Bamboo Innovator Daily Insight: 7 Mar (Sat) – Ryan Holiday: Find canvases for other people to paint on

Life

  • 9 successful people share the toughest lessons they learned at their first jobs; Ryan Holiday: Find canvases for other people to paint on. James Altucher: Don’t dwell on failure and its supposed benefits – there are none. BI
  • ‘Calvin and Hobbes’: America’s Most Profound Comic Strip; The hilarity of ‘Calvin and Hobbes’ was rooted in a 6-year-old boy’s inability to control himself—or the world: WSJ
  • ‘Calvin and Hobbes’ creator Bill Watterson returns to the comics page — to offer a few ‘Pearls’ gems: WaPo
  • The best strategy is to be good at whatever it is you do: JohnKay
  • Heng: Bold changes needed in education to nurture Singaporeans who are inventive, resilient and caring, to go beyond learning for grades and “learn for mastery”: TODAY
  • How anxiety affects your decision-making skills: Fastco
  • Shakespeare got his psychology right: Low status can make us more altruistic; The “high-status” students were more focused on displaying their own competence and knowledge. WSJ
  • The Founding Fathers of American Invention: WSJ
  • From TV to Twitter, star scientist Neil deGrasse Tyson continues his quest to educate the world about the universe: WSJ
  • Ancient Automatons, Modern Worries; Despite Stephen Hawking’s warnings about artificial intelligence, robots have been around since the ancient Greeks: WSJ
  • Andreas Jacobs, scion of one of Germany’s leading business families and now, chairman of French business school Insead, shares his experiences.: BT
  • U.S. Authorities Struggle to Find a Pattern Among Aspiring Islamic State Members: WSJ
  • Making professional accountancy cool: Star
  • Don’t get routed like REA Group’s founders: positive ways to postpone raising capital: BRW
  • The secret to talent management? Put employees, not employers first: Fortune
  • Hardly anyone realizes the classic board game Monopoly started as an early feminist’s attack on capitalism: BI
  • Accountancy: the new buzz; ‘The value of bees’ service to the British economy was estimated at £200m – the value of what they pollinate closer to £1bn’: FT

Books

  • Overwhelmed: How to Work, Love, and Play When No One Has the Time; How to Find More Time: New research suggests our concept of time is malleable – and some simple strategies could make us feel like we have more of it: Amazon, NYT

Research & Investing Process

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Noble’s Iceberg Rebuttal Gets Few Prizes for Transparency: WS
  • Be alert to whether or not the directors are buying shares just to show the flag. When companies are known to be in trouble, a cluster of the directors buy a few shares to try to reassure the market that all is well: Telegraph
  • Are Corporate Spin-Offs Prone to Insider Trading? Regulatory blind spots letting insiders profit from spin-offs, says study; one in eight US corporate spin-offs since 1996 were preceded by suspicious options market trading: SSRN, Bloomber

Greater China

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Albert Edwards’ Latest Worry, The Chinese Liquidity Tourniquet: VW
  • ‘China likely to end up as a former would-be superpower’, says Goldman partner who called Japan’s demise: Bloomberg\
  • Chinese steelmakers face headwinds of slowing growth, glut in capacity: Reuters
  • China’s Stock Connect Falls Short on Bets Against Shares; Industry officials say short selling rules make it impossible to bet against stocks: WSJ
  • The Coming Chinese Crack-Up: The endgame of communist rule in China has begun, and Xi Jinping’s ruthless measures are only bringing the country closer to a breaking point: WSJ

Japan & Korea

  • Time for Japan to Cut Off Sharp: Bloomberg
  • President Kazuhiro Tsuga explains how he pulled the company back from the brink and set it on a path to profitability. Fortune

ASEAN

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Further rupiah slip could be ‘dangerous’; This is because many businesspeople, including those in the export-oriented industry, will see their costs skyrocket because of the high import content in their manufactured goods: JP
  • Indonesia’s Bridestory Secures Funding in a Round Led By Rocket Internet Group: JG
  • Thai temple’s lift-off triggers clash over monks and money: FT

Macro

  • Lord Rothschild Warns Investors: “Geopolitical Situation Most Dangerous Since WWII”: Zerohedge
  • Hedge funds: sheep in wolves’ clothing: AW
  • Individual Stocks vs. Index Funds: The Next Frontier; Some firms, including Wealthfront, suggest buying the individual stocks in an index to take advantage of tax-loss selling: WSJ
  • Hedge Funds Monetizing By Selling Stakes To Institutional Investors: VW
  • Why Political Dynasties Rule in America’s Democracy: JG
  • The history and future of Asian bond markets: Nation
  • Only mass default will end the world’s addiction to debt: FP
  • How banks may have rigged the Bank of England scheme built to keep them alive: Telegraph

Energy & Commodities

  • An Oil Firm That Raised Money Seven Months Ago Just Missed Its First Bond Payment: Bloomberg
  • Layoffs and empty streets as Australia’s boom towns go bust: Reuters

TMT

  • The New Tech-Stock Temptation: WSJ
  • The Apple Watch’s beautiful face is also its fatal flaw: WaPo
  • How the Apple Watch will transform the most successful store strategy in a generation: WaPo
  • At long last, Dow gets a taste for Apple: Reuters
  • Go Mobile or Bust: Google Schools Firms on the Business Benefits of Apps: JG
  • Here’s why fraudsters love Apple Pay: Fortune
  • Silicon Valley debate on self-driving cars: do you need a map?: Reuters

Healthcare

  • Biotech Bidding War Yields Rich Price; AbbVie to pay $21 billion for Pharmacyclics, reflecting promise of cancer drug: WSJ
  • These Investors Think There’s a Biotech Bubble That’s About to Burst: Bloomberg
  • Complexities of Eye Care Drive Strong Moats: Morningstar

