Category Archives: Entrepreneurship

B Riley (NASDAQ: RILY) – analysis and stock recommendation

B Riley (NASDAQ: RILY) is a full financial services firm based in Los Angeles. The company through several subsidiaries helps companies & high net worth individuals, invest, raise money, acquire and sell companies.

I would buy between $27 and $29, hold for 3-6 months on EPS growth long term.

RILY B. Riley Financial, Inc. daily Stock Chart

There are five operating segments: (i) Capital Markets, (ii) Auction and Liquidation, (iii) Valuation and Appraisal, (iv) Principal Investments – United Online and magicJack, and (v) Brands.

Capital Markets segment provides a full array of investment banking, corporate finance, consulting, financial advisory, research, securities lending, wealth management and sales and trading services to corporate, institutional and high net worth clients. 

Auction and Liquidation segment utilizes our significant industry experience, a scalable network of independent contractors and industry-specific advisors to tailor our services to the specific needs of a multitude of clients, logistical challenges and distressed circumstances. 

Valuation and Appraisal segment provides Valuation and Appraisal services to financial institutions, lenders, private equity firms and other providers of capital. 

Principal Investments – United Online and magicJack segment consists of businesses which have been acquired primarily for attractive investment return characteristics.

Brands segment consists of our brand investment portfolio that is focused on generating revenue through the licensing of trademarks.

The stock went public on Oct 2019.

They focus principally on five target industries in the investment banking operations: consumer goods, consumer services, defense, industrials and technology.

Fundamentals: Key metrics

Market Cap: $876Million


EPS Growth 2019: 41%

Institutional Ownership: 48%

Sales growth Q/Q: 25%

EPS growth Q/Q: 43.9%

52 Week L $12.94 & 52 Week Hi $31.00

Current price: $30.0

Technical Key Metrics:

Support: $27, Resistance: $31

Moving Averages: EMA (50) – $19.91, and EMA (20) – $23.51

eBook review – Introduction to Stock Technical Analysis

I am trying to learn as much as I can about technical analysis and came across a good introductory book on Stock market technical analysis.

First step guide to technical analysis

I would highly recommend you reading this book if you are interested in technical analysis of stock price & volume action. I would give his eBook a 4/5.

Fundamental Analysis

Fundamental analysis focuses on the intrinsic value of the market. If market price is below the intrinsic value, then the market is undervalued and should be bought or vice versa.

The intrinsic value of the business enterprises is estimated as the present value of the assets of these enterprises and the ‑ow of future dividends to be paid by these enterprises to shareholders. The fundamental analysis is good for selection of securities to be invested and not good for catching the timing of buying and selling.

Technical Analysis

Technical analysis concentrates on the study of market supply and demand. Technical analysis focuses on the movement of the prices and the trade volume and tries to forecast the future movement of the prices. Technical analysis concentrates on the change of the prices, and therefore you would know the timing of buying and selling, but not on the intrinsic value, and therefore you would not know whether you were properly investing.


Among the various methods of technical analyses, this booklet is following three methods, i.e., Candlestick Charts, Trendlines, and Moving Averages.

Candlestick charts are one of the price recording methods developed in Japan but widely used globally, which indicate the current market situation at all times, though the charts pick up only the fi­gures of the open, the close, the high, and the low.

Trendlines and Moving Averages are the methods used to understand the major tendency of price change, namely, the trend. These methods of analysis are widely known as Trend Analysis. Trend analysis has been used from older times but has become popular only in the last half a century.

Candlestick charts

First, draw the vertical line from the highest price to the lowest during a day.

Then, draw the rectangle shape from the open price to the close price over the above vertical line. And if the close price is higher than the open price, this rectangle shape is shown in white and if the open is higher, it is shown in black.

Candlestick example

This white line is called “the sunny line” and black line “the shadow line”.

The length of the real body tells us the strength of the momentum of both seller and buyer. When the buyers are stronger, they keep buying and the white real body becomes longer, and when the sellers are stronger, they keep selling and the black becomes longer.

The unusual long big real body is appearing occasionally once a month or two months, when the movement becomes 2 to 3% of the price (the usual average movement is around 1%.).

The long real body and the short shadow simply tell us that most of the investors have followed the strong movement of the price and show their momentum.

When both the real body and the shadow are short, it tells us that the momentum of selling and buying is almost equal or investors see the market on the sidelines with no clear direction, or nobody is interested in the current market and leave it as it is.


