I just checked. Seems to be working fine.
Posts in category Value Pickr
All E Technologies, making businesses ready for AI (03-07-2024)
- The company hosts conf call, and most importantly declares results every quarter despite not being required to.
- I went through all the conf calls. The management clearly understands the business, and is sincere about it. They do not try to upsell, or create frenzy. They have downplayed role of AI as of now in their current offerings, and correctly so. Anybody who is in this field would understand that creating wrappers around AI would not be a viable scalable solution. For services industry, they still need to carry out research, and develop viable business cases for their existing customers first, and figure out how they can convert this technology into scalable revenue generation machine.
- The financials look clean, unless there are some skeletons which are hidden from annual reports.
- Company has an esop policy which is very very important, especially for firms which are there for the long haul.
- While it may be frustrating that acquisition is not taking place despite 95+ crores of cash on balance sheet, I would rather even wait for 2 years than to just acquire for the sake of acquiring and then not being able to integrate it properly.
- Relatively good rating by employees on Glassdoor for a company of this size.
- No foolish mandates such as return to office. The employees can work from home completely if they wish to. To retain existing tech talent, or invite new tech talent, this is one of the most important parameters. This exposes them to talent outside of Noida, and to the likes of techies who would want their freedom to be whereever they want to be. This also shows that organization does not believe in micromanagement and can manage to achieve desired results with ample amount of freedom on offer.
Disc : Invested since March 2023
Ambika Cotton Mills (03-07-2024)
when we see the trend of cotton inventory ( value) to turn over, it is around 30% ( max 40%) range over reasonably long period, it is almost 64% now. So it is reasonably clear that they are speculating with cotton prices. Moreover , In one AGM, Mr.Chandran himself spoke that he favours converting cash into cotton inventory rather than holding it in bank FDS…Plus when you see past annual reports of Ambika, there are good number on instances in which they have gains on inventory sales, which show that they have speculated earlier …Holding stocks for production is fine , but holding stocks for speculation is a double edged sword…If lucky, it shall benefit, otherwise , it may backfire…Lets hope Mr.Chandran and Ambika share holders are lucky …
Multi-Disciplinary Reading – Book Reviews (03-07-2024)
Magic Pill, Johann Hari, 2024 - This was a very useful book to understand GLP-1 agonists, diabetes, obesity, the biological, psychological, economic and cultural reasons that cause it. The author meets researchers, scientists who worked on GLP-1 drugs, amongst others to view the drugs, the need for it and how it affects the people who take it from multiple perspectives. Can easily place this alongside books like Gut, The Obesity Code and The Dorito effect from recent memory.
A lot of what’s in the book is peripheral to GLP-1 drugs but it is very important to understand the ecosystem as a whole to understand what unique circumstances gave birth to the drug and what might in the future kill the need for it.
My notes -
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People who use GLP-1 drugs (semaglutide - ozempic, wegovy; liraglutide - victoza, saxenda, tirzepatide - mounjaro, zepbound) lose between 5 to 24% of their body weight
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Within 10 years, 20-30% of the population will be on obesity drugs. Market size could be as big as $200b. Novo Nordisk the Danish corp that manufactures Sema and Lira currently is the most valuable company in Europe
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Ozempic’s iconic status as a blockbuster drug is on par with the contraceptive pill and prozac
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Obesity contributes to 200 known diseases and complications. Obesity was nearly unknown phenomenon. Today 26% of Britain and 43% of US are obese (tripled globally since ‘75) - mainly due to our food system, our relationship with food and our bodies
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One death is a tragedy, a million deaths is just a statistic - Stalin
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As a child, the author ate lot of junk and processed food but gained weight only in his late teens.
