Health, Wealth & Leadership [12 May 2024]
I share what I learn about health, money and leadership. Here is what I learnt last week:
Eating 50 grams of almonds per day can change the shape of your body.
If I had invested 1 lac in this business twenty years ago, it would be worth 10 crores today.
Learning from 50 years of Warren Buffett teachings on Zerodha Varsity
12 lessons from an entrepreneur that sold 3 businesses by 35.
The best way to differentiate between your Needs and Wants.
Consuming a high amount of ultraprocessed food is linked to chronic kidney disease (CKD) risk.
You can access previous editions of my weekly emails here.
(1) Eating 50 grams of almonds per day can change the shape of your body.
In this meta-analysis of randomized controlled trials 2,728 men and women were studied.
In most trials, the average daily intake of almonds ranged from 10 to 100 grams. The comparators included nut-free diets, other nuts, and snacks. The intervention duration ranged from 3 weeks to 18 months.
Here are the results of consuming almonds:
- Bodyweight reduced by 0.45 kg.
- Waist circumference reduced by 0.67 cm.
- Hunger reduced by 1.15 mm (on a 100-mm visual analogue scale).
The results were similar in subgroup analyses as supplementation with almonds reduced bodyweight and waist circumference in trials:
- with a duration of 12 weeks or longer.
- where participants had a BMI less than 30.
- where 50 grams or more of almonds were consumed daily.
Here is the study: https://pubmed.ncbi.nlm.nih.gov/38351580/
My two cents: Carry 50-100 grams of almonds with you. If you have it on you then when you get peckish you will reach for this body-shaping nut instead of grab whatever drool worthy unhealthy option that you are surrounded by. This is also called 'behavior design'. You "design" your behavior before you reach the point of hunger so that your response to that hunger is pre-planned.
(2) If I had invested 1 lac in this business twenty years ago, it would be worth 10 crores today.
That's 1000x.
And if you're in India there is no way you haven't heard of them. Titan, Tanishq, Eyeplus, Taneira. They all come under the umbrella name of Titan.
Did you know that the major shareholder of this one of a kind business is actually the state government of Tamil Nadu?
The story of this Tata company started in 1984 and almost ended in 2003. They had lost 127 crores and had 7 rupees of debt for every 1 rupee of equity. They hadn't made their shareholders any money in the previous ten years.
A meeting then took place with the board of Tata Sons at Bombay House. In this meeting Bhaskar Bhatt, Jacob Kurian and McKinsey convinced the board to give the company some more time to turn the business around. And as they say "the rest is history".
Today Titan:
- Is the largest manufacturer of watches. Has 60% market share.
- Is the largest retailer of jewelry. Jewelry is 80-85% of Titans profits. They make 3x more profits than their nearest rival.
- Is the largest retailer of eyewear.
No one in the country can compete with Titans jewelry business Tanishq. In fact every jeweler in the country dreams of becoming a Tanishq franchise because the Return on Capital Employed is close to a mind boggling 50%. That means that for every 100 rupee that someone invests they get a pre tax return of 50 rupees. Every year! WTF!
Here are 3 reasons why Titan made profits nearing 3800 crores in the last year and has gross margins of 25% when the industry average is half that.
(1) Titan doesn't use any of its own money to buy gold. It has a deal with banks where it takes gold on credit for up to 180 days and pays them back when it sells its jewelry. Given that their inventory turnover is 4 months and they have to pay back latest in 6 months, they are able to use the banks and customers money to make their money. Incredible!
What's more? They pay the rate of gold on the day of sale so they hedge their risk of fluctuations in gold prices.
And guess how much interest they pay the bank to do all this?
ONLY 1.5% per year!!!!! Another WTF!
(2) Titan is able to focus on design, customer experience and branding. They charge 3x that of its rivals. They are able to charge more because of the trust they have built over the years with campaigns like that of the caratometer to check the purity of their gold. Their ability to design jewelry at an epic scale (think 10,000 new designs every year) that customers want to buy is unmatched.
(3) They hire the best and work with the best. Their people and relationships are outstanding.
For an entrepreneur like me, listening to how Titan runs its business is a turn on.
I highly recommend you hear the Marcellus podcast on Titan with Saurabh and Deven. I know more about gold now than I ever did before. This should be taught in every B-School in the world.
(3) Learning from 50 years of Warren Buffett teachings on Zerodha Varsity.
I am a fan of Warren Buffett and Charlie Munger. I admire them. I try to learn from them. I emulate them by thinking like them whenever possible.
So when someone does the work of summarizing the lessons that they have preached over a period of 50+ years, I drool all over the content.
Zerodha Varsity has taken up the task of reading through all of Warren Buffett's annual shareholder letters dating back to the 1970s to teach us all some basics. Even though I have read these, I still ended up learning something new. You don't have to be an investor to take nuggets of wisdom out of these.
