No.24: Mammoth Tencent write-up, Investing in India, Chips and the PS5 Shortage, History of Google Search
Everyone has the tools to write, and there’s ample computing power and VC capital available to subsidize paid journalism. However, since an individual reader’s attention is limited, and they only have 24 hours in the day to absorb new content, there is a huge emerging market for curation – which helps readers increase their ROI on reading. Capital Buddha is a very small player in the curation industry – since I comment on a small number of articles or industries every week.
So how can I stay in the game, competing against emerging giants? I think there’s a few things to it:
1) I make it a natural extension of my lifestyle. If I can write as much for my own research process as for others, it becomes sustainable because it automatically fits my life. If it so happens that this writing continues to be of value to readers, then it is likewise sustainable from a demand perspective.
2) Keep providing a free product – my usual weekly digest. There are no plans to change this. I enjoy writing about a broad range of topics. But I also have some detailed pieces stored which I plan to release as paid. If these paid pieces produce one good decision a year (or help avoid a bad one) for readers, then this is probably worth some level of monetary investment into Capital Buddha paid posts.
3) Finally, I think improving curation ability is probably a skill itself. How can I improve my information sources? How can I figure out which information produces the highest return on time spent reading – for either a niche or general audience?
I love the project because it produces a win-win. It lets me learn in public, keeping a humbling track record of predictions or thoughts at a particular timestamp. It also lets the readers learn something or be diverted to great information sources.
So, I hope that you can continue to subscribe and share and trust that I trying to improve reader ROI over the coming months and (hopefully) years.
Mammoth Tencent Write-up
I was sent this mammoth write-up about tech giant Tencent done by Vineyard Holdings (@JordsNel). It’s a riveting read (my wife and I disagree on the definition of “riveting” here) which goes through the past, present, future, and geopolitical landscape that Tencent operates in. Looking at the current political backdrop in China, along with the fact that Tencent shares have basically been cut in half over the past few months, this amazing write-up deserves a read.
(h/t @goodinvestingc Tilman Versch)
India and Quasi-Monopolies
After a chat with an Indian investor over the weekend, I feel a tad envious of locals who can invest there. Unfortunately, my OCI status was too difficult to obtain from abroad so I’ve had to shelve my ambitions as an Indian investor for now. Virtually every industry is growing double digits (my friend laughed at me when I even entertained the possibility of an FMCG player growing single digits).
One of the interesting features of the market is the number of quasi-monopolies listed there. Indian Railways is one of them – where logistics providers like Amazon “negotiate” to get rail capacity. Indian Energy Exchange is another incredible company that is the winner-take-all player for trading electricity – an industry very much in its infancy in India. They have also clipped on another gas trading business which is also just getting started.
Another feature of Indian public markets is that the number of listed companies goes up every year. In Europe and the US, PE buyouts, tech start ups staying private longer, and the huge compliance cost of being public means that the number of companies is essentially staying flat in some places or going down in others – limiting the overall public investment opportunity in the West.
India also has FDI restrictions, meaning that foreigners can’t invest capital in the country very easily. This means that the local Indians who can stay away from fraudulent promoters have a free lunch. There are many opportunities that even the best and brightest global investors are blocked from – meaning that savvy locals have a huge advantage.
It’s after talks like these that I get a feeling for what it must have been like for local Americans like Buffett and Munger in the 1950’s and 60’s – an economy growing 5% every year, where there were no institutional investors to compete against. The question back then wouldn’t have been “Am I going to get rich?”, but more “How rich am I going to get?”.
However, I suppose us non-Indian citizen Capital Buddha readers can’t complain. After all, anyone who has enough time to read through this newsletter probably has both free time and capital available. We are probably asking ourselves some version of the above questions – it’s just our path may not be fully through public equity markets.
Chips and the PS5 Shortage
Amazing interview about the chip shortage and the contagion through to device, auto, gaming, mobile and appliance manufacturers. Below is a quote which also illustrates the precision and complexity inherent in making chips.
History of Search
I loved this podcast as it goes through the opportunities, challenges and trade-offs experienced by Google to build the search business.