Consumer & Others

  • Why America fell out of love with golf: WaPo
  • Supermarkets’ brave new world; Derided as a haven for duopolies, Australia is in fact enjoying a price war in the crucial $88 billion food and grocery industry. TheAge
  • Why Can’t Reebok Get Fit?: Bloomberg

Bamboo Innovator Daily Insight: 6 Mar (Fri) – Warren Buffett: ‘I Consider Myself a Journalist’; The Hidden Co-Founder

Life

  • Warren Buffett: ‘I Consider Myself a Journalist’: Bloomberg
  • The Hidden Co-Founder: Techcrunch
  • Don’t Be Like Buffett. Be Like You: Bloomberg
  • Scientists discovered the personality trait that creative geniuses often share; why artists need such solitude: BI
  • Here’s how to properly shake hands in 14 different countries: BI
  • It takes the typical self-made millionaire at least 32 years to get rich; The romanticized notion of getting rich quick always finds an eager audience. BI
  • Reid Hoffman’s Two Rules for Strategy Decisions: HBR
  • Warren Buffett’s 50th annual missive to his company’s shareholders obfuscates rather than illuminates: Economist
  • The Innovation Game: Adobe’s New Strides To Keep Employees Engaged: Forbes
  • Brain evolution and disease: A Faustian bargain; Could the key to the evolution of the human brain be found in a dreadful illness?: Economist
  • The quantified serf: Management by goal-setting is making a comeback, its flaws supposedly fixed: Economist
  • Shake Shack’s Secret Sauce? It Cares. Strategy&
  • The Ottoman Empire: Heading towards disaster; How a multinational Muslim empire was destroyed by the first world war: Economist
  • Blackwell’s David Prescott weathers the storm in a bookshop; Chief executive would still recommend trade to his children: FT
  • Profile: Mikhail Fridman — from rugs to riches; the Russian billionaire, who has earned a reputation as a fierce corporate fighter, is taking on the UK government: FT
  • Suharto’s Favorite Tycoon; Liem Sioe Liong’s business empire survived some of the most turbulent moments of 20th-century Indonesian history. WSJ
  • Are Asian family companies leaders in innovation?: SCMP
  • Economists’ Biggest Failure: Bloomberg
  • Does the Social Safety Net Make Us Lazy? Or Promote Greater Entrepreneurship?: Bloomberg
  • The Little-Known $15 Billion Empire Of Africa’s Richest Man: Forbes
  • Is chief information officer a dead end on the path towards becoming CEO? Richard Umbers joined a small club of CIOs who’ve been elevated to the CEO role after Myer revealed its supply chain and information boss would replace the incumbent: TheAge

Investing Process

Greater China

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Exchange questions Hanergy as speculative bubble grows: SCMP
  • 3 Chinese companies in debt defaults in 2014: SCMP
  • E-Commerce Giants, Gov’t Create New Markets in China’s Rural Areas: Caixin
  • Alibaba Expanding E-Commerce Hurts Department Store Bonds: Bloomberg
  • A Reform Test for Beijing: Will the Communist Party back state or private enterprises?: WSJ
  • China Said to Tax Past Capital Gains by International Funds: Bloomberg
  • Chinese Premier Li Keqiang lays out flaws in country’s economic model: FT
  • China on Long, Slow Road to Reform; New budget underscores preference for strong hand of the state over the marketplace: WSJ
  • Amazon Opens Store Inside Alibaba’s Tmall In China: WSJ
  • Hanergy chairman tightlipped on shares swings – but vows to launch solar-powered cars: SCMP
  • China securities regulator gears up to allow unprofitable firms to go public; First draft of a revised securities law scraps profit requirement on companies seeking IPOs: SCMP
  • Li Pledges to Raze Graft ‘Breeding Grounds’: Bloomberg
  • Chinese Lawmakers Hide Cigarettes and Alcohol as Xi Clamps Down: Bloomberg

Japan & Korea

  • Sony total-vision headset will be reality in 2016: JT
  • Addressing inequality, Japanese-style: PS
  • Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt: Zerohedge

ASEAN

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • 1MDB sheds light, explains RM2bil debt,eyes listing; Malaysia’s 1MDB to be dismantled under debt plan: Star, Reuter
  • Indonesia Makes Play for Infrastructure Funding; Government pours cash into state firms; investors are doubtful: WSJ

Macro

  • Insider Trading Investigators Have a Blind Spot: Bloomberg
  • Foreign Tax Surprises Like Disney’s Have SEC Seeking Sunlight: Bloomberg
  • Global banks: A world of pain; The giants of global finance are in trouble: Economist
  • Nobody knows anything: Pension funds and endowments tend to rely on consultants to select fund managers. This is a mistake: Economist
  • Shades of grey still colour equity trading; Renewed risk-on, risk-off approach to markets could be a warning sign: FT
  • The ageing of EMs: service sector to the rescue? FT
  • China and India need to make their growth numbers add up; Many politely accept the official line but those with money on the line do not: FT
  • Stress tests for banks are a predictable act of public theatre; Once again the bankers are gaming the system by working out what regulators will do: FT
  • FCA takes aim at structured products after finding that investors significantly overestimated the returns they were likely to receive. FT
  • Ports Gridlock Reshapes the Supply Chain; More cargo is being shifted away from congested West Coast trade routes: WSJ
  • Currency warriors rise again: SCMP
  • The Biggest Banks Aren’t Ready to Shrink; New rules give big banks an incentive to shrink their balance sheets. But for most, massiveness remains part of the business plan: Bloomberg
  • We Tried to Re-Create JPMorgan’s Mutual Fund Returns and Gave Up; The bank’s impressive mutual-fund-group performance figures come with little explanation: Bloomberg
  • Citigroup Lost $800 Million on Holding in Turkey’s Akbank: Bloomberg
  • Is JPMorgan Fabricating Its Mutual Fund Returns?: Zerohedge