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Skinny fat is more harmful than uniformly distributed fat - high likelihood of diabetes and high BP
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Day 1 of Ozempic - the author feels mildly nauseous with no appetite. Tried eating but felt full after 4 bites. Lunch felt salty though the same lunch never felt like that before. Slept at 9 pm. It made food not disgusting but oddly unfeasible as a proposition (like someone brought you food after you finished a meal)
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Ozempic works by manipulating a tiny hormone called GLP-1 that exists in our gut and brain
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The scientist who discovered GLP-1 was working on glucagon gene produced in the pancreas - the chain found at the end of its genetic code is GLP-1. GLP-1 hormone when mixed with cells that produced insulin increased insulin production - it worked in rat’s pancreases and then in a pig and finally, a human
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GLP-1 also spikes in our gut after we eat making us feel full - GLP-1 when injected, worked just as well but since its present in the gut only for a short period, it worked very briefly and needed multiple injections to the gut
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The venom of Gila monster (lizard found in Arizona, New Mexico) had similar genetic code of GLP-1 and crucially, it was longer lasting - longer GLP-1 stays in your body, the more insulin the body makes. This helped drug companies make better copies of GLP-1 - the new ‘agonists’ could stay in the body for a whole week before breaking down
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First GLP-1 was approved for use in diabetes in 2005 (Exenatide - same family as Liraglutide)
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Novo Nordisk’s Ozempic (Semaglutide) was approved for Obesity in 2021. In 68 weeks, it led to 15% reduction in body weight - it was marketed as Wegovy for weight loss which could be prescribed at higher doses (Ozempic originally approved for diabetes in 2017). Both are once a week subcutaneous injections (Taken through a self-administered pen-like device)
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Most people on Ozempic/Wegovy regained 2/3rds of the weight lost within a year of stopping the drug
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Eli Lilly’s Mounjaro simulated not just GLP-1 but also GIP. People on Mounjaro lost 21% of their body weight (against Ozempic/Wegovy’s 15%). They also have another drug in development called ‘Triple G’ that simulates GLP-1, GIP and Glucagon - 24.2% weight loss. There are now over 70 anti-obesity drugs under development
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Food, beverages and snacking categories are most impacted since Ozempic - Krispy Kreme, Nestle’s frozen food, confectionary and ice creams, even alcohol markets have taken a hit
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Author went from 32% body fat to 22% body fat on Ozempic in 6 months
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Dosage for weight-loss drugs starts low and goes up - 0.25mg a week for a month, 0.5mg after that and a month later 1mg (or even higher) - nausea increases every time. Some of them have higher resting heart rate and feel light-headed or dizzy (from low calorie intake)
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Brain interprets the extreme satiety signalled by the GLP-1 agonists as sickness and hence the nausea. Drug companies are adding the hormone amylin to reduce nausea (under trials)
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Author was raised on a diet of new industrialised food by his mother and grandmother who mistook these to be nutritious and enjoyed the convenience of not having to cook a meal. Author’s father though was a chef and was confused by the utter lack of curiosity people in knowing where their food came from - as if it were electricity or clothes and so didn’t matter (that in essence sums up what went wrong in the last 50 yrs)
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Stuffing - paying no attention to food and piling it in with no attention to food or its flavour (as against savouring)
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Pump food full of sugar and fat, it reduces bacterial growth and adding salt, it lasts on shelves longer (hence industrial food is the way it is)
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Flavouring agents, food coloring dyes, glazing agents, acids, emulsifiers, releasing agents, antioxidants, thickeners, bleaching agents, sweeteners, chelators - industrial food is manufactured rather than cooked
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Cheapest nuggets are made of liquified chicken and emulsifier - similar to ‘pink slime’ that makes up minced beef items (hence these are cheap). Rats fed on these energy dense foods refuse to eat real food in experiments (they would rather not eat at all) - even fear of an electric shock wouldn’t deter them from their cheesecake
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Whole foods make you feel sated - steak, potatoes, fresh fruit, fish vs processed foods - biscuits, boxed cereals, cakes, flavoured yoghurts, croissants - you want more with no satiety
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Most processed food is ‘adult baby food’ - since you chew less, the delay it takes to signal satiety gets messed up. Chewing is a necessary brake to overeating.
