Ten interesting things we read this week

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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: ESG Investing (Stock-picking for humanity), Sports (Are penalty shootouts a passé), Work Culture (Art and science of making hybrid work work in India), Business (American fried chicken has its origins in slavery) and Health (Why cutting carbs is so tough).

Here are the ten most interesting pieces that we read this week, ended July 10, 2021.

1)     Stock-picking for humanity [Source: aeon.co] 
Environmental, Social and Governance (ESG) investing has come to the fore lately. Many investors are holding companies accountable for the harm they are doing to our planet. Suppose you own a share of Exxon, you might want the company to increase the height of its ocean oil platforms to account for sea level rise (as they have done, in fact). But if you want to actually mitigate climate change, you might prefer Exxon to decrease its outsized emissions. These are dramatically different lenses to apply to responsible investment. Responsible investment can’t even deliver its central promise in the long term, when there will be no such thing as protecting a portfolio against catastrophic climate change.

There is a group of people working towards it. Universal owners are large long-term investors who own a diversified portfolio – pension funds, sovereign wealth funds, or university endowments, for example. They control a majority of global capital markets, and have no choice but to worry about ‘externalities’ – the costs that companies impose on the rest of society but don’t pay for themselves, such as climate change or inequality. Maximising the effectiveness of responsible investment demands a laser-like focus on new money and new fossil fuel infrastructure. Having an impact doesn’t involve stock-picking within public markets; it involves changing the composition of the stock market by controlling which companies gain support along the way to being listed in the first place, and which are permitted to grow through easy access to debt thereafter.

2)     Casualties of perfection [Source: Collaborative Fund] 
No matter what, we all are going to die one day or the other. There’s nothing permanent. Also, we all are little imperfect. Biologist Anthony Bradshaw says that evolution’s successes get all the attention, but its failures are equally important. And that’s how it should be: Not maximizing your potential is actually the sweet spot in a world where perfecting one skill compromises another. Evolution has spent 3.5 billion years testing and proving the idea that some inefficiency is good. We all strive to maximize our time. Try and use it very efficiently. But an overlooked skill that doesn’t get enough attention is the idea that wasting time can be a great thing.

Albert Einstein put it this way: “I take time to go for long walks on the beach so that I can listen to what is going on inside my head. If my work isn’t going well, I lie down in the middle of a workday and gaze at the ceiling while I listen and visualize what goes on in my imagination.” Nassim Taleb says, “My only measure of success is how much time you have to kill.” Just like evolution, the key is realizing that the more perfect you try to become the more vulnerable you generally are. So, just chill, and take some time out of your busy schedule and go for a walk, exercise or listen to your favourite music.   

3)     How modern corporate work culture is inspired by an over-achieving Soviet miner from the 1930s [Source: Scroll] 
In August 1935, a young Soviet miner named Alexei Stakhanov managed to extract 102 tonnes of coal in a single shift. According to Soviet planning, the official average for a single shift was seven tonnes. Stakhanov’s personal striving, commitment, potential and passion led to the emergence of a new ideal figure in the imagination of Stalin’s Communist Party. He even made the cover of Time magazine in 1935 as the figurehead of a new workers movement dedicated to increasing production. Stakhanov became the embodiment of a new human type and the beginning of a new social and political trend known as “Stakhanovism”.

This trend holds true in today’s corporate world as well. Stakhanov was a kind of early poster boy for refrains like: “potential”, “talent”, “creativity”, “innovation”, “passion and commitment”, “continuous learning” and “personal growth”. They have all become the attributes management systems now hail as the qualities of ideal “human resources”. Stakhanov ceased to be a person and became the human form of a system of ideas and values, outlining a new mode of thinking and feeling about work. Stakhanov died after a stroke in Donbass, in eastern Ukraine, in 1977, but his legacy still lives on. Also, the truth is that people do have limits. They do now, just as they did in the USSR in the 1930s. Possibilities are not infinite. Working towards goals of endless performance, growth and personal potential is simply not possible. Everything is finite.

