Category: Food for thought

Pallava Bagla describing how ISRO manages to keep the costs low.

At the moment, he says, India uses small rocket launchers because they don’t have anything stronger. But that means India’s spacecraft take much longer to reach their destination.

So, when Chandrayaan-3 was launched, it orbited the Earth several times before it was sling-shot into the lunar orbit, where it went around the Moon a few times before landing. On the other hand, Russia’s Luna-25 escaped the Earth’s gravity quickly riding a powerful Soyuz rocket.

“We used Mother Earth’s gravity to nudge us to the Moon. It took us weeks and a lot of resourceful planning. Isro has mastered this and done it successfully so many times.”

— Why it costs India so little to reach the Moon and Mars

Let’s say you’re a student and you use ChatGPT to write your essays for you. Give it the right prompts and it will produce pieces that are good enough to get the grade you need. That seems like a win: it saves you time and effort, presuming your tutors don’t notice or don’t care. Maybe you get through the whole of university this way. But be wary of this equilibrium. Over the longer term, you will be stunting the growth of your own mind. The struggle of turning inchoate thought into readable sentences and paragraphs is a powerful exercise for the brain. It’s how you get better at thinking. It is thinking.

— The Good Enough Trap

So if I want higher returns, now this is where it flips away from being me and it’s no longer my characteristic, but I do want higher returns for higher risk, then you choose which instrument has actually given you those higher risk. And I think by and large, this has become a function of size and manager affluence. So the size question would be that as you grow bigger and bigger in size, the number of companies that you can buy into in India becomes smaller and smaller.

So now the biggest Indian mutual fund is nearly 80,000 crores.

Oh, they hit 80,000 crores?

70 plus thousand crores. So at that rate, at the 80,000 crore rate, even if I have 100 companies, I don’t think he has 100 companies, he has 50 or 60 companies. But you’re still buying more, nearly a thousand crores per company.

Now the number of companies that you can afford to buy a thousand crores for is now countable in the total number of companies you actually have. The 100th company in India today has a 1 lakh crore market cap. That means if you bought 100 companies with a thousand crores each then the 100th company you would own 1% off.

So effectively, you’re owning more and more percentage of… So what this happens is you just have to spread yourself too thin. You can’t meaningfully take large bets.

And until Indian market cap of Indian companies reaches a much higher degree, you’re limited by the growth of… The size of the mutual fund is greater than the growth of market cap of all the companies. So in the sense that that becomes your limiting factor.

— Capitalmind Podcast: Mutual Funds, PMS, or AIF: Choosing the Right Investment Vehicle for Your Needs

Wow!

Every forecast takes a number from today and multiplies it by a story about tomorrow.

— A Number From Today and A Story About Tomorrow

But impacts of climate change are different — they are non-linear. In a rain event, for example, the first few inches of rain typically produce no damage because existing infrastructure (e.g., storm drains) were designed to handle that much rain.

As rainfall continues to intensify, however, it eventually exceeds the capacity of the storm runoff infrastructure and the neighborhood floods. You go from zero damage if the water stops half an inch below the front door of your house to tens of thousands of dollars of damage if the water rises one additional inch and flows into your house.

Thus, the correct mental model is not one of impacts slowly getting worse over decades. Rather, the correct way to understand climate change is that things are fine until they’re not, at which point they’re really terrible. And the system can go from “fine” to “terrible” in the blink of an eye.

Why are climate impacts escalating so quickly?

A wonderful post on why do we want more money.

When you’re poor, your desire for more money stems from a need to survive. When you’re wealthy, your desire for more money stems from a need for status, because you are surrounded by other status seekers.

…

In the absence of strong convictions about what you want from life, you will always default to wanting more money.

Why Don’t We Do What We Want?

A wonderful analysis on long term investing across 15-year period starting 1995. Below is my favourite paragraph. Why? It emphasises how uncertain long term equity returns are.

Imagine being the investor who started in 1995. Seeing your portfolio exceed 1 Cr (₹ 10 Million) in January 2008, 14 years into your investing journey, only to see it plummet 60% to 40L (₹ 4 Million) late in 2008 before finally coming back to 89L (₹ 8.9 Million) by the end of 2009.

The 12% Myth: Estimating Long-Term Equity Returns

I always had trouble with planning my finances for the future which always changed or simply wasn’t clear to me. This article presents that conundrum in a beautiful way.

Most of us are monks about some things and hedonists about others. Unless we’re tangled up in thinking we need to impress others with our possessions.

The Monk or Hedonist question is hard because what impressed you then might not impress you now. And what you appreciate now, you did not back then. This holds for the future too. So, how do you conclude what you will want in a decade or more?

Plan less, Live More