The word “Trend” means the direction of the price movement when you use this word as technical term for the market. In upward phase it is called “uptrend”. The continuous change to a certain direction is called “long-term trend”. The rapid and big change is called “strong trend”.

You must ­find out a broader perspective on a direction of the trend by having got rid of the trifle and unnecessary movements. One method to gain such a perspective is to draw a straight line which could suggest a certain trend and thus is called” Trendline”.

Trendlines – uptrend and downtrend

There are two trend lines. One is the uptrend line analyzing the uptrend and another is the downtrend line analyzing the downtrend. The uptrend line is sometimes called support line and the downtrend line is called resistance line.

The uptrend line is the extended line drawn from low milestone price to then the next low milestone price when the market is considered in the uptrend.

The downtrend line is the extended line drawn from high milestone price to the next high milestone price when the market is considered in the downtrend.

And when the actual stock price crosses under the uptrend line or crosses over the downtrend line, either case is considered the signal of the reversal point of the trend price.



 Line 1 drawn from A to B and extended

Line 2 drawn from C to D and extended

Line 3 drawn from D to E and extended

All lines are upward line. You can see the change of the pitch from Line 2 to Line 3 getting faster.

The point where the actual stock price crossed under Line 3 was the turning point of the reversal of uptrend which clearly shows that the 8 -year long rising market came to an end.


This average recorded the highest of US$13,930 on October 2007 and then came the 2008 fi­nancial crisis triggered by the bankruptcy of Lehman Brothers, and fell to US$7,062 on February 2009.


Line 1 drawn from A to B and extended

Line 2 drawn from B to C and extended was added because the pitch of falling became much faster.

The turning point of the stock price was the price just over the Line 2 and after that the price was rising tremendously. Especially, the time when the price crossed over Line 1, the market became more con­fident on the uptrend.

Trend continuity

The continuing uptrend means that the low price of turning point becomes higher than the low price of the previous turning point and simultaneously, the high price of turning point becomes higher than the high price of the previous turning point. This means that the both the low price and the high price of each turning point are rising.

Moving Averages

One of the methods to extract a trend after eliminating the trifle and meaningless change of the market is called “smoothing out” the unevenness of prices. You can eliminate such small changes by calculating an average of a certain period of the price data. The term moving is used because only the latest prices of speci­fied time span are used in the calculation. This means that the period of price data to be averaged moves forward with each new trading day. And when you draw a line by connecting these averages, this line is, thus, called “Moving Average”. This “Moving Average” is sometimes abbreviated to MA.

While the trendline is basically drawn outside the change of the prices, the moving average is drawn over the change of the prices. The moving average is automatically drawn from the change of price and reflect automatically and successively the movement of the change of the prices without being influenced by drawers’ consideration. The moving average shows the trend of the change of the prices and is regarded as one of the trendlines in a broad sense.


Vice versa, see no.4; if the moving average is falling from top left to bottom right, it means the downward trend.

See no.5; if the price crosses down through the falling moving average, this means the acceleration of paces of falling. See no.6; if the price crosses up through the moving average line, this means the slowing down of paces of falling.

After that, if the moving average line turns to upward-sloping, this means entering the upward trend.


Lufax IPO: The China play #2 in the US

Since I mentioned Ant Financial a week ago, I thought I would take a look at another company in the FinTech space from China that is going public in the US – Lufax. They are looking to raise over $2 Billion with an expected valuation of over $50B. It was last valued at $38B a year ago.


Lufax Holding is one of the largest fintech companies in China in terms of AUM. It mainly provides consumer finance and wealth management for individuals, and financial solutions for institutions and governments. Its fully-owned subsidiary, Lufax platform, is one of the largest online wealth management platforms in China.

It is looking to raise over $2.4 Billion and should list before Nov 2020.

Lufax Holding, now mainly comprises 4 business
segments, Lufax platform, Ping An Pu Hui (Pu Hui), and the 2 financial asset exchanges, Qianhai (QEX) and Chongqing Financial Assets Exchange (CQFAX).

In their S1 filing there are a few interesting elements worth noticing.


China has the second largest financial system globally, both by retail credit lending volume in 2019 and by the total amount of investable assets as of December 31, 2019. The estimated demand for small business financing in China was RMB89.7 trillion (US$12.7 trillion) in 2019, of which RMB46.6 trillion (US$6.6 trillion) was unmet.