4)     Are penalty shootouts the fairest way to break football deadlocks? [Source: The Economist]
The first time when a football match was decided through penalty shootout was in 1976. It was the final match of the European Championships between Czechoslovakia and West Germany. With the Czechs already ahead 4-3, up stepped Antonín Panenka. Feinting to put the ball into the corner, and waiting until the German goalkeeper had dived full length to his left, the Czech midfielder delicately—daringly—chipped the ball into the centre of the goal, securing the title for his country. Penalty shootouts such as the one in 1976 are memorable, nerve-jangling spectacles. But are they a fair way of deciding a football match? Shootouts are such levellers that they are often described as lotteries. Studies have found little evidence that they favour better sides. This article suggests that there are two ways to come up with a fairer tie-breaker.

1) Improve the shootout format itself: When teams take alternate attempts at goal (i.e., ABAB), the team going first has been proven to have a significant advantage. It wins around 60% of the time, according to a study from the London School of Economics. That is probably down to the psychological pressure on the players shooting second, who must often score to keep their side’s hopes alive. 2) Give the more deserving side the better chance of winning is to do away with penalties: One option is a different kind of shootout, in which players dribble the ball from the centre circle and have a set amount of time to beat the goalkeeper (sometimes an outfield defender is also added). This may require more skill than merely shooting from 12 yards.

5)     The art and science of making hybrid work work in India [Source: The Ken] 
When the pandemic struck, many lost their jobs. Those who were lucky to have a job were forced to work from home. A new culture that might remain with us forever. But, is working from home good for all businesses, and employees? In a survey conducted by The Ken, which had over 2,000 respondents, nearly 91% of those who had started a new job in the last 1.5 years felt “disconnected” from their new work environment. Around 37.5% said they couldn’t really gauge their company’s culture online. The challenges—of remote joining, dreary orientations, and physically distant employees—do take a toll.

“My colleagues want to come to work because they’re bored,” says an employee at Freshworks, a software-as a-service (SaaS) firm. If offices become places where people look for social bonding—and to escape the isolation of WFH—companies will have to figure out how to enable this safely. A hybrid working model would be the key. Globally, Apple wants people back at work for three days a week, though this has been met with resistance from its employees. In India, companies like Flipkart and Godrej are still charting out their hybrid plans. To make hybrid working a selling point, it’s not enough to stretch a new skin over old processes. The companies who have managed to build up a “trust dividend” or invested heavily in online collaboration tools are better prepared to transition.

6)     The perils of PR [Source: The Economist]
Every company these days have a team of PR or hire one for specific purposes. Handling the company’s image and keeping it clean is their motto. Any big business may need a team to handle its public image and to deal with the “reptiles” of the press, as Denis Thatcher dubbed them. Any firm wants to be seen not as a money-grubbing corporation that pollutes the environment and exploits its workers but as an innovative pioneer with sustainable operations and a social conscience. An expert PR executive can hone such a message and identify the best way of communicating it to investors and the wider public, for example by selecting the journalists and publications which will lend it a sympathetic ear.

 No matter how much the journalists love or hate the PR industry, they are often one of the only conduits for information about a company. In a sense, the relationship is an ecosystem, in which both parties regard the other as the parasites. Lastly, the author of this article says, “A lot of PR activity has zero impact on the client’s public profile. It seems like a more extreme version of the famous quote about advertising: three-quarters of the money I spend on public relations is wasted—the problem is knowing which three quarters.”

7)     The Dubrovnik Interviews: Marc Andreessen - Interviewed by a Retard [Source: niccolo.substack.com] 
In this interview, Marc Andreessen, an American entrepreneur, investor, and software engineer, talks about how the Internet is a force for good, on media conformity, the inevitable triumph of the WEIRD, Crypto, Retards, etc. Talking about the state of the internet today, Mr. Andreessen says that it’s better than what it was previously. He says, “I'm old enough to remember life pre-Internet. There were only three largely identical television networks, a few radio stations, a newspaper or two, three printed news magazines, a handful of book publishing houses, and a few mimeographed newsletters.” He also adds how the internet can call out one’s bluff.

Further, he talks about his investments, Substack and Clubhouse, and why they are good opportunities to build better businesses and an actual marketplace of ideas. On cryptocurrencies, he says that it is a complex topic with a lot of puts and takes. So he gives an abbreviated answer and says that cryptocurrency is not a threat to other currencies in the world. Lastly, talking about the online world, he says, “Most people will be able to express far fuller versions of themselves and have richer and more fulfilling lives online than they would have in the old purely offline world.”