TMT

  • Googledome, or temple of doom? Tech firms are building pharaonic head offices again: Economist
  • The curse of the top dog: Apple’s low price-earnings ratio reflects understandable scepticism: Economist
  • E-commerce in South-East Asia: Home-field advantage; The global online-shopping giants may not find it easy to conquer the region: Economist
  • 3D printing: Entering the jet age; Aircraft engines may soon be built one layer at a time: Economist
  • Apple Pay Stung by Low-Tech Fraudsters; Transactions involved credit-card data stolen in retailer breaches: WSJ
  • This Venture Capitalist Says We Have Entered a Tech Bubble: Bloomberg
  • Apple Watch is competing as a fashion accessory, and that’s a risky move: WaPo
  • Apple’s rivals hope its Watch will boost their own wearable tech: Reuters
  • For the ‘unbanked’, mobile money still has some way to go: Reuters
  • The new ‘Horsemen of the Nasdaq’ – how long will they ride?: Reuters
  • Mark Cuban Warns: This Bubble Is Far Worse Than The Tech Bubble Of 2000: Zerohedge

Energy & Commodities

  • Australian mining slowdown hits Aggreko: FT
  • Oil Bust Threatens CMBS in Wall Street Funded Shale Towns: Bloomberg
  • Will Tesla Ever Make Money? Sure, Elon Musk makes great cars, but investors are wondering when his company will turn a profit. Bloomberg

Healthcare

  • Many in U.S. live too far from advanced stroke care: Reuters
  • Biotech Bidding War Yields Rich Price; AbbVie to pay $21 billion for Pharmacyclics, reflecting promise of cancer drug: WSJ
  • Inside the $21 Billion War for a Blockbuster Cancer Drug: Bloomberg

Consumer & Others

  • Outsiders Tried but Failed to Make It Big in Furniture; General Mills, Masco and S&H Green Stamps creator flopped or gave up when profits proved slim: WSJ
  • U.S. Furniture Survivor Tries to Go Global; As family-owned Ashley outgrows the McMansion, it turns its sights on Asia: WSJ
  • Coca-Cola Makes Over Look of Cans to Shake Calorie Stigma: Bloomberg
  • Lego Seeks a Little Help From Elf Friends to Reignite Franchise: Bloomberg

Bamboo Innovator Daily Insight: 5 Mar (Thurs) – How to follow in Warren Buffett’s big footsteps: It boils down to three precepts: be patient, be private and be peculiar

Life 

  • How to follow in Warren Buffett’s big footsteps: It boils down to three precepts: be patient, be private and be peculiar: FT
  • Warren Buffett’s Two Tips on Building Successful Businesses – Pass Them Along: Forbes
  • Tech adoption at the top: analogue dogs need digital masters; how executives can reboot themselves and their companies: FT
  • When good greed goes bad and what to do about it; Money and status are strong motivators that can be destructive: FT
  • Olam CEO Sunny Verghese Says Short Sellers Have Role in Markets; Attacks on companies acceptable if made with ‘integrity’, says Verghese: WSJ
  • Y Combinator’s Sam Altman On The Elements Of A Successful Startup: Techcrunch
  • Day traders: “The chances they’ll end up a winner is less than the parts in a warehouse spontaneously assembling themselves into a beautiful girl.”: DailySpeculation
  • The East India Company: The original corporate raiders: Guardian
  • How the Kochs Wasted a Fortune: Bloomberg

Investing Process

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Changjiang Fertilizer chairman’s leave of absence prompts queries; Firm ‘unable to take a view’ whether chairman’s ‘personal matters’ will affect his character and integrity as a director: BT
  • 21 inspiring quotes about markets and investing chosen by a top economist: BI
  • How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge: Bloomberg
  • Revenue recognition: New differences emerging: JOA
  • The $62bn deferred tax secret of Warren Buffett’s success: FT

Greater China

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Chinese state media suggests retired general Guo Boxiong may be next to fall, after son comes under graft probe: SCMP
  • China Rongsheng Suspends Warrant Issue as Investor Detained: Bloomberg
  • Running after unpaid debts in China becoming difficult – Coface: SCMP
  • Shanghai’s Free-Trade Zone Fails to Impress U.S. Companies: WSJ
  • Foxconn Launches New E-Commerce Platform in China: WSJ
  • Hanergy’s Li Hejun leaps to top of Forbes’ Chinese rich list: FT
  • Noble with an iron helm: Communist Party’s buzzword du jour: WCT
  • China’s Factories Are Building a Robot Nation: Caixin
  • Liquidity evaporates in China as ‘fiscal cliff’ nears: Telegraph
  • How Alibaba’s U.S. IPO Got the Company Ordered Out of Taiwan: Bloomberg
  • China Loses Millionaires as Wealthiest Tempted Overseas: Bloomberg
  • Macau Crackdown Brings Windfall for Casinos From South Korea to Cambodia: Bloomberg

India

  • Biocon founder is India’s fourth-richest woman: FT
  • Dilip Shanghvi overtakes Mukesh Ambani as richest Indian: Moneycontrol
  • Modi Gives Last Chance for India Tax Evaders in $2 Trillion Hunt: Bloomberg
  • In Mumbai, Eating That Steak Could Cost 5 Years in Jail: Bloomberg

Japan & Korea

  • Samsung: Ring the changes: The South Korean group hopes the Galaxy S6 will help revitalise its fortunes as it shifts focus to the ‘internet of things’: FT
  • Robots Take Tokyo as High-Frequency Equity Infiltration Hits 70%: Bloomberg

ASEAN

  • Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?”: AsianExtractor
  • Foreign Portfolio Investors Lose Faith in Indonesia’s Ability to Support the Rupiah: JG
  • Astro wins a stunning reversal in legal battle with Lippo in HK: ST

