Views on Life & on Equity Investing

Wonder, Wealth & Abundance

China : What Supply Chain Adjustment?

leave a comment »

No impact for now.

Written by amitdipsite

October 14, 2020 at 3:51 am

Posted in Uncategorized

Trouble raising 3 Million

leave a comment »

7 years later……120,000 Million

img_6340

Reference: https://en.m.wikipedia.org/wiki/Zoom_Video_Communications

Disc: Invested

Written by amitdipsite

October 13, 2020 at 7:47 pm

Posted in Uncategorized

Investigation of Competition in Digital Markets

leave a comment »

Excerpt from the anti trust report:

A year after initiating the investigation (1.3 million documents and seven hearings), we received testimony from the Chief Executive
Officers of the investigated companies: Jeff Bezos, Tim Cook, Mark Zuckerberg, and Sundar Pichai. For nearly six hours, we pressed for answers about their business practices, including about evidence
concerning the extent to which they have exploited, entrenched, and expanded their power over digital markets in anticompetitive and abusive ways. Their answers were often evasive and non-responsive, raising fresh questions about whether they believe they are beyond the reach of democratic oversight.

Although these four corporations differ in important ways, studying their business practices has revealed common problems. First, each platform now serves as a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy. They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them.

the kinds of monopolies we last saw in the era of oil barons and railroad
tycoons. Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price. These firms typically run the marketplace while also competing in it.

Examples of above are, in my own words, Expedia paying Google 5 Billion US$ annual Ad revenues, yet Google competing with Expedia with its own product of booking air tickets and hotels in the search results. Amazon competing with its own private label products and showing them above other products in the results.

As of September 2020, the combined valuation of these platforms is more than $5 trillion—more than a third of the value of the S&P 100. As we continue to shift our work, commerce, and communications online, these firms stand to become even more interwoven into the fabric of our economy and our lives. Over the past decade, the digital economy has become highly concentrated and prone to monopolization. Several markets investigated by the Subcommittee—such as social networking, general online search, and online advertising—are dominated by just one or two firms. The companies investigated by the Subcommittee—Amazon, Apple, Facebook, and Google—have captured control over key channels of distribution and have come to function as gatekeepers. Just a decade into the future, 30% of the world’s gross economic output may lie with these firms, and just a handful of others.

In the overwhelming number of cases, the antitrust agencies did not request additional information and documentary material under their pre-merger review authority in the Clayton Act, to examine whether the proposed acquisition may substantially lessen competition or tend to create a monopoly if allowed to proceed as proposed. For example, of Facebook’s nearly 100 acquisitions, the Federal Trade Commission engaged in an extensive investigation of just one acquisition: Facebook’s purchase of Instagram in 2012.

During the investigation, Subcommittee staff found evidence of monopolization and monopoly power. For example, the strong network effects associated with Facebook has tipped the market toward monopoly such that Facebook competes more vigorously among its own products—Facebook, Instagram, WhatsApp, and Messenger—than with actual competitors.

The word Monopoly was used 120 times in the report. The word Abuse was used 40 times in the report.

Restoring Competition in the Digital Economy

  1. Reduce Conflicts of Interest Thorough Structural Separations and Line of Business Restriction

Subcommittee’s investigation uncovered several ways in which Amazon, Apple, Facebook, and Google use their dominance in one or more markets to advantage their other lines of business, reducing dynamism and innovation.

Google used the Android operating system to closely track usage trends and growth patterns of thirdparty apps—near-perfect market intelligence that Google can use to gain an edge over those same apps. Facebook used its platform tools to identify and then acquire fast-growing third-party apps,
thwarting competitive threats at key moments.

dominant platforms have used their integration to tie products and services in ways that can lock in users and insulate the platform from competition. Google, for example, required that smartphone manufacturers seeking to use Android also pre-install and give default status to certain Google apps—enabling Google to maintain its search monopoly and crowd out opportunities for thirdparty developers.

Example of past Monopoly treatment:

In the railroad industry, for example, a congressional investigation found that the expansion of common carrier railroads’ into the coal market undermined independent coal producers, whose wares the railroads would deprioritize in order to give themselves superior access to markets. In 1893, the Committee on Interstate and Foreign Commerce wrote that “[n]o competition can exist between two producers of a commodity when one of them has the power to prescribe both the price and output of the other.”

Congress subsequently enacted a provision to prohibit railroads from transporting any goods that they had produced or in which they held an interest.

2. Implement Rules to Prevent Discrimination, Favoritism, and Self-Preferencing

Subcommittee identified numerous instances in which dominant platforms engaged in preferential or discriminatory treatment. In some cases, the dominant platform privileged its own products or services. In others, a dominant platform gave preferential treatment to one business partner over others. Because the dominant platform was, in most instances,
the only viable path to market, its discriminatory treatment had the effect of picking winners and losers in the marketplace.