The current outstanding balance of consumer loans in China is estimated to be RMB12.7 trillion (US$1.8 trillion) as of December 31, 2019. As of the same date, China’s personal investable assets reached RMB192 trillion (US$27 trillion), making it the second largest personal wealth management market globally, and only RMB49 trillion (US$7 trillion) or 26% has been placed in wealth management products.


Lufax Financials

They did about $6.7 Billion in revenue and $1.8B in profit for 2019, growing at -5% (Covid related) in Q2 2020.

Lufax platform is the largest P2P platform in terms of both outstanding balance and transaction volume of P2P loans in China.

Lufax platform had a total of 32.36m registered users, up 27% YoY while the number of active investor users rose by 17% YoY to 7.69m.

Pu Hui focuses on individual consumer financing and SME financing. It has 3 major businesses: Ping An Zhi Tong Loan, Ping An Guarantee, and the P2P business, which was injected into Pu Hui from Lufax platform in 1H15.

Pu Hui granted new loans of CNY257bn, up 130% YoY. The ending balance of loans under management at end-September 2017 rose
by 141% YoY or 20% QoQ to CNY269bn. Pu Hui is now pushing ahead
with an offline store innovation and online approval system upgrade to
better underpin its outlet expansion in lower-tier cities, and optimize cost efficiency and user experience.

QEX and CQFAX mainly provide institutional financial asset trading
services. QEX focuses more on cross-border business, while CQFAX
focuses more on local government financing business and asset-fund
matching among institutions.

Book review: Indistractable

Indistractable: How to Control Your Attention and Choose Your Life: Eyal,  Nir: 9781948836531: Books
Indistractable book

I read the book by Nir Eyal to focus on building good discipline and focus. I would give this book a 2/5. It is a good book if you are unable to focus and get distracted all the time because of social media, news feeds, email and other activities.

Here is the summary and notes.

If you are not equipped to manage distraction, your brain will be manipulated by time-wasting diversions. According to the book, in the future, there will be two kinds of people in the world: those who let their attention and lives be controlled and coerced by others and those who proudly call themselves “indistractable.”

The antidote to impulsiveness is forethought. Planning ensures you will follow through.

Living the life, you want, requires not only doing the right things; it also requires we stop doing the wrong things that take us off track. Distractions impede us from making progress toward the life we envision.

Nir Eyal on becoming indistractable in the age of tech | productboard

All behaviors, whether they tend toward traction or distraction, are prompted by triggers, internal or external.

Internal triggers cue us from within.

External triggers, on the other hand, are cues in our environment that tell us what to do next, like the pings, dings, and rings that prompt us to check our emails, open a news alert, or answer a phone call.

Being indistractable means striving to do what you say you will do.

Master Internal Triggers

Most people don’t want to acknowledge the uncomfortable truth that distraction is always an unhealthy escape from reality.

Understand the root cause of distraction. Distraction is about more than your devices. Separate proximate causes from the root cause.

• All motivation is a desire to escape discomfort. If a behavior was previously effective at providing relief, we’re likely to continue using it as a tool to escape discomfort.

• Anything that stops discomfort is potentially addictive, but that doesn’t make it irresistible. If you know the drivers of your behavior, you can take steps to manage them.

As is the case with all human behavior, distraction is just another way our brains attempt to deal with pain. If we accept this fact, it makes sense that the only way to handle distraction is by learning to handle discomfort.

Four psychological factors make satisfaction temporary.

Let’s begin with the first factor: boredom.

The second psychological factor driving us to distraction is negativity bias, “a phenomenon in which negative events are more salient and demand attention more powerfully than neutral or positive events.” Studies have found people are more likely to recall unhappy moments in their childhood.

The third factor is rumination, our tendency to keep thinking about bad experiences.

But a fourth factor may be the cruelest of all. Hedonic adaptation, the tendency to quickly return to a baseline level of satisfaction, no matter what happens to us in life, is Mother Nature’s bait and switch.

“Every desirable experience—passionate love, a spiritual high, the pleasure of a new possession, the exhilaration of success—is transitory.”

Dissatisfaction and discomfort dominate our brain’s default state, but we can use them to motivate us instead of defeating us. Dissatisfaction is responsible for our species’ advancements and its faults. It’s good to know that feeling bad isn’t bad; it’s exactly what survival of the fittest intended.

Time management is pain management

Distractions cost us time, and like all actions, they are spurred by the desire to escape discomfort.