Macro

  • Tax havens linked to more than 40,000 London property; The secrecy surrounding foreign owners of high-value London properties has long given rise to suspicions of hidden corruption and money-laundering. FT
  • Foreign companies registered in offshore tax havens like the British Virgin Islands own 36,342 buildings in London that could be used for illegal purposes, a report by Transparency International said: NYT
  • Watchdog’s Hunt Is Short on ‘Wolves’; Finra program hasn’t barred any brokers tied to Stratton Oakmont from ‘Wolf of Wall Street’ fame: WSJ
  • EQT is considering a sale of Classic Fine Foods, a Singapore-based importer and food distributor, in a US$300 million deal, joining the list of private-equity firms looking to exit investments in Asia in recent months: WSJ
  • Stratfor has 11 alarming predictions for the next decade: BI
  • The Fed’s magic tricks will not make risk disappear; Capital requirements are like rabbits pulled out of a hat, writes Frank Partnoy: FT
  • Shipping industry faces shake up as private equity unwinds bets: Reuters
  • Asia’s Cities Offer Glimpse of Heaven and Hell: Barron’s
  • Petrobras Fallout Says One Good Thing About Brazil: Bloomberg
  • ‘Almost all our wealth is in real estate’: Rising interest rates could devastate couple’s retirement: FP
  • The real cost of a $1 million home: Toronto buyers resort to sub-prime loans as prices soar: FP
  • This Fed Official Just Perfectly Described Why Student Loans Are a Terrible Investment: Bloomberg
  • Buybacks at $46 Billion a Month Dwarf Everything in U.S. Market: Bloomberg
  • Are bookkeepers the next financial planners?: TheAge
  • Negative Rates Test Technology at European Banks; Headaches emerge from Sweden to Spain; a snag for floating-rate debt: WSJ

TMT

  • Internet of Vehicles market expected to expand rapidly: WCT
  • Old carmakers: we won’t be mere platforms for Google and Apple: BRW
  • Solution to Nausea Puts Virtual Reality Closer to Market: NYT
  • What Is the Next “Next Silicon Valley”?: NYT
  • In Chase of Apple, Smartphone Makers Shift Strategies: NYT
  • Google+, a Disappointment With a Purpose: WSJ
  • Online Crafts Marketplace Etsy Files for IPO: WSJ
  • Car Makers Embrace Wireless Phone Charging; Audi, GM, and Toyota see mobile power-ups as a way to attract technology-savvy buyers: WSJ
  • Taylor Swift, Trademarks and Music’s New Branding Model: K@W

Healthcare

  • Cholesterol-Cutting Statins Found to Raise Diabetes Risk by 46%: Bloomberg

Energy & Commodities

  • Jeff Immelt’s Overhaul of GE Impeded by Falling Oil Prices; CEO’s rebuilding of General Electric still hasn’t satisfied many investors, and now there’s this oil business: WSJ
  • Petrodollar Mercantilism Explained In One Chart: Zerohedge

Consumer & Others

  • The secretive snack company that Warren Buffett loves; Now that the world’s top investor has confessed his love for Utz, America’s largest privately-held snack maker is letting the secrets of its success out of the bag. Fortune
  • Reebok’s Pump Is Back; Even though it never really went away: Bloomberg
  • The secretive snack company that Warren Buffett loves; Now that the world’s top investor has confessed his love for Utz, America’s largest privately-held snack maker is letting the secrets of its success out of the bag. Fortune

Bamboo Innovator Daily Insight: 4 Mar (Wed) – Almost Half of Global Audits Have Problems; How Warren Buffett Does It: Going from “cigar butt” investing to the greatest conglomerate ever in 50 years.

Life

  • How Warren Buffett Does It: Going from “cigar butt” investing to the greatest conglomerate ever in 50 years. NYT
  • Almost Half of Global Audits Have Problems: WSJ
  • Most Internal Fraud Still Swept Under the Rug: CFO
  • UK auditors finding innovative ways to increase audit report transparency, says FRC: CGMA
  • The 2 unexpected traits of all great leaders: BI
  • Why Mark Zuckerberg thinks everyone can learn something from Pixar: BI
  • For Many Decisions, Just Go With the Flow; Letting your mind wander to a choice that you feel drawn to — rather than laboriously weighing all the options — is more than ample for many decisions. MIT
  • Competition at the digital edge: ‘Hyperscale’ businesses; Digitization is giving rise to a new form, with a scale and complexity that challenge managerial conventions. McKinsey
  • Patent trolls: Why no one likes them; Abuse of the patent system benefits neither inventors nor the economy at large: Economist
  • The long, unnerving history of the head transplant; Moral concerns are as great a barrier as surgical problems: FT
  • Business starts at school in this golden age for young founders; Helping children to master the art of assessing risk is vital: FT
  • A route to profit in the middle market; UK’s supermarkets show the key to success is to match a business’s position to its capabilities: FT
  • How a former high school math teacher earned $1 million teaching online coding courses: BI
  • English language skills helped me build my business: Alibaba CEO: ChinaPost

Greater China

  • Inside Alibaba, the Sharp-Elbowed World of Chinese E-Commerce: WSJ
  • Germany’s Siemens said it was investigating a media report that it boosted sales figures of its healthcare equipment in China by creating fake contracts: Reuters
  • China state-owned firms’ overseas assets are not audited: Xinhua: Reuters
  • China Shadow-Bank Risks Prompt Push for Insurer Buffers: Bloomberg
  • Snack brands bemoan lack of customer loyalty in China: WCT
  • China’s Debt Binge Spawns Asset-Backed Bond Boom: Credit Markets: Bloomberg
  • Billionaire Lawmakers Ensure the Rich Are Represented in China’s Legislature: NYT
  • Look Who’s Not Coming to China’s Party:  Business Leaders Sidelined by Graft: Bloomberg

India

  • India Seeks Trading Halts to Enable $11 Billion of Asset Sales: Bloomberg
  • Narendra Modi takes tough stance on Indians hiding ‘black money’: FT
  • Paper Boat bases future on India’s drinks nostalgia: Economist
  • India: if you can make it there . . .: FT
  • India’s Newest Billionaire, Subhash Runwal, Built A Property Empire From Nothing: Forbes