Google, for example, engaged in self-preferencing by systematically ranking its own content above third-party content, even when its content was inferior or less relevant for users.

3. Promote Innovation Through Interoperability and Open Access

As discussed elsewhere in the Report, digital markets have certain characteristics—such as network effects, switching costs, and other entry barriers—that make them prone to tipping in favor of a single dominant firm. As a result, these markets are no longer contestable by new entrants, and the competitive process shifts from “competition in the market to competition for the market.

Facebook is not interoperable with other social networks, its users have high costs to switch to other platforms, locking them into Facebook’s platform.

Since 1998, Amazon, Apple, Facebook, and Google collectively have
purchased more than 500 companies.

The antitrust agencies did not block a single acquisition. In
one instance—Google’s purchase of ITA—the Justice Department required Google to agree to certain terms in a consent decree before proceeding with the transaction.2

Complete 450 Page Report can be downloaded from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf

Written by amitdipsite

October 11, 2020 at 7:20 am

Posted in Uncategorized

Undertaker in Plague

with one comment

This is a first for me, a company that is 100x in 1 Year. Found a Polish company, that on the backdrop of increased demand for its products.

“The Company manufactures medical gloves and distributes disposable medical materials. It produces medical, latex, synthetic, surgical, diagnostic sterile, examination and protective and household gloves. Its dressing products line includes gauze dressing products, non-woven fabric dressing, medical adhesive tapes, surgical dressing, among others. In addition, the Company provides drapes such as bed sheets, sets, as well as apparel, including caps, masks, gowns, among others.”

The 100x stock price came from a 100 fold increase in profit, WOW! It isn’t a microcap any more, now values at 22 times profits at 1.5 Billion US$. As they say, the only person thrilled in plague is the undertaker. Stock up from 5 to 500 in 12 months.

The company is Mercator WA (Poland Stock Exchange)

Written by amitdipsite

October 5, 2020 at 6:10 pm

Posted in Uncategorized

Medical Equipment Companies

leave a comment »

I have noticed that in the EU mid and small companies (and probably should be the same case in North America) that the medical device making companies are trading at 10 – 20 times revenues and 100-200 times earnings, which BTW is cheap compared to 150 times revenues (not earnings) for Snowflake or 120 times revenues for Zoom.

Medical device has been good money spinner in the theme of previous two companies (Intuitive Surgical & Medtronics) found a great wealth creator from the same industry, Danaher Corporation: a 1,000 bagger

https://www.danaher.com/

I find that entertainment industry has much attractive propositions in the video gaming segment now that Cinema/Outdoor entertainment have taken a backseat.

Written by amitdipsite

October 5, 2020 at 11:08 am

Posted in Uncategorized

Robotics

with 2 comments

The first and several 10 Trillion dollar companies are likely to come as I have surmised and shared many times, is from a robotics industry.

At this moment medical robotics are very monopolistic in their own niches. I shared Intuitive Surgical two years ago. https://lifeandequities.wordpress.com/2018/01/20/drawdowns/ I also found Mazor X which is no longer standalone but acquired by Medtronics. Both have been 100 and 10 times 100 (thousand) baggers since the IPO.

The trained base of thousands of surgeons adds to the MOAT and high switching costs.

Short Video Demos of two medical robotics systems.

Written by amitdipsite

September 25, 2020 at 4:37 am

Posted in Uncategorized

Multiple issues with Kotak Bank IT

leave a comment »

You may have noticed today – on the 21st of September 2020 that Kotak Bank is not allowing login to customers for the past several hours. Probably over 10 hours now.

Like they say, problems are like cockroaches…. never one in isolation.

There seem to be 2 very major issues in Kotak Bank IT landscape which I inferred as a layman.

#1 They do not have a business continuity plan. Kotak does not have a Disaster Recovery secondary site to they could switch the traffic to. Big banks have secondary sites that they routinely switch traffic to almost on a monthly basis, so its not a paper pie in the sky exercise to be executed only when the disaster strikes.

#2 The internal details of the software and technologies they use is well leaked out to the world at large. Its a Security 101 violation.

In software, security architecture discipline is meant to protect the organisation, given that the code can be written like wild west by developers, who need not follow defense in depth guidelines, purpose made security testing and intrusive penetration testing is organised during a major release.

See below screenshot which is showing post login:

Kotak is broadcasting to the world that it uses opensource Java Spring Framework (https://spring.io/projects/spring-framework) as one of the technologies and the application code is having difficulty connecting to the Database via (SQL interface) – structured query language using JDBC driver.

This should never be known to the outside world, its one more dot that helps hackers know more about the internals of the software.