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The carb-rich processed foods cause spikes and crashes in glucose causing you to feel hungry soon, unlike protein and fibre rich whole foods which stay longer. It is also easier to consume sugary beverages which are calorie bombs (2000 cals in a single driven even)
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Artificial sweeteners cause rats to gain weight - when brain gets tricked by the sweetness but doesn’t get calorie intake, it triggers more hunger
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Gut microbiome needs diverse food sources to stay healthy. Most processed foods only have wheat, corn, soy and meat - affects health of your gut
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Author’s friend on Mounjaro - lost 50 pounds and doc cut his BP pills, gout pills and statins by half and was likely to do another halving after that (demand for lot of these staple generics could be hit too, alongside junk food and alcohol, hip and knee replacement surgeries etc)
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Gluttony is one of the seven deadly sins - we think people who are fat thus deserve the punishment of exercise and can’t take the easy way out. Most cultures have some form of this. No different from women who would not be given painkillers because suffering was integral part of child-birth as god designed it
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Concern-trolling - where you pretend to be concerned about someone’s health so you can in fact, shame and humiliate them
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Insulin manufactured by the body helps glucose get into cell. When body doesn’t produce insulin, its type-1 diabetes but when cells develop resistance to insulin, its type-2 (more prevalent and common). Its the biggest cause of renal dialysis, blindness, leg amputations etc
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Being HIV-positive might be more desirable than living with diabetes - the former when on treatment live just as long as normal people but the latter lose 15 yrs of life on average
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Obese man is 6x more likely to develop diabetes than non-obese man, for obese-women its 12x more likely
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While your heart pumps blood, it also needs its own blood going through it to function. When it doesn’t, it can cramp without getting enough oxygen, like any other muscle. Obesity narrows these blood vessels over time. It also increases blood pressure and also causes plaques to form in blood vessels (atherosclerosis). There’s also high likelihood of stroke and cancer with increase in weight
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Fat cells when stretched beyond limit can cause inflammation - where body’s defence mechanisms are summoned to repair the damage. This causes normal immune system function to be impaired when real damage occurs
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Obesity increases likelihood of developing asthma, sleep apnea, arthritis, kidney problems, fertility issues, gallstones, thrombosis and even dementia (list goes on and on)
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If you are overweight, your risk of dying in the next 10 years goes up 20-40% and if obese, by 200-300%
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After bariatric surgery, 75% of people with diabetes see it vanish completely - so do 60% of ones with hypertension, 66% of those with back pain and change of death from diabetes falls by 92% and of cancer by 60% and coronary disease by 56% (The impact of weight-loss drugs should be comparable to this)
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History of weight-loss drugs 1. Redusols (1934-1938) - banned due to high fevers induced. 2. Amphetamines (post WW-2) - suppressed appetite while giving energy boost - mother’s little helper. 1980 8% of prescription were amphetamines. Addictive and needed higher and higher doses and caused paranoia, psychosis and heart damage 3. Sleeping Beauty (’70s) - you simply slept all day so didn’t have to eat! 4. Fen-phen (90s) - 18 million prescriptions in ‘95. Increased pulmonary hypertension by 30x and caused heart defects in 1/3rd people - drug company had to pay $12b in settlement. (Long history of wonder drugs that fell flat eventually)
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There’s inherent risk in GLP-1 - though safety is established in short-term. Longer-term impact of using it for decades so someone starting on these in their 20s or 30s is not certain (though millions of people have been taking these in the last 2 decades for diabetes)
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Ozempic face/butt - weight loss is so swift, it makes these look like deflated balloons (increasing need for fillers!)
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GLP-1 agonists have receptors in thyroid tissue - there’s an increased risk of developing thyroid cancer by 50-75% (1.2% to 1.8% - so incidence is already low and 84% of them survive)
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GLP-1 agonists increase risk of pancreatitis (remember GLP-1 is naturally produced by the pancreas). While its rare, GLP-1 agonists increase risk 9x (and can be treated). They can also cause stomach paralysis
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GLP-1 receptors also exist in our brains. We actually make GLP-1 in our brains too. It affects appetite and reward centres (hence reduces alcohol consumption too, alongside nicotine, cocaine, heroin and opioids). So taking GLP-1 boosts self-control across the board (and hence can make you feel emotionally dull if you depended on those rewards in the first place)
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People with gambling and compulsive shopping problems and other risk-taking behaviour as well curtailed the same when their reward centres didn’t function
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It is possible that blunting of reward centres could dull the very essence of life and could raise suicidal tendencies (no concrete evidence of anhedonia yet though as most people function normal)
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The way GLP-1 agonists affect brain might be to “reset” levels rather than blunting or turning up the aversion systems. These are not as yet clearly understood. You are not just changing your body also your mind and the very essence of you when on these drugs
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In pregnant rats, structural abnormalities were observed in fetus when on GLP-1 agonists
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31% of women and 19% of men respond to stress by eating in order to feel better (arises from parents comforting child with food, even when not hungry). How parents read and respond to child’s hunger shapes us deeply
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People have a bad relationship with their body because they consider it as separate thing from themselves. The shift from what your body looks like, to what your body is able to do (functional appreciation) is a profoundly healing change (it can walk, lift weights etc.)