Here are 6 lessons I learnt from the first episode:
(1) UNDERSTANDING INFLATION: Let's say you have $100 and you can buy 10 burgers from this money today. You decide to invest that money instead. In 5 years let's say you now have $120. However when you go to the market, you can still buy just 10 burgers. The lessons? You may feel richer but you are not eating richer. This is what inflation (rise in prices) does.
(2) EQUITY IS THE BEST ASSET CLASS: Warren always believed that it is equities that will help one maintain or improve their purchasing power by outpacing inflation. Find great companies and own them forever like they did.
(3) ASSET-LIABILITY MISMATCH: If you have liabilities that may come due in 6 months but assets which are locked in for 30 years, you can't use those assets to address those liabilities. This is called Asset-Liability mismatch. This is one of the reasons why IL&FS, DHFL and Yes Bank got into a crisis.
(4) THE ANATOMY OF AN EXCEPTIONAL RETAIL BUSINESS: Having rising Revenue Growth, Volume Growth and Same-Store Sales Growth proves higher pricing power. That is the kind of business you want, as was the case with See's Candies.
(5) BOOK VALUE VS INTRINSIC VALUE: Let's look at your education to explain the difference between the two. The amount you spent on your education can be assumed to be your "book value". The amount of money you will earn through your lifetime is your "intrinsic value". In a business, what you've put so far is your "book value". What you will earn in the future is your "intrinsic value".
(6) LOOK AT INCREMENTAL GROWTH IN EQUITY (ROE): If your capital from last year has grown 20% but your income has only grown 10%, that means the newer capital has earned smaller profits. Your capital should be growing at 20% or more.
P.S. I loved the interactive format and the quality of the video. It was engaging and informative. Here is the link to the video ->
(4) 12 lessons from an entrepreneur that sold 3 businesses by 35.
I am an entrepreneur. I try to learn from other entrepreneurs. Here are the top 12 lessons I pulled out from Codi Sanchez, an entrepreneur who has sold 3 business before she turned 35.
(1) Most people give up too fast.
(2) Not in writing? Didn't happen.
(3) Your favorite words have three letters: CPA, COG, CAC, P&L.
(4) Protect your energy. It's real.
(5) Sales beats everything.
(6) Be your own motivation speech.
(7) You won't win if you're not obsessed.
(8) Ignore talk, believe skin on the game.
(9) Leave money for a rainy day.
(10) You can't eat net worth, cash is king.
(11) You're one person away from your win.
(12) Dream so big you outdream others.
Here is the Original Post.
(5) The best way to differentiate between your Needs and Wants.
“If you don’t fulfill your needs, no wanting is ever going to happen.
There is a law of 3s.
3 minute without air, you’re dead.
3 days without water, you’re dead.
3 weeks without food, you’re dead.
Wants are the things that we desire.
As a human being, you have some other needs too.
You need love. But from whom is your want.
You need food. But what kind is your want.
Your wants will always change. Your needs are fundamental.”
(6) Consuming a high amount of ultraprocessed food is linked to chronic kidney disease (CKD) risk.
As soon as the weekend hits, I like to grab a few packet of uncle chips, get Amul cheese and dip into mayonnaise. I consider Saturdays, Faturdays.
I would say that my intake of ultraprocessed foods (UPF) is 5% or lower every week.
As the below research shows, consuming a high amount of ultraprocessed food is linked to chronic kidney disease (CKD) risk.
In this study 219,132 adults, (56% women, 44% men) who had no known health conditions were studied.
The results of the meta-analysis suggested that the highest UPF intake was associated with an increased risk of incident CKD.
Here is the research: https://pubmed.ncbi.nlm.nih.gov/38345016/
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What are ultra processed foods?
Ultra-processed foods are foods that have been significantly changed from their original state and often contain added salt, sugar, fat, additives, preservatives, and/or artificial colors. They are typically made from chemically modified ingredients, which are assembled to create ready-to-eat meals.
Cereals, jams, frozen dinners, soft drinks, chips, instant soups, packaged breads are all examples of ultraprocessed foods.
My two cents: Try eating cooked meals with as many fresh ingredients as possible.
Harsh Batra (LinkedIn)
Whenever you are ready, there are 3 ways I can help you:
Happy Ratio - The foundation of health is your diet. You should focus on eating nutrient dense meals. But this is not always possible or easy. Happy Ratio is the only quick service restaurant chain that is on a mission to make healthy food the default choice for Indians. We are present in Delhi NCR and turned on Swiggy and Zomato last week for Gurgaon. Try us.
EthosData - If you are running M&A transactions, planning an IPO, or sharing anything confidential online, my team can run your Virtual Data Rooms. Companies like Tata, Reliance and Moody’s trust us.
Marcellus Investment Managers - I am a Marcellus client because their investment philosophy resonates with how I think about investing. My assumption is that Marcellus can generate returns that provide an average compounding return of 18% per year over the next 10 years. That means 5x your money in 10 years. Investing comes with inherent risks so please do your own due diligence before deciding where you put your money. I am also an Independent Financial Advisor with Marcellus.