Written by amitdipsite

September 21, 2020 at 12:59 pm

Posted in Uncategorized

Quotes

leave a comment »

“The surest sign that intelligent life exists elsewhere in the universe is that it has never tried to contact us.”– Bill Watterso

“By the time a man realizes that his father was right, he has a son who thinks he’s wrong.”– Charles Wadsworth

“If you think you are too small to make a difference, try sleeping with a mosquito.”– Dalai Lama

“Everyone has a purpose in life. Perhaps yours is watching television.”– David Letterman

I asked my North Korean friend how he likes it there, he said he couldn’t complain.

“The duty of a patriot is to protect his country from its government.”– Edward Abbey

“A computer once beat me at chess, but it was no match for me at kick boxing.”– Emo Philips

If life gives you melons you may be having dyslexia.

You cannot be lonely if you like the person you’re alone with.

Written by amitdipsite

September 11, 2020 at 7:24 am

Posted in Uncategorized

Blackrock

with 2 comments

BlackRock, the world’s largest asset manager, with $7.4T AUM (as of Q4-2019) is backing up the truck on #silver. Was the 2nd largest buyer in Q2 2020 purchasing 5.4M shares of $SLV. Smart money going long silver!

Reference: First Majestic

Written by amitdipsite

August 19, 2020 at 7:39 pm

Posted in Uncategorized

Biggest event for Gold in 40 years

leave a comment »

Tiers of Bank Assets

Under the Basel Accord, a bank has to maintain a certain level of cash or liquid assets as a ratio of its risk-weighted assets. The Basel Accords are a series of three sets of banking regulations that help to ensure financial institutions have enough capital on hand to handle obligations. The Accords set the capital adequacy ratio (CAR) to define these holdings for banks. Under Basel III, a bank’s tier 1 and tier 2 assets must be at least 10.5% of its risk-weighted assets. Basel III increased the requirements from 8% under Basel II.

Tier 1 capital is the primary funding source of the bank.

Tier 1 capital consists of shareholders’ equity and retained earnings. 

Tier 2 capital includes revaluation reserves, hybrid capital instruments and subordinated term debt, general loan-loss reserves, and undisclosed reserves.

Tier 2 capital is considered less reliable than Tier 1 capital because it is more difficult to accurately calculate and more difficult to liquidate

Gold Upgraded

The Bank for International Settlements (BIS) is the Central Bank for all Central Banks.  http://www.bis.org  Their rules change behavior at the banks and the current Basel III rules will allow gold to be classified as a tier 1 asset (equal with a cash dollar). Gold was previously classified as a tier 3 asset. It will now be tier 1 (zero risk).  This change has been made since 2020.

Central banks are now understand that their can be run on their currencies. In the past 10 years currencies like Turkish Lira, Venezuala, Zimbabwe have failed or massively depreciated.

US Plan to defend Dollar

Since the US Dollar will eventually fail, the US Government is working on Digital Dollar (Google This!) It is now already tabled in Congress with exigency so as to prevent world from accepting other reserve currencies from taking off.

How this digital dollar will work will be similar to Gold Backed (could be 1/10th of real Gold) since USA has only 8,100 tonnes of Gold worth 60% of the market cap of Apple or 1 Trillion USD of Gold. Additionally to boost confidence, MIT is involved to provide distributed ledger as used by crypto currencies to prevent scam and cooking books to validate the actual gold reserves being backed. Of course, people would prefer some Gold to No Gold if there was a run on currency. But all central Banks will henceforth horde Gold as it’s been classified as Tier 1 Asset from Tier 3.

The race to buy Gold will be between doomsday Gold Bugs, Normal Investors, Jewellery and Bullion Hoarders, Banks , Hedge Funds, Speculators and Central Banks, yet the supply is limited.

Large Soverign Funds and University Endowments are also guaranteed to to lose 1% per year on US Treasuries. Yield 0.7% Inflation 2-3%, with the risk of inflation on upper side. Real interest rate this is negative. One US Dollar of 1913 is now worth 1 cent in Gold Terms in 2020, small inflation adds up. 20 USD bought an ounce of Gold, now you need 2000$.

There can be additional demand for Gold from Sovereign Funds. If Norwegian Sovereign Wealth Fund or Australian Superannuation wanted to diversify into Gold for 1% of their assets which are over 1 Trillion USD, it will cause 10s of billions of dollars pressure on Gold and Silver buying in an already hot market. Therefore 3000$ Gold should be an easy target by next year. Silver would swing more.

Let the games begin.

I understand that Gold is emotional but this emotion is in play for centuries and some recent events (like Crypto and Basel Gold reclassification, and COVID) make it low probability to change the course of events that have been set in motion that make Gold more attractive.

Reference: Investopedia.com

Written by amitdipsite

August 16, 2020 at 4:58 am

Posted in Uncategorized