Linkfest: July 31, 2018

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What I am reading today

Momentum Monday – Utter Disaster? (Trends... Find them, ride them and get off.)
Equity Investing is easy…or is it? (Subramoney)


Corporate Auditing Is Broken. Here's How to Fix It (Oxford Business Law Blog blog)
Noah Smith on the Gennaioli and Shleifer theory of the great recession (Marginal REVOLUTION)
Square Yards: Chasing glory in unchartered waters; How it is changing the landscape and journey within.. (Forbes India Magazine)
Tariff Troubles: When Will Consumers Feel the Pinch? (Knowledge@Wharton)
What works and what hurts business in India's new data protection bill (FactorDaily)
Tariff Troubles: When Will Consumers Feel the Pinch? (Knowledge@Wharton)
Fact Checking The Galaxy Song - Monty Python's Astronomy Lesson (Discover Magazine)
Commentary: Intergenerational poverty creates a permanent underclass (J-PAL News)

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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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