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Japan has only 4.5% obese people compared to 26% in UK and 43% in US. Its the only country that got rich without getting fat
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Japanese Hawaiians are almost as fat as Hawaiians - so its not the genes (moved there early 19th and 20th century) so its more to do with what happened to Japanese culture in last 60 years post WW-II than their tradition or heritage (as usually misunderstood)
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Japanese cooking has 65 ingredients on average even compared to classic French style with 20 ingredients - the more diverse your diet, the healthier you get. Japs live on fish and vegetables, not milk and butter and meats.
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Western cooking is primarily adding things to food to make it tasty (butter, lemon, herbs, sauces) but Jap cooking is a minus cuisine (flavour is drawn out from ingredients themselves)
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Japanese cooking, each meal has 5 tastes (sweet, salt, sour, bitter and umami), 5 skills (cutting, simmering, grilling, deep-frying and steaming) and 5 colours (black, white, green, yellow and red). It ensures balance - food is total art, so beautiful plating is important. God lives in the details
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Eating one dish fully before moving on to another is “rude” way of eating. They follow triangle eating - moving from one dish to another - one bite of soup, one bite of the side and so on- ensuring balance of tastes in the mouth. They only eat until 80% full (taught from a very young age and insisted in schools)
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It is a legal requirement in Japan that principal of each school has to have same lunch as kids and has to eat first, to make sure its safe, nutritious and delicious (Taleb would approve)
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Metabo law - Every workplace in Japan has to bring a team of nurses and docs to measure weight and waistline and company has to get them into shape if off (govt. pays for it). Their life expectancy is not a matter of luck or genes
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In the West healthy food is expensive so one option is to tax sugary foods and unhealthy sodas (Mexico does it) and subsidise healthy food
What could happen to GLP-1 drugs in the future? They could go the way of fen-phen (highly unlikely), could lose impact over time (unlikely), could become cheap with generics (currently $1200/month) and prescribed and administered like generic statins (very likely) or we reform the food industrial complex and eat healthy (very unlikely). It would be interesting to see which way this goes over time. 9/10
Karnataka bank – private bank @ public sector valuation (03-07-2024)
Price to book ratio is trading at around 0.85. It is a deep value opportunity or a value trap? any views? New to investing.
Disc. No holding
Sumitomo Chemicals ~ After Excel Crop Care Acquisition (03-07-2024)
That’s neither here nor there, no? I had seen this chart which you posted earlier too. It’s good input and makes one think about it further. Of course, as @Chandragupta pointed out, Sumitomo is a diversified conglomerate. They are not that in India. So it’s not an apples-to-apples comparison.
My question was only about your point that was critical of their innovation capabilities. My reading indicates that is not the case and I wanted to be better informed. But since you haven’t shared specific inputs there, I guess we can leave it here.
Sumitomo Chemicals ~ After Excel Crop Care Acquisition (03-07-2024)
This is what investors in Japan think about the company ( last 22 years performance of stock). Hope it helps to get a prespective as far as parent company is concerned.
Rural Elect Corp (03-07-2024)
We are at the euphoria stage of the market. You and I have discussed this in out convos. Recent price action is completely out of whack with fundamentals.
What is the future, I am no guru to predict.
As regards to REC/ IREDA / PFC, look at loan growth and NPA to determine relative valuation for long term.
for eg: PFC has recently loaned the Shapoorji group some 15k crores for repaying old loans. Does it make sense. Is it part of their mandate.
Similarly, REC has started funding infra projects. Do they have clear understanding of the relative pitfalls. Infra projects in India are almost always delayed. Have they priced the risk.
I hold REC bought at current prices having but am doing so taking into account 15-20% dips and long term holding. If your outlook is shorter, maybe time is to take out profits.
Cineline India – Picture abhi baaki hai (03-07-2024)
Not much movement on the counter. Is there any positive news coming for this stock? Has there been any update on hotel sale/ quicker opening of screens?