Monday, January 14, 2013

Oddly Relevant Jan-14-2013


How did Lenovo become the world’s biggest computer company? Bleeding red ink in 2008 and choking on the IBM’s PC business, Lenovo leapfrogged thanks to (1) cutting 1/10 of workforce, (2) protecting 2 huge profit centers—corporate PC sales and China market—while attacking new markets with new products, (3) going premium with a vast distribution network and a stellar in-house manufacturing team. [Note: Thinkpad X1 Carbon is stellar indeed]…Source: http://www.economist.com/news/business/21569398-how-did-lenovo-become-worlds-biggest-computer-company-guard-shack-global-giant

13 battery startups to watch in 2013: 3 noteworthy ones: Ambri founded by MIT professor and with Bill Gates as investor—with molten salt sandwiched between 2 layers of liquid metal, 1.5 years from commercialization. Alveo Energy—a batter out of water, Prussian blue dye, iron, and copper; and Preito Battery—lithium ion battery that charges in 5 min and lasts 5x longer than standard. [Note: what’s the energy cost of making one?]…Source: http://gigaom.com/2013/01/14/13-battery-startups-to-watch-in-2013/

How important is manufacturing to emerging markets? Answer: quite important as their shares move up, but for many it is already shrinking as shares of GDP thanks to (1) expansion of service and (2) spill-over of more sophisticated manufacturing. Source: http://blogs.ft.com/beyond-brics/2013/01/14/chart-of-the-week-how-important-is-manufacturing-to-emerging-markets/#axzz2I0eIztVp

TIPS is riskfree as long as the government doesn’t change the index: The price of an asset calculated based on an index set by the government. Do you smell anything wrong with that? As Ben Lord at M&G puts it:

“To eradicate the wedge altogether would be tantamount to an event of default, especially if this is specifically to eradicate the structural difference between the two indices! We bought these securities on the basis that we would be paid RPI, which we know changes in terms of items and weightings on an annual basis, but according to changes in spending habits rather than Government policy. That’s fine! But the index is based on an arithmetic mean and always has been, and so will (almost always!) be higher than an index calculated according to a geometrically calculated mean. To change this, willingly and knowingly, with the purpose of reducing future outgoings of index-linked borrowing cashflows feels very similar to the altering of the War Loan’s coupon from 5% to 3.5% in 1932, or to the Greek PSI exercise of coercive write-downs, neither of which, arguably, were ‘defaults’.”


How can we see less crime with less punishment? Via dynamic concentration: instead of letting punishment occur by chance, the enforcer goes after the crime committer in specific order which, by guaranteeing punishment on the frontal few and deterring them, in turns deter the latter and consequently all potential suspects. [Note: Clever, what if crime committers collude?]…Source: http://www.farnamstreetblog.com/2013/01/how-can-we-have-less-crime-with-less-punishment-when-brute-force-fails/


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