Why Market Leadership ≠ Wide Moat? Insights from Down Under (Bamboo Innovator Insight)

The following article is extracted from the Bamboo Innovator Insight weekly column blog related to the context and thought leadership behind the stock idea generation process of Asian wide-moat businesses that are featured in the monthly entitled The Moat Report Asia. Fellow value investors get to go behind the scene to learn thought-provoking timely insights on key macro and industry trends in Asia, as well as benefit from the occasional discussion of potential red flags, misgovernance or fraud-detection trails ahead of time to enhance the critical-thinking skill about the myriad pitfalls of investing in Asia at the microstructure- and firm-level.

Makret Leadership Down Under


Default or not, Asia a hostage to U.S. debt

Default or not, Asia a hostage to U.S. debt

5:11pm EDT

By Choonsik Yoo and Kevin Yao

SEOUL/BEIJING (Reuters) – Unless the U.S. Congress settles a political showdown to raise the country’s debt ceiling in coming weeks, it will be left on the edge of an unprecedented default. But America’s main creditors in Asia may be the least of its worries. The creditors – China, Japan and other Asian governments – have a hoard of U.S. Treasuries in their $5 trillion cache of foreign exchange reserves, the equivalent of almost a third of U.S. gross domestic product. Despite having so much at stake as bond prices lurch violently, they are not about to do anything more than minor tweaking of their portfolios. Read more of this post

Book Review by The Rational Walk: The Manual of Ideas

Book Review: The Manual of Ideas

The Rational Walk, Published on September 27, 2013 at 4:01 pm

It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it – who look and sift the world for a mispriced bet – that they can occasionally find one.

— Charlie Munger

During a visit to Columbia Business School many years ago, a student asked Warren Buffett how one could best prepare for an investing career.  Mr. Buffett picked up a stack of financial reports he had brought with him and advised the students to read “500 pages like this every day”.  One of the students in the class happened to be Todd Combs.  Mr. Combs took the advice quite literally and eventually got into a habit of reading far more than 500 pages per day.  This work ethic contributed to a successful career running a hedge fund and a position at Berkshire Hathaway allocating several billion dollars of capital. Read more of this post

Arnault Pits Son Versus Daughter in LVMH Succession Test

Arnault Pits Son Versus Daughter in LVMH Succession Test

Two years ago, Bernard Arnault asked his son Antoine to run shoemaker Berluti, then this month he installed his daughter, Delphine, as executive vice president of Louis Vuitton. While her brief is to revive the handbag maker and Antoine’s task is to transform Berluti into a menswear titan, Arnault is auditioning both for another job: his own. At 64, the chief executive officer of LVMH Moet Hennessy Louis Vuitton SA (MC), already qualifies for his state pension. He hasn’t signaled he’s tiring of running the world’s largest luxury-goods company, but “at some point there is an element of succession that needs to take place,” said Berenberg analyst John Guy. Giving his children greater responsibility allows Arnault to test them, Guy said. Read more of this post

Ed Han and his wife went looking for birth announcements. What they ended up with was part of a $333 million payday

September 30, 2013


The Stork Brought a Bright Idea for a Business

Ed Han and his wife went looking for birth announcements. They ended up with part of a $333 million payday. Back in 2005, Mr. Han, a new Stanford M.B.A., and his wife, Polly Liu, were expecting a daughter and were scouring the Web for just the right notices to celebrate the event. “Going back and forth with store clerks to review endless, illegible faxed proofs of baby announcements just weeks after having a baby and likely sleep deprived seemed quite unfun,” Mr. Han says. But they couldn’t find anything affordable and well designed. Mr. Han—who had already been thinking about starting a business with a couple of friends—saw an opportunity. He joined with Laura Ching and Kelly Berger to start an online company that would design personalized baby announcements, and then go after more of the U.S. card market. Read more of this post

Schwarzman Says Selling BlackRock Was ‘Heroic’ Mistake

Schwarzman Says Selling BlackRock Was ‘Heroic’ Mistake

Steve Schwarzman said his decision 19 years ago to sell what would become the world’s largest money manager was a “heroic” mistake. Schwarzman, who runs Blackstone Group LP (BX), the largest manager of alternative investments such as private equity, in 1994 sold a mortgage-securities unit with $23 billion in assets to PNC Bank Corp. for $240 million. Schwarzman, Blackstone’s co-founder, had disagreed with the group’s leader, Laurence Fink, over methods of compensation, and the men parted ways. The unit, which traded mortgages and other fixed-income assets, changed its name from Blackstone Financial Management to BlackRock Financial Management. Read more of this post