Japan & Korea

  • Lotte Group has been reported to be the sloppiest in disclosures among the country’s major conglomerates ― it was often late in disclosing important changes in management, and sometimes even omitted them. KT
  • Shin Dong-bin strives to shine through expansion; Following 8.1 trillion won merger spree, Lotte heir-apparent seeks father’s nod for succession: KH
  • Korea’s tough anti-graft bill passes Assembly: AsiaOne
  • South Korea Looks to Telemedicine for Economic Cure: WSJ

ASEAN

  • Hedge Funds Cry Foul Over Indonesian Debt Workout of PT Bakrie Telecom; they can’t vote on the workout arrangements because their defaulted notes were issued by an offshore special-purpose vehicle: Bloomberg
  • Rising Singapore interest rates sting mortgage borrowers: AsiaOne
  • Why Graft Is Declining In The Notoriously Corrupt Philippines: Forbes
  • Jokowi Puts Indonesia On Long Road To Growth: Barrons

Macro

  • Exchanges in Asia Seek to Counter China Stock Tie-Up: WSJ
  • World’s biggest banks still €300bn short of safe assets, says regulator: FT

TMT

  • Boom and Bust: Fab.com’s Fire Sale Is a Cautionary Tale: WSJ
  • A Mutual Fund That Fell to Earth After the Nasdaq Peak in 2000; SEC charged that the fund founders and Nevis Capital Management had violated the antifraud and reporting provisions of federal securities laws in using shares obtained in in IPOs to pump up the fund’s returns: WSJ
  • Peter Thiel: Google’s lucrative search monopoly may be about to end: BI
  • Fraud Starts to Take a Bite Out of Apple Pay: WSJ

Energy & Commodities

  • The Price of Oil Is About to Blow a Hole in Corporate Accounting: Bloomberg

Healthcare

  • The Next Marketing Frontier: Your Medical Records; Startup’s electronic-patient records alert doctors when vaccines are needed, with a nudge from Merck: WSJ

Consumer & Others

  • Finmeccanica: Growing by shrinking; Italy’s giant defence contractor takes an important step in its restructuring: Economist

Bamboo Innovator Daily Insight: 3 Mar (Tues) – Regaining Resilience: 7 Methods To Become Mentally Stronger; Buy-and-hold fund prospers with no new bets in 80 years

Life

  • Regaining Resilience: 7 Methods To Become Mentally Stronger: Forbes
  • Dig up knowledge of bamboo for healing: JP
  • The Power of Magical Thinking; David Copperfield on the Enemies of Art; Artists do something zealots can’t stand: They break down divisions between people: NYT
  • Be the leader your people don’t walk out on: Forbes
  • 14 books by mega-succesful CEOs that will teach you how to run the world: BI
  • Why Warren Buffett Is Worth $72 Billion and You’re Not: NYT
  • Michael Jordan is a billionaire: BI
  • The secretive Cargill family has 14 billionaires thanks to an agricultural empire – more than any other clan on earth: BI
  • Meet The Richest Billionaire In Every Country: Forbes
  • From Bedouin To Billionaire: How Mohed Altrad Became Europe’s Scaffolding King: Forbes
  • How Many Of The World’s Richest Billionaires Are Still Entrepreneurs? Forbes
  • Disclosure Can Produce Meaningful Change: NYT
  • Why half of all new executives fail can be narrowed down to 4 reasons: BI
  • Teach First is a rival and finishing school for business: FT
  • Storytelling In The Digital Media Age: Techcrunch
  • Adam Tepper, founder and chief executive of the bitcoin exchange company Independent Reserve, has died after a motorcycle accident in Thailand. He was 34.: JG
  • Fiat Agnelli Family to Tighten Grip on Ferrari After Spinoff: Bloomberg
  • What Buffett’s anti-banker rant might have been about; The canny investor writes for multiple audiences-including heads of acquisition targets. Fortune
  • Companies Drag Feet on Updating Fraud Safeguards; Some feel no urgency to adopt new standards, even after clock runs out on old ones: WSJ
  • Get Creative at Your Desk With a Little Playtime; New York University researchers explore how manipulating everyday objects may spark new ideas: WSJ
  • The growing anti-science movement is making people in Silicon Valley nervous: BI

Books

  • How to Win Every Argument: The Use and Abuse of Logic: Amazon, FT

Investing Process

  • Buy-and-hold fund prospers with no new bets in 80 years: Reuters

China

  • Inside the Sharp-Elbowed World of Chinese E-Commerce; Merchants use fake orders, shell storefronts to gain prominence on Alibaba’s marketplaces: WSJ
  • China Anticorruption Campaign Targets Party ‘Cliques’; As legislature meets, Beijing’s antigraft campaign cracks down on political factions: WSJ
  • Corruption Crackdown Costs – Macau Casino Revenues Collapse “Shockingly Bad” 53%: Zerohedge
  • China graft purge targets military elite: FT
  • Chinese Rushing to Buy Property for Portugal Visas Get Burned: Bloomberg
  • Is Chinese QE Next?: Bloomberg

India

  • Mumbai Mulls China-Like Skyscrapers in Makeover: Bloomberg

Japan & Korea

  • Pension funds overpower Kuroda’s misfiring bazooka: FT

ASEAN

  • Indonesia’s Blue Bird Targets New Growth: Noni Purnomo: Forbes
  • BI, President Try to Assuage Fears Over Rapidly Weakening Rupiah: JG
  • Indonesia to Regulate E-Commerce; Online transactions in Indonesia are expected to top $3 billion this year: JG

Macro

  • Who’s fooling whom in haven asset hunt? FT
  • Who will bear losses when banks go wrong? ‘Bail-in’ framework will put investors at risk but much remains unclear: FT
  • Public outrage is the perfect stick to prod HSBC into break-up: FT
  • Etihad Airways’ Rapid Growth Frustrates Rivals; How Etihad runs and is financed is central in a fight with airlines in the United States, which accuse Persian Gulf carriers of stealing passengers. NYT
  • Immigrants and baby boomers are fuelling the rise of the entrepreneur: Telegraph
  • It’s time to investigate fund managers: Guardian
  • A Small-Cap Idea With Little to Recommend It; The SEC’s plan to create special exchanges sounds like a solution in search of a problem. WSJ

