Linkfest: July 19, 2018

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What I am reading today

3 reasons ad folks should take a more honest look at Facebook (afaqs!: Guest Articles)
Credit score 101 (Subramoney)


E.U. Fines Google $5.1 Billion in Android Antitrust Case (NYT Technology)
Airbnb Can't Win New York—But It Can't Quit Either (Wired)
India's global outreach from the regional level (India at LSE)
Mice treat sunk costs as real (Marginal REVOLUTION)
Health Expenses Pushed 55 Million Indians Into Poverty In 2017 (IndiaSpend)
Google takes another step into Chinese market with AI drawing game on WeChat (SCMP: China Tech)
An amoral money world needs ethical campaigners more than ever (Spectator: Martin Vander Weyer)
Barack Obama on wealth inequality: 'There's only so much you can eat' (Buffett Watch)

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Warren Buffett's 2017 Letter: Takeaways for Indian Investors

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Warren Buffett's shareholder letter for the year 2017 was released a few days back. I am going to take some of the themes in this year's letter and provide an Indian context and takeaway. (For a collection of past shareholder letters organised and annotated around major themes, please check - ' The Essays of Warren Buffett ' by Lawrence Cunningham ). 1. Valuations are expensive. So Buffett didn't do any big deals last year. Others may ignore the level of prices and pay any price to do deals. But not the Oracle of Omaha. - Indian valuations are stretched too. The Sensex P/E currently stands at 23.xx. High PEs tend to foreshadow lower returns in the next few years, till valuations moderate. A wonderful table compiled by Stableinvestor.com  shows this trade-off very well. With a starting PE of 24+ (which is very close to current levels), the 3 year return has been -5% historically. The takeaway for Indian investors is: valuations are stretched. The thing to do now...
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