Phil Di Bella: Passion is the one thing experience can’t teach

Phil Di Bella: Passion is the one thing experience can’t teach

Published 30 September 2013 11:44, Updated 30 September 2013 12:57

Phil Di Bella


Phillip Di Bella says, ‘Identify your passion, and see if you can build a business around it.’Photo: Glenn Hunt

I spoke at a conference for Banana Growers not long ago. Now, I know you’re thinking, what does Phillip Di Bella know about growing bananas? Nothing! So why did they ask me to speak? What could I share that would inspire farmers? The answer is: passion. Or more specifically, my own passion for my work, and my mission to inspire it in others, whatever their ambition. I think it’s a message that we all need to be reminded of from time to time. Read more of this post

How to trust intelligently

How to trust intelligently

Posted by: Tedblogguest
September 25, 2013 at 11:52 am EDT

“The aim [in society] is to have more trust. Well frankly, I think that’s a stupid aim,” says Baroness Onora O’Neill in today’s talk, What we don’t understand about trust. She argues that the aim to build more trust is a cliché, and instead what we need is more trustworthiness. Below O’Neill gives a more nuanced picture of how to trust more intelligently, based on her criteria for trustworthiness.

By Onora O’Neill

Nobody sensible simply wants more trust. Sensible people want to place their trust where it is deserved. They also want to place their mistrust where it is deserved. They want well-directed trust and mistrust. Trust is well placed if it’s directed to matters in which the other party is reliable, competent and honest — so, trustworthy. Can you trust the corner shop to sell fresh bread? Can you trust your postman to deliver letters? Can you trust your colleagues not to gossip about confidential matters? Can you trust the tax man to calculate what you owe accurately? Trust is badly placed if it’s directed to matters in which others are dishonest or incompetent or unreliable. Read more of this post

Why the Danish mermaid is happier than the S’pore Merlion

Why the Danish mermaid is happier than the S’pore Merlion

According to the second World Happiness Report survey released earlier this month, cold and unspectacular Denmark was again ranked the happiest nation in the world. Singapore in 30th place can at least boast of being the happiest in Asia.



According to the second World Happiness Report survey released earlier this month, cold and unspectacular Denmark was again ranked the happiest nation in the world. Singapore in 30th place can at least boast of being the happiest in Asia. The standard of living in both countries is high. Singapore ranks 4th in gross domestic product per capita; Denmark is 16th. The Republic has 5.4 million inhabitants, slightly fewer than the 5.6 million Danes. However, Denmark has the lowest level of income inequality in the world, whereas Singapore has one of the highest among the advanced economies. What are the secret ingredients of the Danes’ happiness? Read more of this post

Change rewards culture to fix the integrity minefield

September 29, 2013 8:37 pm

Change rewards culture to fix the integrity minefield

By John Authers

Is the UK’s wealth management industry “open, honest, transparent and fair”? That was the question put to several hundred members of the Chartered Institute of Securities and Investment this week, at its annual debate in the City of London. All worked in the industry. To vote against implied a belief that they were working in a “closed, dishonest, opaque and unfair” industry. And yet almost half did vote against, with the motion carrying only by a wafer-thin majority. Read more of this post

You Have a Great Idea. Now What Do You Do? Many people have no desire to start a business, but they want to make money from their inspiration. Here are some options for doing just that.

September 30, 2013

You Have a Great Idea. Now What Do You Do?

Many people have no desire to start a business, but they want to make money from their inspiration. Here are some options for doing just that.



Want to know a couple of secrets? You don’t have to be an entrepreneur to have a great idea for a business. And you don’t need to start a business to profit from a great idea. Inspiration can strike anybody—it happens all the time. Someone is struggling with a chore around the house and thinks of a gadget that would be a big help. Or maybe they’re rooting around for obscure information online and realize an app could automate the job. Read more of this post

It’s a woman’s world when nühanzi step up

It’s a woman’s world when nühanzi step up

By Chen Chenchen (Global Times)    08:11, September 30, 2013

Several photos that recently went viral on Weibo, or China’s Twitter-like microblog,showing a girl drinking from a jug instead of a cup and another trimming her toenails withan awe-inspiring pair of pliers rather than a clipper, have drawn attention to the risingdemographic of nühanzi, or manly women. In a bid to redefine the word “female” in China, these “tough Chinese girls” are pointing usback to the periodic table. Given that “fe” represents “iron” – “female” could translate to”iron male” or someone manlier than a man himself, they argue.  Read more of this post