TMT

  • IBM Corp was sued by a shareholder that said it committed securities fraud by failing to write down a money-losing semiconductor unit before agreeing to pay another company $1.5 billion to take that unit off its hands. Reuters
  • Could IBM’s brain-inspired chip change the way computers are built? WaPo
  • I’m addicted to Amazon’s new 1-hour delivery service: BI
  • How Apple can overcome dropping iTunes revenue: BI
  • What would the Dow look like if it included Apple?: Reuters
  • Mobile industry tiptoes towards 5G: Reuters
  • Finnish Papermakers Embrace Online World as 10-Year Slump Ends: Bloomberg

Healthcare

  • A Fast Track to Treatment for Stroke Patients; Video-conferencing, mobile robots and virtual neurologists help limit damage: WSJ

Consumer & Others

  • How Hungry-Man’s supersized frozen meals are defying every industry trend: BI
  • McDonald’s needs to make 3 changes to compete with Chipotle: BI

The Machine Behind “Mass Flourishing” and the Artisan Revolution

 “Bamboo Innovators bend, not break, even in the most terrifying storm that would snap the mighty resisting oak tree. It survives, therefore it conquers.”
BAMBOO LETTER UPDATE | March 2, 2015
Bamboo Innovator Insight (Issue 71)

  • The weekly insight is a teaser into the opportunities – and pitfalls! – in the Asian capital jungles.
  • Get The Moat Report Asia – a monthly in-depth presentation report of around 30-40 pages covering the business model of the company, why it has a wide moat and why the moat may continue to widen, a special section on “Inside the Leader’s Mind” to understand their thinking process in building up the business, the context – why now (certain corporate or industry events or groundbreaking news), valuations (why it can compound 2-3x in the next 5 years), potential risks and how it is part of the systematic process in the Bamboo Innovator Index of 200+ companies out of 15,000+ in the Asia ex-Japan universe.
  • Our paid Members from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing.
Dear FriendsCan You Guess This Asian Wide-Moat Company?

The Machine Behind “Mass Flourishing” and the Artisan Revolution

When China’s Premier Li Keqiang was in Africa in May 2014, he gave away a particular machine to the African people as a gift to highlight the global competitiveness of China products and to promote the ‘Love Made-in-China Product’ idea. After his trip, he was told that they were made by a hidden wide-moat champion from another Asian country. Out of the 11 million units sold worldwide every year, 3.3 million are manufactured by this Bamboo Innovator in 2014, or nearly 1 out of 3 machines, tripled from 1 million units in FY2005.

Li was partly inspired by a book called “Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change”, that innovation comes from the grass roots rather than top-down planning laboratories, so everyone can contribute; and that innovation contributes to personal growth – or “self-development,” as Li phrases it. Interestingly, this product is behind the handicraft revolution enabled by Etsy, the fifth most-visited website in the U.S., after Amazon, eBay, Walmart and Best Buy. Etsy is said to be planning to raise $300m in an IPO this year, the biggest IPO to come out of New York since 1999. An article last week talks about a lady who is said to have sold $80,000 worth of merchandise on Etsy and earning about $65,000 a month: “I really wanted to be able to sell the products and make a few extra dollars for dance lessons for my children. I would have been thrilled to make $100 to $200 a month to pay for my daughter’s dance lessons. I’ve tasted loss and felt what it does to you personally. Second chances are so much more appreciated.” Etsy is part of a rising trend of companies that enable the freelance economy. Like Uber, AirBnB, these companies allow people to do what used to be full-time work as part-time gigs, or to strike out on their own instead of working for an established company. It gives more choice to consumers while enabling people in need of cash to easily pick up extra work. Etsy is part of the maker movement led by housewives and avid DIY crafters.

Our latest monthly Moat Report Asia for March 2015 examines an Asian company that was established in 1968 and is now the world’s largest ODM (Original Design Manufacturer) in the machine behind this mass flourishing and the handicraft revolution with a 30% global market share. This company has focused on this product for the past 40-plus years and does not carry major non-core investments on its balance sheet.

There are over 400-500 different precision engineering parts that go inside this product, which is far more than the 25-30 parts that are needed to make a modern smartphone. Just one malfunctioning part, or if the parts do not coordinate with one another, and the entire product would have to be discarded. Thus, the complexity in manufacturing and coordinating hundreds of parts in the machine can result in production challenges, working capital and inventory management problems, delivery delay, and lost clients. The company designs and makes 40-50% of the machine parts in-house, while most of its peers purchased the parts.

The company recognized early on the importance of R&D in order to quickly launch new models and products for its clients who require speed-to-market in introducing new designs for the end consumers. Because the company proactively proposed the designs, they have control and power over the backbone system and structure in the hundreds of internal parts inside the machine. This is crucial because it translates into tangible procurement and cost advantages. As the company’s Chairman Mr. L puts it: “Only when you have R&D capabilities can your road be wider in the long competitive journey. This is our secret to why we enjoy a powerful cost advantage over our rivals that they find very hard to replicate!”

As a result of its vertical integration strategy and R&D capabilities, the company has consistently the highest ROA, ROE, profit margin and working capital efficiency in the industry despite rising cost pressures and the volatile cycle. ROA at 13.2% and ROE at 18.9% is significantly higher than its rivals. Its inventory management is also very impressive at only 36 days (vs peers’ 60-90 days), an extraordinary feat given that there are 400-500 parts to manage.

The company has demonstrated remarkable resiliency in winning in industry crisis over the past 47 years, forging formidable competitive advantages in scale, product quality, R&D design capabilities. In each industry crisis and consolidation phase, the company is able to emerge as a winner and continue onward its growth path in a traditional, boring industry that is experiencing resurgence with the handicraft revolution.

