Curiosity@Intelsense
Weekly dose of learning
1.
The market is not just a weighing machine, it’s also a voting machine
In Warren Buffett's words, he said, “The stock market is both a weighing machine and a voting machine”. And so, what did he mean by that? He said, it's a weighing machine, in the sense, what you are trying to do, you're looking at companies and trying to decide what they or the market, what is the right valuation for a market? What's the right yield it should be on? With the company, what's the intrinsic value of that?
But it's also a place where a lot of investors are meeting and doing different things. And at times, if they're all voting the same way, either positively or negatively, the market can be carried way above its intrinsic value, the right value for it, or at times when people are very pessimistic, it can be carried well below.
And you need to know that cycle and be aware when things are overvalued and the sentiment is too positive, and the perception is too good. And vice versa.
2.
Longevity of Japanese businesses
Back in 2008, a Bank of Korea report found that of 5,586 companies older than 200 years in 41 countries, 56% of them were in Japan. In 2019, there were over 33,000 businesses in Japan over a century old, according to research firm Teikoku Data Bank. The oldest hotel in the world has been open since 705 in Yamanashi and confectioner Ichimonjiya Wasuke has been selling sweet treats in Kyoto since 1000. Osaka-based construction giant Takenaka was founded in 1610, while even some global Japanese brands like Suntory and Nintendo have unexpectedly long histories stretching back to the 1800s.
The main reasons, studies show and as per various experts, are:
Japanese companies emphasize on sustainability, rather than quick maximization of profit. This is a major reason why so many businesses have such staying power. “In Japan, it’s more: how can we move the company on to our descendants, our children, our grandchildren?”
It is because of the general long-term orientation: the culture of respecting tradition and ancestors, combined with the fact that it has been an island country with relatively limited interaction with other countries.
Sticking to core competency
Pic of the Week
The drug discovery process
Thought of the Week
No amount of sophistication is going to allay the fact that all your knowledge is about the past and all your decisions are about the future. - Ian Wilson (GE executive)
Forecasts create the mirage that the future is knowable. - Peter Bernstein
Video of the Week
In the Media
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