• Evolution favored dissatisfaction over contentment. Our tendencies toward boredom, negativity bias, rumination, and hedonic adaptation conspire to make sure we’re never satisfied for long.

• Dissatisfaction is responsible for our species’ advancements as much as its faults. It is an innate power that can be channeled to help us make things better.

If we want to master distraction, we must learn to deal with discomfort. At the heart of the therapy is learning to notice and accept one’s cravings and to handle them healthfully. It turns out mental abstinence can backfire. Well-established techniques are effective at stopping physical dependencies to nicotine and other substances, then they can certainly help us control cravings for distraction.

Without techniques for disarming temptation, mental abstinence can backfire. Resisting an urge can trigger rumination and make the desire grow stronger. • We can manage distractions that originate from within by changing how we think about them. We can reimagine the trigger, the task, and our temperament.





Liminal moments are transitions from one thing to another throughout our days.

A technique I’ve found particularly helpful for dealing with this distraction trap is the “ten-minute rule.” Every time you have a craving, you need to wait just ten minutes.

“Surfing the urge.” When an urge takes hold, noticing the sensations and riding them like a wave—neither pushing them away nor acting on them—helps us cope until the feelings subside.

They recondition our minds to seek relief from internal triggers in a reflective rather than a reactive way.

By reimagining an uncomfortable internal trigger, we can disarm it.

• Step 1. Look for the emotion preceding distraction.

• Step 2. Write down the internal trigger.

• Step 3. Explore the negative sensation with curiosity instead of contempt.

• Step 4. Be extra cautious during liminal moments.

“We fail to have fun because we don’t take things seriously enough, not because we take them so seriously that we’d have to cut their bitter taste with sugar. Fun is not a feeling so much as an exhaust produced when an operator can treat something with dignity.”

“The cure for boredom is curiosity. There is no cure for curiosity.” Today, I write for the fun of it. Of course, it’s also my profession, but by finding the fun I’m able to do my work without getting as distracted as I once did.

Fun is looking for the variability in something other people don’t notice. It’s breaking through the boredom and monotony to discover its hidden beauty.

The last step in managing the internal triggers that can lead to distraction is to reimagine our capabilities.

We can master internal triggers by reimagining an otherwise dreary task. Fun and play can be used as tools to keep us focused.

• Play doesn’t have to be pleasurable. It just must hold our attention.

• Deliberateness and novelty can be added to any task to make it fun.

The way we perceive our temperament, which is defined as “a person’s or animal’s nature, especially as it permanently affects their behavior,” has a profound impact on how we behave.

The study claimed that participants who had sipped sugar-sweetened lemonade demonstrated increased self-control and stamina on difficult tasks.

People who did not see willpower as a finite resource did not show signs of ego depletion. Ego depletion is essentially caused by self-defeating thoughts and not by any biological limitation. Willpower is not a finite resource but instead acts like an emotion. Just as we don’t “run out” of joy or anger, willpower ebbs and flows in response to what’s happening to us and how we feel. individuals who believed they were powerless to fight their cravings were much more likely to drink again.

Self-compassion makes people more resilient to letdowns by breaking the vicious cycle of stress that often accompanies failure.

Instead of accepting what the voice says or arguing with it, remind yourself that obstacles are part of the process of growth. We don’t get better without practice, which can be difficult at times. A good rule of thumb is to talk to yourself the way you might talk to a friend.

We can cope with uncomfortable internal triggers by reflecting on, rather than reacting to, our discomfort. We can reimagine the task we’re trying to accomplish by reimagining our temperament to help us manage our internal triggers.

• We don’t run out of willpower. Believing we do makes us less likely to accomplish our goals by providing a rationale to quit when we could otherwise persist. What we say to ourselves matters. Labeling yourself as having poor self-control is self-defeating.

• Practice self-compassion. Talk to yourself the way you’d talk to a friend. People who are more self-compassionate are more resilient.

Traction draws you toward what you want in life, while distraction pulls you away.

The trouble is, we don’t make time for our values.

You can’t call something a distraction unless you know what it’s distracting you from.

The most effective way to make time for traction is through “timeboxing.”

Nir Eyal on becoming indistractable in the age of tech | productboard

Is your schedule filled with carefully timeboxed plans, or is it mostly empty? Does it reflect who you are? Are you letting others steal your time or do you guard it as the limited and precious resource it is?

You can’t call something a distraction unless you know what it is distracting you from.

Planning is the only way to know the difference between traction and distraction.

