Bihar's ‘Strongmen’, China's Future, Dubai's 3D-printed office: 10 interesting things that we read this week

Here are the ten most interesting pieces that we read this week, ended May 27, 2016.

Updated: May 27, 2016 03:01:03 PM UTC

At Ambit we spend a lot of time reading articles that are not directly relevant to Indian stocks. However, since the Indian economy is now umbilically linked to its global counterparts, the articles that we come across have relevance for Indian stocks and the Indian economy. In that context, this report contains the ten most interesting pieces that we read this week.

Here are the ten most interesting pieces that we read this week, ended May 27, 2016.

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Photo: Shutterstock

1)    The return of the ‘Strongmen’ in Bihar? [Source: Business Standard]

Aditi Phadnis writes in this piece that ‘strongman’ (“bahubali” in Hindi) tactics have made a comeback in Bihar. She discusses the case of Mohammad Shahabuddin (or Shahabu Bhaiyya, as he is called in Siwan district in Bihar) who had prospered under the tutelage of Lalu Prasad Yadav (one time Chief Minister of Bihar) and became Prasad's official RJD candidate for the Siwan Lok Sabha seat in 1996. However, when the government changed and Nitish Kumar took over the charge things changed dramatically for him as his home was raided and case after case was slapped on him. Now, as Kumar has made up with Prasad and won an election jointly, Shahabuddin, as per the author, is likely to make a comeback again with Prasad exerting his ‘large than life’ influence again in the government.

2)    What our digital social networks say about us [Source: Financial Times]

In this piece, Professor Robin Dunbar, the Oxford university anthropologist has posited that that our primate brains limit us to meaningful social contact with no more than about 150 people. Based on the strikingly similar sizes of human groupings ranging from Neolithic villages to Roman legions to an average Christmas card list, Professor Dunbar opined that our social attention is not even distributed evenly among those 150 confidantes but instead layered like an onion; five closest contacts in the innermost layer, then 10 in the next, followed by 35 and 100. Given that this limit has held its own through the ages, the author believes that it “should prompt networking sites to refine their services in a digitally promiscuous age”.

3)    How land is acquired can indicate the maturity of a democracy [The Telegraph]

The Supreme Court passed a landmark judgment on May 13, 2016. It returned to the Haryana Urban Development Authority 280 acres of land that had been licensed to Uddar Gaggan Properties Limited by the Haryana Government in 2006. This article describes why this judgement signifies a possible turning point for our country considering similar episodes of the state acting as an intermediary for transfer of property between private hands were common in the US as well. However, the courts there drastically changed their stance by the beginning of the current century, meaning the state cannot use its legal powers to transfer land from one private entity to another unless "public purpose" is somehow associated also with the public ownership of the acquired land. The recent judgment by the Indian Supreme Court, the author believes, suggests that our courts also have started to think in a similar fashion.

4)    Book review: ‘China’s future’ by David Shambaugh [Source: Financial Times]

This review of ‘China’s future’ by David Shambaugh, discusses how Chinese administration’s embrace of “hard authoritarianism” has possibly put it on a path to its own extinction. As per the author, one of the many strengths of Shambaugh’s book is that “it delves below the surface noise surrounding the world’s second-largest economy and focuses on the deeper political trends he has studied for decades.”

5)    The importance of learning how to fail [Source: jonahlehrer.com]

An interesting piece that discusses how our growth as an individual is a function of our mindset. Describing the work of Carol Dweck, professor of psychology at Stanford University, the article deep dives into two different notions of mental ability held by people. The first theory known as the “fixed mindset” holds that intelligence is a fixed quantity, and that each of us is allotted a certain amount of smarts we cannot change. The second theory is known as the “growth mindset”. It’s more optimistic, holding that our intelligence and talents can be developed through hard work and practice. The article also highlights how Carol’s work demonstrated that “children with a fixed mindset tend to wilt in the face of challenges as for them, struggle and failure are a clear sign they aren’t smart enough for the task. Those with a growth mindset, in contrast, respond to difficulty by working harder. Their faith in growth becomes a self-fulfilling prophecy; they get smarter because they believe they can.”

