Book Review: Swachh Indore

The Book ‘Swachh Indore’ is written by IAS officer P. Narahari who ensured that Indore became the cleanest city of India

Indore is the largest city of Madhya Pradesh with a population of around 21L. As such, it is a real achievement not only to win the ‘cleanest city’ tag but also retain it for many years in a row.

The author explains the journey in the Book in a very simple and dry manner. But one can only marvel at the efforts gone behind this.

The journey started when PM Modi launched the ‘Swach Bharat’ campaign on Oct 02, 2014

The first goal of the team was to make rural Indore -Open Defecation Free (ODF). The author believes that its important to first change the people’s behavior to achieve the desired outcomes. I was astonished to know that the administration identified the areas on the outskirts of villages where villagers used to go to defecate. Then the officers used to land there at 4 am (!), catch them in the act and shame them !

They also built toilets etc so that the villagers have a viable alternative.One marvelous aspect of this was how different segments of society-media,kids, teachers etc were roped in to change the mindset of villagers

After achieving success in rural Indore, the focus shifted to urban Indore.One counter-intuitive step that the authorities took was get rid of public municipal bins. Instead, there was door-door collection of waste which Indoris classified into dry/wet waster.

Some of the additional steps that the authorities took was installing more toilets, more sewage collection vehicles,imposition of penalties etc

The authorities also use the waste to generate bio-CNG,compost manure etc which add to the coffers of the Municipal Corporation.

Another marvelous aspect of this drive was how the authorities changed the mindset of the people.They used mass media, hit songs, entertainment , religious authorities etc. The support of the public at large and politicians in particular is commendable.

Everyone who has visited Indore has visited the famous night food market of Sarafa Bazaar. Any Indian bazaar where thousands flock every night would be typically filthy. But not Indore’s Sarafa Bazaar. It’s strange how even non-Indoris respect the cleanliness and don’t litter.

I would recommend this Book only to those interested in policy


Book Review: The Warren Buffett Portfolio

The Book ‘The Warren Buffett Portfolio’ is written by Robert Hagstorm. Robert had earlier written the book ‘The Warren Buffett Way’ and this book is meant to be a companion book to the earlier book.

The Book is an advocate of “Focus Investing” which can be stated as:

“Choose a few stocks that are likely to produce above average returns over the long haul, concentrate the bulk of your investments in those stocks, and have the fortitude to hold steady during any short-term market gyrations”

The author believes that the only way active managers can beat index funds is if they follow the Focus Investing approach. In India too, we see PMS fund managers having only 5-15 stocks in their model portfolio in order to beat their benchmarks.

The Book attempts to answer the key Questions for a focussed portfolio:

Q. How do I identify these above-average stocks?

A. Standard stuff of top class mgmt, high return ratios,growing market etc etc

Q. How many is few?

A. The author believes 15. There are studies which show that benfits of diversification whither away as no of stocks increase. Charlie Munger once famously said that 3 stocks is good enough diversification !

Q. What do you mean by concentrate?

A. Using the Kelly Formula to position size the portfolio

Q. How long must I hold?

A. In Buffett’s words, the favorite holding period is forever. You hold till economics of the biz deteriorates or there is a much better alternative available.

The Book was written way back in 1999.The author was working for Legg Mason Mutual Fund where the star manager was Bill Miller. The book was probably a disguised plug for the Fund as Bill Miller’s quotes are numerous in the Book.

Bill Miller also practiced this form of Focused investing. He eventually blew up during the 2008 Crash.

This ironically highlights the risks of this kind of investing. If you are very concentrated, then you risk the chances of blowing up your portfolio.

My personal belief is the anti-thesis of this Book. I believe that concentration is the outcome of a good portfolio, not the input. To illustrate, the late Rakesh Jhunjhunwala put in equal amounts of money (a small % of his then portfolio) in Crisil, Titan and Lupin. Of these 3, Titan compounded handsomely to eventually become 40-50% of his listed portfolio.

Meanwhile , our Bill Miller, still not learning from his blow up has now in year 2023, only Amazon and Bitcoin in his portfolio. Looks like he is primed for another blow up !

There are some folks in India who practice focus investing. I categorise them in two types- Buffett devotees who actually do deep dive in the businesses and trading types whose holding periods are less than 6 months.Some folks in the first category have been successful riding stocks like HDFC Bank, Bajaj Finance etc. But I am sceptical if they can repeat their success in the future as it would mean catching lightning twice !

I would recommend this Book to serious investors who wish to learn more about portfolio allocation and sizing.


Book Review: Thinking in Bets

The Book ‘ Thinking in Bets’ is written by Annie Duke, who is a world class poker champion

Most decisions in life are made using incomplete information.Often we use the positive outcome of the decision as superior decision making. The author calls this as ‘resulting’. The key is not to focus on one outcome but on the process/decision tree behind the decision

The Book explains that all decisions are actually bets .Our beliefs and psychological biases determine our bets and sizing of them

The author talks about a Buddy system which can help improve our decision making. She also talks about scepticism and how it can be used for better decision making.