• Does your calendar reflect your values? To be the person you want to be, you must make time to live your values.

• Timebox your day. The three life domains of you, relationships, and work provide a framework for planning how to spend your time.

• Reflect and refine. Revise your schedule regularly, but you must commit to it once it’s set.

The one thing we control is the time we put into a task.

Best Free Schedule Maker Tool + Productivity Guide by Expert

Schedule time for yourself first.

You are at the center of the three life domains. Without allocating time for yourself, the other two domains suffer.

• Show up when you say you will. You can’t always control what you get out of time you spend, but you can control how much time you put into a task.

• Input is much more certain than outcome. When it comes to living the life you want, making sure you allocate time to living your values is the only thing you should focus on.

Family and friends help us live our values of connection, loyalty, and responsibility.

The people we love most should not be content getting whatever time is left over. Everyone benefits when we hold time on our schedule to live up to our values and do our share. This is how friendships die—they starve to death.

The people you love deserve more than getting whatever time is left over. If someone is important to you, make regular time for them on your calendar.

• Go beyond scheduling date days with your significant other. Put domestic chores on your calendar to ensure an equitable split.

• A lack of close friendships may be hazardous to your health. Ensure you maintain important relationships by scheduling time for regular get-togethers.

Using a detailed, timeboxed schedule helps clarify the Keep a central trust pact between employers and employees.

Syncing your schedule with stakeholders at work is critical for making time for traction in your day. Without visibility into how you spend your time, colleagues and managers are more likely to distract you with superfluous tasks. • Sync as frequently as your schedule changes. If your schedule template changes from day to day, have a daily check-in. However, most people find a weekly alignment is sufficient.

It’s time for us to hack back. In tech speak, “to hack” means “to gain unauthorized access to data in a system or computer.” Similarly, our tech devices can gain unauthorized access to our brains by prompting us to distraction.

External triggers often lead to distraction. Cues in our environment like the pings, dings, and rings from devices, as well as interruptions from other people, frequently take us off track.

• External triggers aren’t always harmful. If an external trigger leads us to traction, it serves us. • We must ask ourselves: Is this trigger serving me, or am I serving it? Then we can hack back the external triggers that don’t serve us.

Interruptions lead to mistakes. You can’t do your best work if you’re frequently distracted.

• Open-office floor plans increase distraction. • Defend your focus. Signal when you do not want to be interrupted. Use a screen sign or some other clear cue to let people know you are indistractable.

Book outline and summary of each chapter


Chapter 1: Living the life you want requires not only doing the right things but also avoiding doing the wrong things.

Chapter 2: Traction moves you toward what you really want while distraction moves you further away. Being indistractable means striving to do what you say you will do.

PART 1: Master Internal Triggers

Chapter 3: Motivation is a desire to escape discomfort. Find the root causes of distraction rather than proximate ones.

Chapter 4: Learn to deal with discomfort rather than attempting to escape it with distraction.

Chapter 5: Stop trying to actively suppress urges—this only makes them stronger. Instead, observe and allow them to dissolve.

Chapter 6: Reimagine the internal trigger. Look for the negative emotion preceding the distraction, write it down, and pay attention to the negative sensation with curiosity rather than contempt.

Chapter 7: Reimagine the task. Turn it into play by paying “foolish, even absurd” attention to it. Deliberately look for novelty.

Chapter 8: Reimagine your temperament. Self-talk matters. Your willpower runs out only if you believe it does. Avoid labeling yourself as “easily distracted” or having an “addictive personality.”

PART 2: Make time for traction

Chapter 9: Turn your values into time. Timebox your day by creating a schedule template.

Chapter 10: Schedule time for yourself. Plan the inputs and the outcome will follow.

Chapter 11: Schedule time for important relationships. Include household responsibilities as well as time for people you love. Put regular time on your schedule for friends.

Chapter 12: Sync your schedule with stakeholders.

PART 3: Hack back external triggers

Chapter 13: Of each external trigger, ask: “Is this trigger serving me, or am I serving it?” Does it lead to traction or distraction?

Chapter 14: Defend your focus. Signal when you do not want to be interrupted.

Chapter 15: To get fewer emails, send fewer emails. When you check email, tag each message with when it needs a reply and respond at a scheduled time.

Chapter 16: When it comes to group chat, get in and out at scheduled times. Only involve who is necessary and don’t use it to think out loud.

