Nothing in this world can take the place of persistence.
Talent will not; nothing is more common than unsuccessful men with talent.
Genius will not; unrewarded genius is almost a proverb.
Education will not; the world is full of educated derelicts.
Persistence and determination alone are omnipotent. The slogan Press On has solved and always will solve the problems of the human race.
- Calvin Coolidge

G’day guys, gals, and galahs.

February. The shortest month. Certainly no shortage of content to shift through. LFG

Chart of the Month:

Fun Fact of the Month:

How Japan's buses stay punctual1: Infrared sensors on the buses and streets connect to a control centre, which extend traffic signals on the road where the bus is on to ensure the buses travel smoothly to the next stop

signal_1 — Bus’ location information is sent to the infrared beacon → Infrared beacon sends data to control center → Control center extends green light time/reduces red light time → You get to work on time :)

Transforming Indonesian Fisheries: A visit to Cirebon

Pretty cool story of an aquatech startup that's a 4 and half hour drive outside Jakarta, and is on track to receive unicorn status.2

So my understanding of the problem that they solve, is that in traditional aquaculture farming, getting the right amount of feed into ponds at the right time is critical because it accounts for 80-90% of a farm’s overhead. However, it is extremely difficult to standardize manual feeding.

eFishery solves the above problem by leasing (at ~$10-15/month) and selling their in-house developed smart feeder device (so both hardware and software) to aquaculture farmers to help them optimize feeding and farm productivity.

This particular farm has 16 ponds and each pond has ~10,000 catfishes. To put things into perspective, that is about 1,250 kg of fish per pond. 1kg of catfishes (8-9 catfishes) can be sold for 20,000 rupiah (~US$1.30). The farmer owning these 16 ponds started with 2 ponds in 2020 and 1 eFishery smart feeder. Today, he has 16 ponds and deploying 16 smart feeders. Not only that he barely needed to increase any labour (he has two employees) thanks to the smart feeder, but his feed conversion ratio also improved significantly. Before using the smart feeder, every 1kg of feed translates into 0.7kg of fish, after using the smart feeder, every 1kg of feed now translates into 0.9kg of fish. The harvest cycle has also improved from 4 times a year to 6 times a year. Just think about this, the farmer can harvest ~320,000 more catfishes each year with the help of the smart feeder. That is US$52,000 more income, a 50% increase in revenue, for the farmer each year.

Steve Waugh's 5 Lessons From Failure

Gotta toot my own horn. Believe me, I don’t want to tell this story because I’m so extremely humble, but a little birdy told me that this article found its way into the Australian Cricket team camp before the third test, and would ya believe it, the boys came away with the win!?

I don’t want to take all the credit, since I’m so humble. But I reckon I deserve most of it.

No player should walk out to face a bowler without a strategy for playing him. And this means that the bowler is not testing you; you are testing yourself against that bowler. The distinction is a fine, but vital one. It means that in the final analysis, it is not the individual bowler that is causing the problem, but your approach to him.

Deep Dive: Japanese Trading Companies

Sogo Shosha, or Japanese trading companies, are a fascinating topic and have done an awesome job explaining their business, history, and also Berkshire’s investment in them.

Sogo Shosha means “General (=Sogo) Trading Company (=Shosha)”. The name itself doesn’t carry a lot of meaning but today it specifically refers to seven large-caps: Mitsubishi, Mitsui, Itochu, Sumitomo, Marubeni, Toyota Tsusho, and Sojitz. All are listed on the Tokyo Stock Exchange (and have US-listed ADRs too).
[…] they account for more than US$200bn in market cap and $30bn in net profit. This is not some small obscure industry! The top three (Mitsubishi, Mitsui, Itochu) are somewhat comparable in size. The largest is Mitsubishi, which has market cap of ~$50bn, $7bn in net profit, and employs ~80k employees (across all subsidiaries). Berkshire invested in the five largest Shoshas, […]
They are extremely diversified (often said that they handle everything “from noodles to satellites”) and because of this, investors easily get lost in the diversity of their business operations and fail to grasp the big picture. There is also no “Western comp”, further making them challenging to understand. Interestingly, the rating agency Moody’s recognizes Sogo Shoshas as its own unique category, separate from other conglomerates and distribution businesses.