8)     American fried chicken has its origins in slavery [Source: 1843 Magazine]
Globally, people love fried chicken. Thanks largely to the efforts of a bearded colonel in a white suit and his secret blend of herbs and spices. But the dish’s history is far older than the self-styled colonel, and more fraught than his bland grin might suggest. The origins of American fried chicken probably lie somewhere between Scotland and west Africa. The 145,000-odd Scots who made their way to the American South in the 18th century brought with them a tradition of battering and frying chicken. It was these African-Americans, many of whom were forced to work in the kitchens of slave plantations, who perfected the art of frying chicken.

In 1741, the Carolinas revised their slave code to make it illegal for slaves to own pigs, cows or horses, chickens were omitted. The rest of the South soon introduced similar laws. Chickens, left to scratch around dung heaps and yards, became increasingly important to slaves, some of whom traded their eggs, feathers and meat. And that’s how African-Americans were associated with chicken. Despite that perceived relationship, or perhaps because of it, it was a white man, Harland Sanders, who capitalised on fried chicken in the form of the Kentucky Fried Chicken (KFC) chain, which he made into a global business. The success of KFC nullifies the efforts by African-American-owned businesses to reclaim fried chicken.

9)     The tail of acquisitions wagging India’s funding dog [Source: The Ken] 
Funding for any start-up is the key to keep the business going. While funding is important, it is, in a sense, the starting point of a race, where you equip a player with resources to compete and win. The endpoint signalling victory is different—namely, an exit. An exit marks the point where investors make money on their investments and founders win. Exits are the true measure of success for a startup ecosystem. While the scale and frequency of startup exits is not as high as that of funding events, over the past year, they have shown a marked increase relative to previous periods. Exits come in two forms—an initial public offering (IPO) or an acquisition.

According to some estimates, VC investment in India has increased 66% in the past five years, and is on track to reach $20 billion by the end of 2021. This trend is not local to India; it’s a global phenomenon. Considering the stampede of unicorns being minted this year, being worth $1 billion in 2021 isn’t nearly as impressive as being valued at $1 billion just a year ago, but it sure makes for great headlines. While you could argue that these numbers are artificial and inflated, the cash generated from acquisitions is as real as any other dollar bill. Ultimately, every market is a bundle of shared expectations, and exits are more important than funding when it comes to creating expectations.

10)     Are you a carboholic? Why cutting carbs is so tough [Source: The New York Times] 
Being on a diet is tough, when you love eating. Many people have a cheat day or cheat meal included in their diet. But, are you able to stick to your diet? Many won’t. And this article tells the reason why. Since insulin levels after meals are determined largely by the carbohydrates we eat — particularly easily digestible grains and starches, known as high glycemic index carbohydrates, as well as sugars like sucrose and high-fructose corn syrup — diets based on this approach specifically target these carbohydrates. If we don’t want to stay fat or get fatter, we don’t eat them. This effect of insulin on fat and carbohydrate metabolism offers an explanation for why these same carbohydrates, as Dr. David Ludwig, who studies and treats obesity at Harvard Medical School, says, are typically the foods we crave most; why a little “slip,” as addiction specialists would call it, could so easily lead to a binge.

Researchers like Dr. Ludwig and Dr. Robert Lustig, a pediatric endocrinologist at the University of California, San Francisco, who also see patients, and physicians, nutritionists and dietitians who promote carb-restricted diets, believe that a person can minimize these carbohydrate cravings by eating lots of healthful fats instead. Ultimately, any successful diet is by definition a long-term commitment. We tend to think of diets as something we go on and off. And if we fall off, we think the diet failed. You can also learn to identify plan for, and avoid situations that weaken resolve or increase cravings. “If I know that at 3 p.m. I have a little slump and will want to go to the vending machine, then I can have food available that’s the equivalent but that won’t trigger a binge,” says Dr. Laura Schmidt, an addiction specialist at the University of California, San Francisco School of Medicine. “Instead of sugary soda, I can drink sparkling water with a lime in it.”