Chapter 17: Make it harder to call meetings. No agenda, no meeting. Meetings are for consensus building rather than problem solving. Leave devices outside the conference room except for one laptop.

Chapter 18: Use distracting apps on your desktop rather than your phone. Organize apps and manage notifications. Turn on “Do Not Disturb.”

Chapter 19: Turn off desktop notifications. Remove potential distractions from your workspace.

Chapter 20: Save online articles in Pocket to read or listen to at a scheduled time. Use “multichannel multitasking.”

Chapter 21: Use browser extensions that give you the benefits of social media without all the distractions. Links to other tools are at: Indistractable.

PART 4: Prevent distraction with pacts

Chapter 22: The antidote to impulsiveness is forethought. Plan for when you’re likely to get distracted.

Chapter 23: Use effort pacts to make unwanted behaviors more difficult.

Chapter 24: Use a price pact to make getting distracted expensive.

Chapter 25: Use identity pacts as a precommitment to a self-image. Call yourself “indistractable.”

PART 5: How to make your workplace indistractable

Chapter 26: An “always on” culture drives people crazy.

Chapter 27: Tech overuse at work is a symptom of dysfunctional company culture. The root cause is a culture lacking “psychological safety.”

Chapter 28: To create a culture that values doing focused work, start small and find ways to facilitate an open dialogue among colleagues about the problem.

PART 6: How to raise indistractable children (and why we all need psychological nutrients)

Chapter 29: Find the root causes of why children get distracted. Teach them the four-part indistractable model.

Chapter 30: Make sure children’s psychological needs are met. All people need to feel a sense of autonomy, competence, and relatedness. If kids don’t get their needs met in the real world, they look to fulfill them online.

Chapter 31: Teach children to timebox their schedule. Let them make time for activities they enjoy, including time online.

Chapter 32: Work with your children to remove unhelpful external triggers. Make sure they know how to turn off distracting triggers, and don’t become a distracting external trigger yourself.

Chapter 33: Help your kids make pacts and make sure they know managing distraction is their responsibility. Teach them that distraction is a solvable problem and that becoming indistractable is a lifelong skill.

PART 7: How to have indistractable relationships

Chapter 34: When someone uses a device in a social setting, ask, “I see you’re on your phone. Is everything OK?”

Chapter 35: Remove devices from your bedroom and have the internet automatically turn off at a specific time.

The #Fintech Landscape

Fintech Landscape CB Insights

There are over 18,000 companies(2) worldwide in the fintech category. FinTech (or Finance Technology) comprises of startups and companies innovating the business of money. In the last decade, there has been over $250 Billion in investments made in this space. (1)

The subsectors within FinTech

The investments from the big organizations reflect the size o these markets – payments and capital markets are the largest (includes investments, loans, etc.).

We discussed the upcoming IPO for Ant financial and their business model. The other top companies in this space are:

  1. Adyen (payments)
  2. Qudian (China)
  3. Xero (SMB)
  4. Stripe (Payments)
  5. Lufax (going public soon)
  6. Affirm (going public soon)
  7. Klarna (Banking)
  8. Robinhood (Investments, Capital markets)
  9. Coinbase (Crypto currency)
  10. Ripple (Crypto currency)




Book Review: Drive – Daniel Pink #I with extended Notes

Drive: The Surprising Truth About What Motivates Us: Pink, Daniel H.:  8601420442870: Books
Daniel Pink – Drive – what motivates us besides rewards and basic desires

I had a chance to re-read this book. It is about motivation – intrinsic motivation which is the desire to learn, grown and thrive. I would give this book a 3/5. It is pretty good in the theory and outline, but short on specifics.

Scientists then knew that two main drives powered behavior.

The first was the biological drive. Humans and other animals ate to satiate their hunger, drank to quench.

If biological motivations came from within, this second drive came from without— the rewards and punishments the environment delivered for behaving in certain ways.

The performance of the task, provided intrinsic reward. Perhaps this newly discovered drive or “intrinsic motivation”—was real.

When money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity.

Rewards can deliver a short-term boost—just as a jolt of caffeine can keep you cranking for a few more hours. But the effect wears off—and, worse, can reduce a person’s longer-term motivation to continue the project.

person climbing concrete stairs
Intrinsic Motivation

Human beings, have an “inherent tendency to seek out novelty and challenges, to extend and exercise their capacities, to explore, and to learn.”

One who is interested in developing and enhancing intrinsic motivation in children, employees, students, etc., should not concentrate on external- control systems such as monetary rewards.

