A letter a day!

A letter a day!

Letter#16 Dec’2012

1.In today’s information-soaked world there may be stock market professionals who would argue that constant data collection is the job. Indeed, it could be tempting to conclude that today there is so much data to collect and so much change to observe that we hardly have time to think at all.

“Whilst Zak and I applaud John Kearnon, we try to take Charles Darwin’s approach: de-emphasise the data collection and think. When we study truly great businesses, we find that very often it has been simple human attributes that have led to their success: you feel differently drinking a Coke than a no brand cola or, you may feel differently towards a business that consistently undercuts the competition in price or, a delivery service that literally goes the extra mile and picks up returned items – and the reason you have these feelings, and the stimuli that produce them, have hardly changed in millennia. When we try to understand the factors that made great businesses great, in our opinion, there is lots of time to think.”

2.Comparision of information with food

Information does not always have food-like quality standards. There is little-to-no labelling of information presented on television, so fact and fiction can be deliberately fused and have given rise to “docudramas” and “mocumentaries”.To avoid confusion, one solution may be to label information for its fact content, in the same way we label food for its fat content.

“And what of the implications of over-consuming? Clay Shirky, the writer and internet consultant, claimed that “there is no such animal as information overload, only filter failure” which, using Rangaswami’s analogy, implies we need to think about data diets and information exercise to prevent the buildup of toxins and disease. “When I saw [Morgan Spurlock’s documentary film] ‘Super-Size Me’” joked Rangaswami in a recent speech “I started thinking, now what would happen if an individual had thirty- one days nonstop Fox News?” What, indeed?”

3.Information, like food, has a sell by date, after all, next quarter’s earnings are worthless after next quarter.

“The information that Zak and I weigh most heavily in thinking about a firm is that which has the longest shelf life, with the highest weighting going to information that is almost axiomatic: it is, in our opinion, the most valuable information. No doubt Charles Darwin would agree.”