Smoke & Mirrors: The illusions of Islamic banking

Islamic banking is something I’m very vaguely familiar with, so reading 's breakdown was a great primer into understanding this huge section of banking.

in Malaysia, where Islamic banking and finance is a USD 300 billion market, growing around 14 percent per annum. According to Bank Negara Malaysia, Islamic banking assets reached USD 254 billion by 2020, where today Islamic banking represents 40 percent of the total banking sector.

And what the hell is Islamic banking I hear you ask?

The three basic principles of Islamic banking are the prohibition of riba, or interest and/or excess profiteering, the elimination of gharar or uncertainty, and the banning of maisar, or gambling. Islamic banking must comply with Shariah law under the concept of the Tawhid, the umbrella of the Islamic theology.

Murray helps explain how Islamic banking weaves around these rules and interpretations of them. Just a really interesting read.

[14 page PDF] Japan Rising - Is the Land of the Rising Sun finally on the rise?

Japan Rising Is The Land Of The Rising Sun Finally On The Rise

333KB ∙ PDF File

Download

Download

[82 page PDF] How the world could look like after a Taiwan war

Mammoth read. But a couple points I found interesting:

Taiwan’s fall to China would likely break some U.S. alliances and reshape strategic relations in the Indo-Pacific. One author assessed that the Philippines and Thailand would likely break their alliance relationships with the United States (because they are already fragile) and surrender to PRC hegemony.

And people might say “well yah duhhh” to this one, but still important to mention again:

The PRC would become more aggressive toward its neighbors if it were successful in taking over Taiwan. Beijing would not sit back and rest on its laurels after having “recovered” Taiwan. A few, including our Japanese author, feared that Japan would be next, especially if it participated in the attempt to defend Taiwan. Others saw the South China Sea as a likely area for increased PRC assertiveness. The Indian author worried about a flare-up on the PRC-Indian border, while the Australian author saw an expansion of PRC influence in the South Pacific and increased pressure on Canberra to terminate the U.S.-Australia alliance and the newly concluded Australia, United Kingdom, United States security arrangement, dubbed AUKUS. The Australian author envisioned that Australia would stay the course with the United States despite internal debate, but feared that New Zealand would be more inclined to accommodate the PRC. The Korean author, while likewise worried about increased PRC assertiveness, was more concerned that the PRC would give a green light to North Korea to march south.

🚨 Job Opportunity🚨 — Star Magnolia Capital in Search of Hua Mulan

Friend, previous podcast guest3, and all-round good bloke Shinya Deguchi, is looking for someone to join Star Magnolia Capital.

I would have applied if I was a Singaporean resident, but alas, I can only pass this on to the 10% of my readers from the Lion city. But most of all, I feel like this is an awesome example of how a job description should present itself.4

Open and upfront about renumeration, encouraged to contact current and former colleagues, and detailed about who and what they’re looking for.

If you’re interested and fit the criteria, make sure to apply!

Peter Douglas on Japanese Hospitality and Nozawa Onsen [Spotify] [Apple]

“one of his [Audley Twiston Davies’] favourite sayings was “When you have no idea what to do, for God’s sake do something”. which is just the best bit of business advice possible, cause it may or may not be right, but just making a decision empowers you, whereas sitting around going, “I have no idea”, you feel you are the victim.

Don Dongfan Ma of Horizon Insights on China of Tomorrow [Spotify] [Apple]

Enjoyed the points about how much government policy affects the macro situation and State Owned Enterprises.

Michael McGaughy on Emerging Market Investing in Asia [Spotify] [Apple]

Michael really does invest off the beaten path and it was beyond cool to pick his brain on how he does it.

A big takeaway was there is no time like a crisis to invest!

