mind management. Like driving, the process of mental health requires its own set of specific skills. What are these skills? Think accurately: Cognitive psychology research over the past few decades has shown that our thoughts—beliefs and subjective interpretations—give rise to our emotions and behavior. Thinking, in other words, is important for our emotional state. Accurate thinking is like buying eyewear. You don’t just grab onto the first pair of glasses you see. Rather, you check out the merchandize, try on a few pairs, pick several viable candidates for purchase, compare them based on assorted criteria of evidence— fit, price, style, brand—and choose the most appropriate pair for you.
Neither deny nor obey emotions—accept them: Science has yet to fully decipher the nature, structure, and origins of emotional experience. What we do know is that, pragmatically, emotions constitute a type of data that is often useful for navigating the world. A measure of emotional arousal helps us learn new things and remember important events. A baby’s cry of distress effectively summons the caregiver’s attention. Fear keeps you off the dangerous edge of the cliff. To properly regulate emotional data, we must refrain from either denying or obeying emotions. Instead, there’s a simple two-step process. The first step is acceptance. Emotions are, in a sense, internal weather, and it’s as advisable to accept the truth and fact of our emotions as we do the weather’s. If you’re anxious or sad, your best first move is to acknowledge and accept what you feel: I am human. Humans have emotions. This emotion is part of my experience right now.
Tolerate short-term pain to avert long-term suffering: Those who cannot tolerate acute temporary discomfort now condemn themselves to chronic suffering later. Behavioral engagement, facing fears and challenges, is usually the better approach. It helps in several ways. First, it allows us to improve our understanding of the terrain and hone our skills. Many things we first perceive as difficult are not inherently hard but merely effortful because they’re new, and hence under control processes. Practice makes competence. And practice requires engagement. In addition, behavioral engagement tends to bring you into regular, productive contact with others, which may strengthen community ties and shore up your social support network. Finally, behavioral engagement is useful because action begets emotion. Contrary to popular belief, the emotion-behavior link is reciprocal. At times, our actions may be emotionally driven. But other times, emotions are action driven.
8) We’re polluting our future home – before we even live there
[Source: World Economic Forum
Space is huge. Why are we so intent on exploring space when we have so many problems right here on Earth? From resource management, to multispectral imaging, to radar mappers, our space-based tools can help us solve Earth-based problems. Soon, armadas of small satellites will connect the world by bringing the internet to everybody. As we are realizing the benefits of our orbiting workforce, however, we must also be proactive in mitigating the rapid proliferation of space debris. At present, more than 2,200 operational satellites are orbiting Earth. But the growing concern is the inoperative satellites, spent rockets and debris that also clutter the region – collectively called space debris or space junk.
The mass of debris in Earth orbit totals nearly 7 million kilograms. While orbits eventually decay and debris can re-enter and burn up in Earth’s atmosphere, the process can take years. Both satellites and space junk are primarily concentrated in two regions. In Earth’s equatorial plane, just under 30,000 km above Earth surface, hundreds of satellites are in geostationary orbit. Most are communications and weather satellites, but they share their orbit with deceased predecessors. The amount of junk in geostationary orbit pales in comparison to the satellites and debris in the zone that extends just above Earth’s atmosphere upwards to 2,000 km above its surface – known as low-Earth orbit, or LEO.
In the mid-1990s, NASA issued the first guidelines to mitigate the growing orbital debris hazard; other international agencies followed. In 2002, the Inter-Agency Space Debris Coordination Committee, comprised of 10 member nations, adopted a consensus set of guidelines for the “coordination of activities related to the issues of man-made and natural debris in space.” If the guidelines are followed, we can have a cleaner and more compliant environment in space for the future.
9) 4 lessons entrepreneurs can learn from John Paul DeJoria's rags-to-riches story
[Source: Entrepreneur India
The co-founder of the Paul Mitchell line of hair products and the Patrón Spirits Company, DeJoria was homeless twice before he became a billionaire. Here are four things entrepreneurs can learn from his incredible rise from poverty. 1) Don’t be too proud to ask for help: When DeJoria was homeless, he was too proud to ask his mom for a place to stay; he wanted to make it on his own. Instead, he asked her for a few hundred bucks to hold him over until he got back on his feet. At one point, DeJoria's friend, a motorcyclist, offered him a spare room, where he and his 2-year-old son could stay. Some of the "biker mamas" — DeJoria's words — even helped take care of his son, allowing him to go out and hustle. DeJoria admits it was a life-changing show of support. As an entrepreneur, sometimes you’re going to need help. No self-respecting entrepreneur wants a handout. But pride to the point of blindness can prevent you from ever reaching your goals.
2) Bootstrap: The first time he was homeless, DeJoria needed money to buy food, so he collected soda pop bottles, cashing in two cents for a small bottle and five cents for a large one at grocery and liquor stores. Bootstrapping ensured that he could feed himself and his son. Bootstrapping also helped him in his first business. He forewent a salary or any dividend payouts for the first few months and just plowed every penny back into the business. That business now turns over several million a year and boasts over fifty employees. 3) Don’t count your chickens: Entrepreneurship is sometimes spelled R-I-S-K, but pointless risk is folly. As far as cashflow goes, keep your eye on it. And don’t buy that new fleet of Tesla Model S company cars because you’ve got a contract signed with money not yet in the bank. Wait ten minutes and save yourself undue indigestion and stress.
4) Blaming others is pointless: Most of us find some way or the other to put the blame on someone. But, entrepreneurs need to get out there and get busy. There’s no time for moping. And blaming others won’t help fill your bank account. Those who have had to claw their way up from nothing tend to look at money a little differently. Money comes and goes, but their internal belief in their ability to make more of it never fades. And that is the true spirit of entrepreneurship — the willingness to take on the challenges the world throws your way and the conviction that none of them are insurmountable. 10) The effects of endurance exercise on the heart: panacea or poison?
One needs to exercise for at least 30 minutes every day to stay healthy. At least that’s what most of the doctors recommend. Regular, moderate, aerobic physical exercise reduces cardiovascular and all-cause morbidity and mortality. But, what about the endurance athletes? A meta-analysis investigating the relationship between physical activity (measured through either self-reporting or objective assessment) and mortality among 883,372 individuals demonstrated that the physically active groups had a 35% reduction in the risk of cardiovascular death and a 33% reduction in the risk of all-cause death over 20 years. A further meta-analysis assessing the association between accelerometer-determined physical activity and all-cause mortality showed that, regardless of intensity, a greater exercise volume resulted in reduced mortality.
Data from 15,000 Olympic medallists, regardless of sporting discipline or country, showed that these athletes lived an average of 2.8 years longer than controls and, in a follow-up study (mean 37.4 years; range 23.5–49.8 years), French athletes participating in at least one Tour de France event had a 41% lower mortality than the general population. Despite speculation surrounding maladaptive changes, lifelong endurance athletes have improved survival compared with the general population.
Endurance athletes exercise at the extreme end of the dose spectrum and consequently manifest some of the most profound cardiac adaptations to exercise. Emerging evidence suggests that some lifelong endurance athletes have a higher prevalence of high coronary artery calcium (CAC) scores (>100 Agatston units), myocardial fibrosis, RV dysfunction, AF and sinus node disease compared with healthy non-athletes. But overall, endurance athletes benefit from improved health and greater longevity, with sudden cardiac death (SCD) remaining rare. Until further data to the contrary are available, discouragement of lifelong endurance exercise is not justified.