David Teoh’s TPG becomes bigger than Qantas after jumping 21 per cent in a month

Andrew Heathcote Rich Lists editor

David Teoh’s TPG becomes bigger than Qantas after jumping 21 per cent in a month

Published 30 September 2013 11:53, Updated 30 September 2013 12:59

The personal fortune of publicity-shy billionaire David Teoh has grown to $1.3 billion after more share price growth at TPG Telecommunications, the listed telco he founded and runs. TPG stock is up 21 per cent over the past month and this rise alone has added $225 million to his net wealth. A 3 per cent fall the share price since September 19 has done little to slow the long term trend. Over the past 12 months, TPG’s stock has risen in value by 98 per cent to closer at $4.37 on September 27. In January 2009, the shares were worth as little as 15¢ each. Read more of this post

Why Aussie start-ups shouldn’t move to Silicon Valley

Adeo Ressi: why Aussie start-ups shouldn’t move to Silicon Valley

Published 30 September 2013 11:54, Updated 30 September 2013 13:49

The flight of many Aussie entrepreneurs to Silicon Valley has been well documented, so I’ll explain why I don’t understand this trend one bit. Let’s start with the obvious benefit of doing business in Australia. First, you have a largely wired and untapped market back home, with generally favourable regulation, a rapidly expanding technology sector and big opportunities in the growing domestic healthcare, transportation, education and government markets. Read more of this post

Roche immunotherapy drug may be ‘game changer’ in lung cancer

Roche immunotherapy drug may be ‘game changer’ in lung cancer

5:34am EDT

By Kate Kelland

AMSTERDAM (Reuters) – An experimental Roche drug that seems to work particularly well against lung cancer in smokers may be a “game changer” for these normally difficult-to-treat patients, researchers said on Sunday. Presenting detailed data from an early-stage trial of the drug, called MPDL3280A, in patients with a form of the disease called non-small cell lung cancer (NSCLC), investigators said what they had found was “great news for lung cancer patients”. Read more of this post

Eating Fish Among Habits to Cut Prostate-Cancer Risk

Eating Fish Among Habits to Cut Prostate-Cancer Risk

A set of six healthy habits, including eating more tomatoes and less processed red meat, helped men reduce their risk of dying from prostate cancer, a study found.

Researchers analyzed information gathered from almost 46,000 men for 25 years and found that those who adopted five or six of the habits had a 39 percent lower risk of developing lethal prostate cancer than those who adopted one or none of the habits, according to the results presented at the European Cancer Congress in Amsterdam yesterday. In another study involving more than 21,000 men, the risk reduction was 47 percent. Read more of this post

The Enigma of Chinese Medicine; If a system of medical treatment practiced for thousands of years can’t meet Western scientific standards, should it be dismissed?

SEPTEMBER 28, 2013, 3:00 PM

The Enigma of Chinese Medicine


A few years ago, while visiting Beijing, I caught a cold. My wife, who is Chinese, and wanted me to feel better, took me to a local restaurant. After we sat down, she ordered a live turtle. The proprietors sent it over. I startled as the waiters unceremoniously cut the turtle’s throat, then poured its blood into a glass. To this frightening prospect, they added a shot of baijiu, very strong grain alcohol. The proprietor and waiters, now tableside, gestured with obvious pride for me to drink the potent medicine. I winced, found the courage, and drank up. Read more of this post

Why the company behind Candy Crush won’t be the second coming of Zynga?

Why the company behind Candy Crush won’t be the second coming of Zynga

By Roberto A. Ferdman @robferdman September 28, 2013

It hasn’t even been two years since mobile game maker Zynga went public, then promptly saw its stock plummet to a fraction of its IPO value. Now, British-based game developer King, best known for its hit game Candy Crush, has reportedly filed paperwork for an initial public offering. Have they learned nothing? It’s tempting to compare King and Zynga, but there’s actually quite a bit to differentiate the two companies. Read more of this post