Valuation is also decent and reasonably cheap for a world-class company at PE 12.1x, EV/EBIT 9.6x and EV/EBITDA 8.2x. Its short-term downside is protected by its healthy net cash balance sheet and an attractive 5.3% dividend yield. With the handicraft revolution enabled by Etsy-like online marketplace, as well as growth in demand in emerging markets in China, Russia and ASEAN, Latam, EBITDA and net profit could potentially double, pointing towards a 120-180% growth in market value to $720-900m based on a modest EV/EBITDA 12-15x.

We are most impressed by the company’s corporate culture. Led by Mr. L, the corporate culture has been a nurturing one towards cultivating continuous R&D innovations and the philosophy of owner-operator mindset at every level of the company:

Q: “After all these years, what is the one thing or one event that is the most memorable or touches your heart the most?”

Mr. L: “I am most touched by the dedication of our employees towards the company. During the natural disaster in.., [our factory site] was in the catastrophic zone.. Yet, our employees continue to come to work, with the collective understanding and commitment that ‘if we receive orders, we have the responsibility to deliver them’. With courage and tears, [Company’s name] overcame the challenges and managed to stand up once again. I was appointed the Chairman in 2002 and I put greater emphasis on human capital development, from training to career advancement opportunities and performance-based compensation. I actively promoted the philosophy of owner-operator mindset at every level of the company, that ‘[Company’s name] belongs to everyone’, to continue the spirit that touches my heart during the disaster. As we rebuilt the buildings and factory that were destroyed, we have cultivated a revolutionary feeling.”

We think this is rare in Asian firms and the company deserves a valuation premium.

Who is Mr. L and this wide-moat Bamboo Innovator?

PS: We are very honored to be able to invite Mr. Hemant Amin, Founder, Chairman and CEO of Asiamin Capital, a successful single family office, and Founder and Chairman of the BRKets investor group (www.brkets.com) to be the guest speaker on March 17 (Tuesday) at 5.30pm till 7pm. Mr. Jarrod Baker, the Senior Managing Director at NYSE-listed forensic specialist FTI Consulting Inc (NYSE: FCN, MV $1.5bn), was our previous guest speaker and his presentation materials are available here. Hemant will be talking about accounting fraud in Asia with actual Indian cases from his wealth of experience in investing in Asia and India, where he is an early investor in Narayana Murthy’s Infosys which compounded over 60-folds for him: http://www.beyondproxy.com/grey-world/. KB will be moderating in the second half of Hemant’s session which will be in the dialogue-style.  We will be making this exclusive content available for our Moat Report Asia subscribers only.

Warm regards,

KB

The Moat Report Asia

www.moatreport.com

http://accountancy.smu.edu.sg/faculty/profile/108141/KEE-Koon-Boon

A new monthly issue of The Moat Report Asia is now available!

Access the in-depth idea presentation:

http://www.moatreport.com/members/

Bamboo Innovator Daily Insight: 2 Mar (Mon) – Vincent van Gogh on Why Never Learning How to Paint Helped Him; The Secret to Love Is Just Kindness

Berkshire Hathaway 50th Anniversary Special

  • Charlie Munger: These Four Factors Explain Why Berkshire Hathaway Has Done So Well; Charlie Munger’s Warren Buffett Tell-All: Bloomberg1, Bloomberg2
  • Buffett Embarrassed by ‘Thumb-Sucking’ on Exit of Tesco Stake: Bloomberg
  • Buffett Sets Stage for Massive Buyback, Dividends After Decade: Bloomberg
  • Buffett in the ’70s Was the King of Cool: Bloomberg
  • Life After Buffett: Understanding Succession at Berkshire: NYT
  • Berkshire Hathaway’s Willingness to Kill: ReformedBroker
  • A Dozen Things Taught by Warren Buffett in his 50th Anniversary Letter that will Benefit Ordinary Investors: 25iq
  • Warren Buffett on Heinz: Oh yeah!: Fortune
  • A Two-Man Race Is On to Succeed Buffett at Berkshire: WSJ

Life

  • Vincent van Gogh on Why Never Learning How to Paint Helped Him: Farnam
  • The Secret to Love Is Just Kindness: Science says lasting relationships come down to-you guessed it-kindness and generosity: Atlantic
  • Why powerful people are rarely punished appropriately: Fortune
  • Ben Horowitz: The Struggle: Farnam
  • What A Rembrandt Can Teach you about Software and Programmers: Farnam
  • An Insider Explains Why the FTC Can’t Put an End to Pyramid Schemes: Bloomberg
  • Why shy teachers like shy students; Teachers prefer pupils who share their personality: WaPo
  • The evening routines of the most successful people: FastCo
  • The Wolfe Of Main Street: How An American Picker Built His Empire Out Of Trash; The host of History Channel’s hit show has turned a fascination with old stuff into a growing brand. FastCo
  • Turning pricing power into profit; Companies often overlook pricing as a driver of earnings growth, instead defaulting to cost cutting and other measures. Here are five steps to growth through pricing: McKinsey
  • Long-term corporate survivors know how to adjust, innovate: JA
  • Saudi Travel Tycoon Becomes Billionaire With Pilgrimage Packages: Bloomberg
  • Relying on others – where does the buck stop? Good governance is everyone’s responsibility in a company; reliance on others is an essential process for decision-making by the board. BT

Investing Process

  • Noble’s shock Q4 loss: Why no warning?: BT
  • Embattled education company Vocation crashes to $273m loss, audit problems flagged: SMH
  • The Genesis Of Smart Beta Investing: VW, RA