Daniel Pink

The book has 3 parts.

Part One will look at the flaws in our reward-and-punishment system and propose a new way to think about motivation.

Part Two will examine the three elements of Type I behavior and show how individuals and organizations are using them to improve performance and deepen satisfaction.

Part Three, the Type I Toolkit, is a comprehensive set of resources to help you create settings in which Type I behavior can flourish. Here you’ll find everything from dozens of exercises to awaken motivation in yourself and others.

Part One – A New Operating System

Enjoyment-based intrinsic motivation, namely how creative a person feels when working on the project, is the strongest and most pervasive driver. Economics was the study of human economic behavior. We leave lucrative jobs to take low-paying ones that provide a clearer sense of purpose.

Work consists mainly of simple, not particularly interesting, tasks. The only way to get people to do them is to incentivize them properly and monitor them carefully.

External rewards and punishments—both carrots and sticks—can work nicely for algorithmic tasks. The best use of money as a motivator is to pay people enough to take the issue of money off the table. In other words, rewards can perform a weird sort of behavioral alchemy: They can transform an interesting task into a drudge. They can turn play into work.

People use rewards expecting to gain the benefit of increasing another person’s motivation and behavior, but in so doing, they often incur the unintentional and hidden cost of undermining that person’s intrinsic motivation toward the activity.

Algorithmic (following a set path) but heuristic. Study of artists over a longer period shows that a concern for outside rewards might hinder eventual success.

Goals that people set for themselves and that are devoted to attaining mastery are usually healthy. But goals imposed by others—sales targets, quarterly returns, standardized test scores, and so on—can sometimes have dangerous side effects.

Like all extrinsic motivators, goals narrow our focus.

The problem with making an extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road.

Indeed, most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts.

The Seven Deadly Flaws

1. They can extinguish intrinsic motivation.

2. They can diminish performance.

3. They can crush creativity.

4. They can crowd out good behavior.

5. They can encourage cheating, shortcuts, and unethical behavior.

6. They can become addictive.

7. They can foster short-term thinking.

Carrots and sticks aren’t all bad. If they were, Motivation 2.0 would never have flourished so long or accomplished so much.

The assignment neither inspires deep passion nor requires deep thinking. Offer a rationale for why the task is necessary. Acknowledge that the task is boring.  Allow people to complete the task their own way.

Autonomous, self-determined, and connected to one another. And when that drive is liberated, people achieve more and live richer lives.

Part 2 – The Three Elements

Autonomy – Mastery – Purpose: What Motivates a Tester – jasmin tests code
3 elements that drive us – Autonomy, Mastery, Purpose


“The ultimate freedom for creative groups is the freedom to experiment with new ideas. Some skeptics insist that innovation is expensive. In the long run, innovation is cheap. Mediocrity is expensive—and autonomy can be the antidote.”

TOM KELLEY General Manager, IDEO

Type I behavior emerges when people have autonomy over the four T’s: their task, their time, their technique, and their team.


“Try to pick a profession in which you enjoy even the most mundane, tedious parts. Then you will always be happy.”

WILL SHORTZ Puzzle guru


Nine Strategies for Awakening Your Motivation

  1. Remember that deliberate practice has one objective: to improve performance.
  2. Repeat, repeat, repeat. Repetition matters.
  3. Seek constant, critical feedback
  4. Focus ruthlessly on where you need help.
  5. Prepare for the process to be mentally and physically exhausting.
  6. Praise effort and strategy, not intelligence. As Dweck’s research has shown, children who
  7. Make praise specific.
  8. Praise in private.
  9. Offer praise only when there’s a good reason for


When it comes to motivation, there’s a gap between what science knows and what business does. Our current business operating system— which is built around external, carrot-and-stick motivators—doesn’t work and often does harm. We need an upgrade. And the science shows the way. This new approach has three essential elements:

(1) Autonomy—the desire to direct our own lives

(2) Mastery—the urge to make progress and get better at something that matters; and

(3) Purpose—the yearning to do what we do in the service of something larger than ourselves.

ANT Financial – a detailed view into the IPO and the company

Ant Financial is a financial services company that was previously a part of Alibaba. Ant recorded about $17B in revenue last year and about $1.7B in profit. In March 2020 alone they profited over $1.3B, a 560% increase over last year. Alibaba owns about 33% of Ant.