The Book also mentions using scenario planning etc to plan for different scenarios .Backcasting is when you work backward from a positive future and premortem is when you work backward from a negative future.

There is this old (from 1947 !) joke by Ben Graham which is actually the essence of the Book

There is a beautiful little story, that I suppose most of you have heard, about the man
who was the weaker bridge player of the husband-and-wife team. It seems he bid a
grand slam, and at the end he said very triumphantly to his wife, “I saw you making
faces at me all the time, but you notice I not only bid this grand slam but I made it.
What can you say about that?” And his wife replied very dourly, “If you had played
it right you would have lost it.”

I would recommend this Book only to those who didnt understand the joke !


Book Review: Being Relevant

The Book ‘Being Relevant’ is written by the Founder of the Quant Group, Sandeep Tandon. Sandeep is very well known for his stewardship of the Quant Mutual Fund.

This Book was written way back in 2018 when the Quant Group took overs Escorts Mutual Fund. The Book was written to explain the investing beliefs, philosophy and tools to potential investors.

This Book had become very famous and very difficult to get and its only now that I was able to get my paws on it.

The Book is truly a master class on how to approach the markets from a very different and very active investing perspective.

The Quant core belief is that ‘Fundamental is the Atman, Liquidity is the Prana, Sentiments the Maya’. There are multiple proprietary indicators that the Quant group has built and the Book illustrates them richly with charts and data.

The Quant approach to markets is via the VLRT framework- Valuation, Liquidity, Risk Appetite and Time. There are detailed chapters on each one of these aspects.

There are detailed chapters on different asset classes and bold predictions on each. As expected, some predictions have come out to be true now 5 years later and some have not

One prediction which was prescient was “our indicators point to 3.8-4.2% as a critical threshold for US 10-year yields which could be breached decisively in 2023”

One prediction which failed spectacularly was ‘Going long Russian Equity indices & short US equities is our call for the decade’

The author believes in the concept of “Adaptive Alpha” which is very different from the “Buy Right, Sit Tight” approach of most Indian fund managers.

I would strongly recommend this Book to serious investors.


Book Review: Karunanidhi

The Book ‘Karunanidhi-A Life’ is written by veteran journalist A.S. Panneerselvan.

Karunanidhi was the five term CM of Tamil Nadu and one of the most important leaders of modern India.

He was the leader of the Dravida Munnetra Kazhagam (DMK) whose ideology can be characterised as anti-Hindi (pro Tamil), anti-Hindu (pro-atheism), anti-India (pro-Tamil Nadu) and anti-Brahmin (pro-Dalit). Post the 1962 China war, the anti-India stance was dropped.

The Book traces the life and political career of Karunanidhi and is quite fascinating.

Karunanidhi was born in a very poor family but was active in politics since a very young age. Due to his activism, he didnt have much time for studies and flunked the X board exam 3 times. Having flunked the exam thrice, he was barred from giving the exam again ! This left him free to pursue his political and cinematic career.

What astonished me when I read the book was what an intellectual giant Karunanidhi was. In his career, he wrote more than 1.5L pages in print for party magazines, orated for more than 4000 hours and penned more than 70 film scripts.

Another aspect that surprised me was the violence that even a leader like Karunanidhi was subjected to. In Pondicherry , he was once almost beaten to death and in Chennai, some assailants almost succeeded in killing him.

When Karunanidhi started his political career, cinema was just taking off in the country. With the power of his pen, he used cinema as a political medium to raise political consciousness. I think this is a lost art now. He used to pen scripts that conveyed the political message of the day using themes/motifs from Tamil culture/ethos. His scripts help made Sivaji Ganesan and MGR superstars.

The Book traces the ins & outs of Tamil Nadu politics. It can leave the reader quite bewildered. One party can be in opposition to another party in one election and be in alliance with the same party in the next ! So we find the DMK at one point or the other in alliance with Congress, TMC, Swatantra, BJP, CPI, CPM, Muslim League etc

What is also interesting is how frequently the Centre brought down the state govt in Tamil Nadu using Article 356 of the Constitution. The Centre since 1950s have been meddling in TN politics. I was surprised to learn that AIADMK was the creation of the Centre.

The Book covers the relation of Karunanidhi and other state leaders with the LTTE. Till date, rest of India is not aware of the depth of emotion that people of Tamil Nadu have in this matter.

DMK under Karunanidhi was always known for 2 things-administration efficiency and corruption. The term ‘scientific corruption’ was invented to describe Karunanidhi’s rule.

As CM, Karunanidhi took forward the industrialization and progressive social agenda of the state. Unfortunately, corruption charges remained a constant companion throughout.

One issue unexplored and deserving of further study is how a party based on intellectualism and ideology got hijacked by one family.

The author seems to be a card carrying member of the DMK and can see no fault in his beloved leader. Last line of the Book is ‘Karunanidhi embodied and continues to embody the courage for Tamils to pursue their long march towards self-respect’

I would recommend this Book only to students of Indian politics.