When BlackBerry Reigned (the Queen Got One!), and How It Fell

Published: September 28, 2013

When BlackBerry Reigned (the Queen Got One!), and How It Fell

Coming from a tiny Canadian company, it was an almost absurdly audacious proposition. In 1998, when many corporations were leery of e-mail, Research in Motion began selling the idea of sending it wirelessly through a device that ran on a single AA battery. But thanks to a tiny, yet effective, keyboard that brought the world thumb-typing and a network that ensured security, BlackBerrys became standard equipment on Wall Street and in Washington. While BlackBerry, as the company is now known, created and dominated what became the smartphone market, competitors, notably Palm, failed. But the company’s co-chief executives missed the real threat: they initially dismissed Apple’s iPhone as little more than a toy. After that, all their efforts were too late. On Friday, BlackBerry reported a $965 million loss, and BlackBerry’s future now appears to rest with a bargain-basement, highly conditional offer from its largest shareholder, Fairfax Financial. Whatever happens to the company, many expect that BlackBerry smartphones are now destined to become relics.



WhatsApp, from free texting to social network of its own

WhatsApp, from free texting to social network of its own

Over 25 billion messages are sent daily on the popular application, but advertisers are having trouble cutting off a slice of the action.

By Yisrael Fischer | Sep. 26, 2013 | 4:25 PM |  6

WhatsApp, the smartphone app that started as a nice, free application for text messages has become a social network on its own, thanks to the function that allows users to define their own chat groups. Close-knit groups of friends and relatives stay active all the time, and provide updates in real time. Everyone is there, from cousins, to classmates to groups from the workplace and the neighborhood. WhatsApp also presents a problem for Facebook, the world’s largest social-media network. While Facebook offers many more options, when it comes to basic communication, WhatsApp wins hands down, particularly among teens. Read more of this post

NSA Internet Spying Sparks Race to Create Offshore Havens for Data Privacy; Firms Tout ‘Email Made in Germany’ as More Secure; Brazil Wants Its Own Servers

September 27, 2013, 12:15 p.m. ET

NSA Internet Spying Sparks Race to Create Offshore Havens for Data Privacy

Firms Tout ‘Email Made in Germany’ as More Secure; Brazil Wants Its Own Servers


On the heels of allegations about U.S. government surveillance of Internet traffic, some foreign companies and politicians are seeing an opportunity. WSJ reporter Elizabeth Dwoskin explains.


Google Inc., GOOG -0.20% Facebook Inc. FB +1.69% and other American technology companies were put on the defensive when Edward Snowden‘s allegations about U.S.-government surveillance of Internet traffic emerged this spring. Outside the U.S., some companies and politicians saw an opportunity. Three of Germany’s largest email providers, including partly state-owned Deutsche Telekom AG, DTE.XE -0.28% teamed up to offer a new service, Email Made in Germany. The companies promise that by encrypting email through German servers and hewing to the country’s strict privacy laws, U.S. authorities won’t easily be able to pry inside. More than a hundred thousand Germans have flocked to the service since it was rolled out in August. Read more of this post

‘Lego’ Model for Exchange Software; Firm Links People, Insurers and Government Systems in Two States’ Health-Insurance Marketplaces

September 29, 2013, 7:52 p.m. ET

‘Lego’ Model for Exchange Software

Firm Links People, Insurers and Government Systems in Two States’ Health-Insurance Marketplaces


CALVERTON, Md.—Pradeep Goel arrived from India 23 years ago to study in America. On Tuesday, Mr. Goel, now chief executive of a fast-growing technology company, faces his toughest examination yet: Making sure the software behind two new health-insurance exchanges doesn’t crash. Mr. Goel likens his work to taking Lego pieces and snapping them together in a manner that’s never been fully tried before. In the past week, he has routinely worked past midnight with his team at a command center near Baltimore on Maryland’s insurance exchange. Read more of this post

Intel and Sony Ambitions for Internet TV Services Meet Skepticism

September 29, 2013

Intel and Sony Ambitions for Internet TV Services Meet Skepticism


Television services delivered via the Internet by companies like Intel and Sony could someday transform how Americans watch TV shows. But the services have to get off the ground first, and there are new doubts about whether that is going to happen. Intel’s consumer-friendly plan for a version of cable television that is streamed to paying subscribers — the same way Netflix is streamed — has been scaled back recently to satisfy channel owners, and its goal to introduce the service, called OnCue, by the end of this year has been scrapped. Intel says it now hopes to introduce it in 2014. Read more of this post

As video game players’ tastes shift toward smartphones and tablets, more and more of the money spent on console games goes to a small number of blockbusters