“a lot of Southeast Asian countries didn’t really come outta the crisis until 2001 or so, but when I went back and looked at, how those companies did after the crisis, you just had phenomenal returns. I had our data provider backtest for me all the hundred baggers around the world in the last 30-35 years. And in Indonesia, I think you had like 8% of the companies that were listed at the time. I think there were about 400 companies listed at the time, and I think about 35 of them became a hundred baggers. According to this database, that’s an 8% chance of getting a hundred bagger. […]
all you really need over the last, what, 25 years is to find one of those and stick with it and be smart enough to stick with it.

As I say every month, the most efficient way to share videos is through a YouTube playlist. Highlighting both well-known channels and some hidden gems. But mostly, I just want to showcase some of the most insightful and interesting videos related to Asia-Pacific for this month.

*Click this link to see the full playlist (or click the image)*

Travels by Michael Crichton

Michael Crichton is an absolute Chad. Went through medical school at Harvard, multiple best-selling books, directed movies, travelled the world, and overall just my kinda guy.

Admittedly he does have a kooky side. In this book, he’s heavily into trying anything involving psychics, mediums, and spiritual retreats. He even writes about how he converses with a cactus at one point.

But overall, great lessons here. Across a range of disciplines. Finding his passion. How to travel. Dealing with life’s problems.

He’s open and honest about his fuck ups and I respect the hell outta that. I was a Crichton fan before this—borderline fanatic after it.

This passage below is my favourite from a book from a long, long time:

“As I listened I noticed a tendency to talk about how they don’t protect the environment, how they don’t run the government responsibly, how they don’t build quality products, how they never report the news accurately. The basic message was that they were ruining the world, and there was nothing we could do about it. […]
I don’t know about you, but I think I’m pretty smart, and I don’t always run my own life so well. I make mistakes and screw up. I do things I regret. I say things I wish I hadn’t said. A lot of the people you see interviewed on TV have impossible jobs. It’s only a question of how badly they’ll do them. But I don’t see any grand conspiracy out there. I think people are doing the best they can.
And what’s really wrong with making them the problem, is that you abdicate your own responsibility. Once you say some mysterious they are in charge, then you’re able to sit back comfortably and complain about how they are doing it. But maybe they need help. Maybe they need your ideas and your support and your letters and your active participation. Because you’re not powerless, you are a participant in this world. It’s your world, too.”

Caffeine by Michael Pollan

Technically a book yes, but only available in audio format. Imagine the best, most well-researched 2-hour podcast ever. Makes Andrew Huberman’s podcast seem like a rambling mess5.

Pollan made me realise, I don’t even like coffee! I only like the caffeine. So I have now been a week caffeine free. Is it life-changing? No. I have noticed I dream a tonne more when I sleep now. But overall I just like the feeling of knowing I’m not addicted to it. I tried a decaf iced latte the other day, tasted like turd water honestly. So let’s see how long I avoid it.

But a cool, mini audiobook to understand the culture around coffee, and more importantly, our relationship with it.

Nothing crazy on my end this month. No big announcements. No big complaints. Just happy to be here.

One small thing of note. I will be running across Singapore (~60kms) on Saturday the 27th May. So if ya in the area around those dates, drop me a line and I’d be keen on catching up with some readers. Will be in KL afterwards so the offer applies to my Malaysian friends too!

You can find previous posts here. I also interview legends at Compounding Curiosity, lurk on Twitter @scarrottkalani, and have a Discord server for everything Allocators Asia (I’d love for you to join our cool little community we got going).

Want to get in contact? Reply to this email, comment on Substack, or send a letter via carrier pigeon and trust that fate will deliver it.

1

sauce

2

sauce: “Indonesian aquatech startup eFishery is said to be in the advanced stages of finalising a $150-million new fundraising round, anchored by Malaysia’s sovereign wealth fund Khazanah Nasional Berhad, according to multiple sources familiar with the development.”

3

Shinya’s episode on Compounding Curiosity

4

Just to be clear, I wasn’t compensated or asked to include this job opportunity in this post. Genuinely want to pay it forward. Shinya is awesome, and whoever lands this job is one lucky bugger.

5

for the record I quite like Andrew Huberman’s podcast, I highly recommend the alcohol episode.

Allocators Asia

Best of February in Asia-Pacific