6)    The Siemens Healthineers song is a writhing, spandex clad horror [Source: Financial Times] Text for google: There is not a single example of a business putting its values

Lucy Kellaway is at her best in this piece. The context: In early May, Siemens changed the name of its 120-year-old healthcare division to Siemens Healthineers. The announcement of the same through an on stage song and dance performance is what Lucy believes can be detrimental for the company. She goes on to highlight three basic rules of corporate communications which should not be ignored by companies: The first says large companies must never turn to song. She says whilst this approach may work fine in churches or amongst youngsters, but in corporations, any attempt to impose a system of shared belief is sinister. The second rule is to resist portmanteau names, in which respectable words — in this case health, engineers and pioneers — are cut up and glued together to create something monstrous. The third law says claiming to be one team with one dream doesn’t make you so. It just makes you look stupid.

7)    Too many businesses want a piece of the financial action [Source: Financial Times]
Text for google: US companies today make more than ever before by simply moving money around

Citing examples of companies like Apple which in spite of sitting on almost $200bn cash are borrowing record amounts to buy back shares to bolster stock prices, Rana Foroohar, the author describes how American firms today make more money than ever before by simply moving money around, getting about five times the revenue from purely financial activities, such as trading, hedging, tax optimization and selling financial services. He describe how firms are much more keen to try to please investors by jacking up short-term share prices than to invest in things that will grow a company over the long haul. Giving examples across industries from Airlines to Pharmaceuticals to Silicon Valley, he laments that rather than focusing on their core business proposition, companies are now looking at “creative” ways of financial engineering to bolster their valuations- something that will only hamper their prospects in the long haul.

8)    What the AI behind AlphaGo can teach us about being human [Source: wired.com]

This article begins with a description of one of the ‘crushing’ moves (called Move 37!) made by AlphaGo in his match with world champion, Lee Sedol, a match which eventually helped AlphaGo defeat the human champion by 4-1. The article describes how the team at DeepMind - the company that created AlphaGo trained the machine to make it capable enough to “think”. They did so using the technology called ‘neural networks’ in which millions of possible moves were fed into the machine. The machine, after tapping all the knowledge it had gathered playing many games on its own, could start to predict how a game of Go would probably play out - helping it think of moves far out into the game. The author leaves the reader to ponder whether this development is a threat or an opportunity – given the fact that it was that Move 37 that pushed Lee Sedol to think out of the box and play ‘Move 78’ – the move that cut AlphaGo’s defences in half in game number four and helped Lee win his sole game.

9)    Your next phone might speak on your behalf. But is that a good thing? [Source: TIME]

At Google’s annual I/O developer conference, it gave indications that the company’s technology is going to be pinch hitting for your own personality in the near future. It will become harder to tell where you stop and Google starts. Some examples cited by the article are - Google Home, a voice-controlled speaker powered by the search engine’s smarts. In this button-less future, Google will wake up your kids for you; it will update you on your package statuses and answer almost any other question you might have. A new messaging app, Allo, with ability to scan your texts, understand the context and supply readymade human-like responses for you (“Cute dog!” and “That’s good!”). Not just when you were sent words, but even when you were sent pictures!

10)    World’s first 3D-printed office opens in Dubai [Source: engadget.com]

This piece brings to notice the world's first 3D-printed office building that opened recently in Dubai. The 2,700-square-foot, single-story building was built in just 17 days using a gigantic, 20-foot tall 3D printer and a special mix of concrete, fiber reinforced plastic and glass fiber reinforced gypsum. The piece highlights that although the "printer" was massive at about two stories tall, 120 feet long and 40 feet wide, it only needed one staffer to make sure it was functioning properly. Also, the overall construction and labor costs were half of a comparable structure built with conventional methods. Interestingly, Dubai plans to have 25 percent of the buildings in the emirate built via 3D printing by the year 2030.

- By Saurabh Mukherjea, CEO (Institutional Equities) and Prashant Mittal, Analyst (Strategy and Derivatives), Ambit Capital Pvt Ltd. Views expressed are personal.

The thoughts and opinions shared here are of the author.

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