Greater China

  • China says refuses to give funds for ‘untruthful’ budget proposals: Reuters
  • New World Development names Adrian Cheng as vice-chairman; in line to succeed his father: SCMP
  • Netflix eyes entering tricky China market on its own: Reuters
  • Alibaba and JD Online take fresh approach to China food shopping: FT
  • Crackdown targets China’s ‘zombie’ firms: WCT
  • Japanese toilet seats flush away China-made rivals: WCT
  • China’s Long Food Chain Plugs In; The country’s sprawling supply chain has challenged governmental efforts to ensure quality, and so its tech giants are working to provide shoppers with useful tools. NYT
  • Macau Fortunes Go From Bad to Worse as New Year Gamblers Vanish: Bloomberg
  • China’s bursting coal bubble raises fear of stranded assets: Telegraph
  • Unattractive returns a challenge for China PPPs; Partnerships face difficulty in luring private capital to ease local governments’ debt burden: SCMP
  • China says to implement drug distribution reforms: Reuters
  • Documentary on Air Pollution Grips China: NYT

India

  • My govt’s only religion is ‘India first’: Modi: AsiaOne

ASEAN

  • Investors and brokers want Singapore Exchange stripped of regulatory powers: SCMP
  • Vietnam opens door to hard money and soft power: FT
  • Temasek Faces New Normal With Singapore Eying Its Funds: Bloomberg
  • The road to riches isn’t just paved with keys of condos: BT
  • Tupperware’s Sweet Spot Shifts to Indonesia: NYT
  • Malaysia Fund’s Debts Make Defending Ringgit Tougher: Bloomberg
  • Activist monk seeks Buddhism overhaul in Thailand over corruption fears: Reuters

Macro

  • Regulators Zero in On Audits of Related Parties; The subject of related parties continues to be a focal point of regulators and government prosecutors seeking to bring civil or criminal legal actions. CFO
  • SEC alleges that the senior managing director of Archipel Capital ran a “Ponzi-like” scheme that it says targeted people who wanted to buy pre-IPO shares of Twitter Inc. and Uber Inc: WSJ
  • Activist investors’ success owes much to wider bull run: FT
  • Sheltering Whistleblowers; The SEC is investigating any attempts by companies to muzzle would-be whistleblowers, including requiring them to forgo Dodd-Frank bounties. CFO
  • Stock markets: where have the good times gone?: FT
  • Activist Funds: From Zero To $100B Plus AUM In 20 Years: VW

TMT

  • HTC Wanders Into Virtual-Reality Gear: WSJ
  • How to Keep the Middleman Out of the Internet: II

孙楠《永远不回头》: 再大的风雨我和你也要向前冲 忧伤和寂寞 感动和快乐 都在我心中 永远不回头 不管路有多长 黑暗试探我 烈火燃烧我 都要去接受 永远不回头

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李健 《尘缘》: 一身憔悴在风里 漫漫长路 起伏不能由我 人海漂泊 尝尽人情淡薄 热情热心 换冷淡冷漠 任多少真情独向寂寞 只有桂花香暗飘过

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韩红 《故乡的云》: 那故乡的风和故乡的云 为我抚平创伤

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Bamboo Innovator Daily Insight: 1 Mar (Sun) – Warren Buffett Chronicles 50 Years At Berkshire Hathaway

Berkshire Hathaway 50th Anniversary Special

  • Warren Buffett Releases Monster 43-Page Half-Century Letter To Berkshire Faithful: Zerohedge, PDF
  • Warren Buffett Chronicles 50 Years At Berkshire Hathaway: Forbes
  • Grading Berkshire after 50 years under Buffett: How does a 1,826,163% stock rise sound? Fortune
  • Warren Buffett: My $100 billion blunder; In 1964, I made ‘a monumentally stupid decision’: BIFortune
  • Warren Buffett’s annual zingers: Here are the 2015 letter’s best one-liners: Fortune
  • Berkshire Hathaway’s Vice Chairman Offers Hint of Warren Buffett Successor; Ajit Jain or Greg Abel could be candidates, Charles Munger suggests: WSJ
  • Warren Buffett on his successor: We have our man: Fortune
  • Buffett Deputy Jain Turned Tiny Company Into a Behemoth; Greg Abel: an Astute Deal Maker Who Shuns the Spotlight: WSJ1, WSJ2
  • Warren Buffett is endorsing one of the hottest startups on the planet; “Those people on a tight budget should check the Airbnb website.”: BI
  • Warren Buffett defends Berkshire’s conglomerate structure — and fires a huge shot at private equity: BI
  • After 50 years, Warren Buffett is suddenly shifting his target metric: Quartz, AA
  • Warren Buffett Says Berkshire Hathaway Can Withstand His Eventual Departure: WSJ
  • 50 Years of Berkshire Annual Letters: Here are Some Highlights: WSJ

Life

  • ‘How Do I…?’ Is Not The Question — ‘What’s Stopping Me?’ Is: Forbes
  • Why London is better to follow ancient Athens than Sparta: Telegraph
  • When Exponential Progress Becomes Reality: Medium
  • Virginia Woolf on Writing and Self-Doubt: BP
  • Mozart on Creativity and the Ideation Process: BP
  • The Unity of Dread and Bliss: Rilke on How Our Fear of the Unexplainable Robs Us of Joy: BP

Books

  • This Idea Must Die: Scientific Theories That Are Blocking Progress; This Idea Must Die: Some of the World’s Greatest Thinkers Each Select a Major Misconception Holding Us Back: Amazon,  BP

Greater China

  • Three Private Shipping Companies Run into Financial Troubles; Expert blames problems besetting several firms on overcapacity and weaker demand for commodities: caixin
  • Beijing’s Zhongguancun e-World digital square, once China’s largest retail electronics market, becomes outdated, closes: WCT
  • China advisory body ousts former top Hu Jintao aide LIng Jihua: Reuters
  • GM CFO: China Will Dominate the Luxury Car Market: WSJ

Macro

  • America’s trading desks are imploding: Quartz

Healthcare

  • Study on Chronic Fatigue May Help With Diagnoses: NYT

TMT

  • Here is Amazon’s audacious plan to go way beyond drones: Fortune
  • How Apple lost $533 million to an 8th-grade dropout patent troll: Fortune
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