September 29, 2013

Shrinking List of Video Games Is Dominated by Blockbusters


Big video game makers, like their cousins in books and music, have scrambled in recent years to adapt to the digital technologies buffeting their business. Tens of millions of people now play games on smartphones and tablets, usually for a sliver of the cost of playing on a game console. But one part of the games business is thriving as never before: the blockbuster. Read more of this post

DirecTV to Help Finance Indie Films

September 29, 2013, 7:03 p.m. ET

DirecTV to Help Finance Indie Films

Deal With Independent Studio A24 Includes Early Rights to Video on Demand


DirecTV DTV +0.03% is taking a step into the movie-financing business. The satellite operator struck a deal with startup movie studio A24 Inc. to partner with it in acquiring independent films in exchange for rights to offer them exclusively on its video-on-demand services 30 days before they hit theaters. The deal brings an unlikely player from the pay-TV industry into the world of indie film financing. DirecTV is making an initial commitment of about $40 million to co-finance and market independent movies under the initiative. The first picture it acquired alongside A24 is “Enemy,” a thriller with Jake Gyllenhaal. Read more of this post

Chinese companies move into supply chain for Apple components; Threat to Taiwanese, Japanese and South Korean suppliers

September 29, 2013 12:40 pm

Chinese companies move into supply chain for Apple components

By Sarah Mishkin in Hong Kong

Chinese companies are increasingly designing sophisticated components for Apple’s iPhones and iPads instead of just supplying low-cost labour for assembling the high-tech devices. The shift is an indication of how Chinese companies’ rising technological capabilities are threatening the Taiwanese, Japanese and South Korean companies that now dominate the global electronics supply chain. Read more of this post

China Mobile Brands Boosts Wistron to FIH as Sony Falters; “China’s home brands are getting stronger and grabbing market share from traditional global brands that used to outsource assembly”

China Mobile Brands Boosts Wistron to FIH as Sony Falters

As Nokia Oyj (NOK1V) and Sony Corp. (6758) stumble, the companies that supply their factories have suffered. Now, those suppliers are finding relief from a new quarter: Chinese brands with growing appeal to domestic buyers. Five of the top six mobile-phone brands in China — the world’s largest handset market — are domestic. Only Samsung Electronics Co. (005930) still outsells them, while Apple Inc. (AAPL) dropped to seventh place in the second quarter and neither Nokia nor Sony was in the top 10, according to researcher Canalys. Read more of this post

China’s Top-Down Take on Innovation; State-Run Model Is Limiting, Some Chinese Economists Say

September 29, 2013, 4:18 p.m. ET

China’s Top-Down Take on Innovation

State-Run Model Is Limiting, Some Chinese Economists Say



BEIJING—To understand why China has such a tough time producing world-class innovations, take a look at how the Chinese play games. Ping pong tables are everywhere in public spaces and open to all comers, from kids to agile retirees, producing a reservoir of talent that has made China a ping pong innovator and champion. By contrast, basketball courts in China are generally locked up. Entrance is controlled by the state—in this case, school officials—shrinking the talent pool and the chance for youngsters to hone their moves. The result: basketball mediocrity. Read more of this post

Xi Jinping hopes traditional faiths can fill moral void in China

Xi Jinping hopes traditional faiths can fill moral void in China: sources

5:30pm EDT

By Benjamin Kang Lim and Ben Blanchard

BEIJING (Reuters) – President Xi Jinping believes China is losing its moral compass and he wants the ruling Communist Party to be more tolerant of traditional faiths in the hope these will help fill a vacuum created by the country’s breakneck growth and rush to get rich, sources said. Xi, who grew up in Mao’s puritan China, is troubled by what he sees as the country’s moral decline and obsession with money, said three independent sources with ties to the leadership. Read more of this post

Global banks cautious on Shanghai free-trade zone

September 29, 2013 4:44 pm

Global banks cautious on Shanghai free-trade zone

By Simon Rabinovitch in Shanghai

Overseas banks have given Shanghai’s much-hyped free-trade zone a chilly reception – Sunday’s launch included just two branches of non-Chinese institutions. The slow start for the zone contrasts with the high expectations for its future, with analysts saying it could herald the most ambitious push for financial reforms in China in more than a decade. The Chinese government has declared that it wants to use the zone – a small 28 sq km sliver of Shanghai – as a test bed for policies from interest rate liberalisation to capital account opening. Read more of this post

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