Ant Financial

The company is planning to go public in Hong Kong sometime in November 2020. It is expected to raise more than $30B. With a forward price-to-earnings multiple of 40, in line with big global payments companies, Ant could fetch a market capitalization in excess of $300B, more than any bank in the world. There are 4 business lines that Ant makes money from – payments, loans, insurance and asset management (mostly mutual fund investment services).

The company’s latest annual total consisted of RMB 51.9 billion ($7.6B) in digital-payments revenue (Payments) and RMB 41.9 ($6.1B) billion in credit-technology (Loans) revenue. Ant added RMB 8.9 billion ($1.3B) in revenue from insurance technology (Insurance) and RMB 17 billion ($255M) from investment technology (Mutual Funds).

Alipay was rebranded as Ant Group Services on 23 October 2014, and the company changed its name to Ant Group Co., Ltd on 13 July 2020.


There are over 3.4 Billion bank accounts (3.1 B payment, 300 M credit cards) in China. Widespread use of Ant Financial started via QR Codes and on eCommerce marketplaces in China – Taobao, Tmall, and others.


Alipay (payments, similar to PayPal) was introduced by Alibaba group in 2004. This payment app competes with WeChat payments (owned by Tencent). That is now Ant payments.

Alipay and WeChat own about 84% of the entire third-party payment market in China. Alipay is the largest (51%), WeChat (33%) as of 2016.

The organization has expanded beyond mobile wallet Alipay to include an online lending platform, MyBank, and an investment fund, Yu’e Bao. In June 2018, Ant Financial introduced the world’s first cross-border remittance network based on blockchain. 

Yu’e Bao has become the largest money market fund in the world, with over 400M users and $211B assets under management today. Ant claims 116 — nearly all — of China’s mutual fund asset management companies sell products on Ant Fortune to its 180M users.

392M users annually use Ant’s insurance marketplace to find thousands of products sold by over 80 Chinese insurance companies. Like Ant Fortune, Ant’s insurance services also see strong margins, charging insurers tech and service fees to be featured in its marketplace.

Alipay, Ant Group's flagship superapp
Source – Financial Times

Consumers paying with Alipay also start borrowing from it. Alipay arranges small loans to consumers and small businesses and earns a service fee from the lender tied to the loan balance. Last year 500 M customers took a loan from Ant. This business is growing at 80% YoY.

Ant introduced its Yu’E Bao fund in 2013, allowing customers to invest the piles of cash growing in their Alipay accounts.

Source: The Economist


In lending, Ant offers three major financing services:
Ant Micro-Loan: The credit loan service arm of Ant’s private commercial bank, MyBank. The platform provides micro-credit loans to small businesses in China and issued loans to 3M applicants by mid-2016.
JieBei: A consumer credit loan service for Ant users with high Sesame Credit scores (600+). JieBei claims to hand out, on average, 3000 yuan (roughly $440 USD) to consumers each month, driving consumption on Alibaba’s shopping marketplaces.
Huabei: Ant Check Later, was launched in April 2015 to allow users to buy items with credit with no-interest installment repayment. HuaBei claimed 80M active users at the end of 2016.

Ant has put an emphasis on the impact artificial intelligence has in driving its loan success.

Credit Scoring

Launched in 2015, Sesame Credit (or Zhima Credit) provides a private credit scoring and loyalty program system using data from Alibaba’s services to compile its score. China lacks a reliable credit system like FICO in the US. Sesame provides its consumer and business users with a score from 350 to 950 and may be used in China’s forthcoming social credit system.

In January 2018, Ant was punished for automatically enrolling users into its credit rating system and, a month later, Sesame Credit stopped servicing unlicensed financial businesses, including certain banks, consumer finance companies, and online microlenders.

Today, Sesame is largely used for non-financial purposes, such as credit checks for bike rentals and visa approvals. Ant portfolio company Hellobike, for example, offers a deposit-free bikeshare service in 180+ cities for users with a 650+ Sesame Credit score.

Ant as a fintech platform

One of the key tenets of Ant’s strategy is its focus on providing an open platform for existing financial institutions to leverage Ant’s technology and tap into new users. As it shifts its revenue focus away from primarily financial services, Ant is prioritizing the tech services it provides to banks, asset management companies, and insurers.

Ant doesn’t need to rely on payments for profitability if it can use payments as a gateway into its financial services ecosystem, where it charges financial institutions tech and service fees with high margins.

Ant has global ambitions

Looking to the longer term, Ant is focused on expanding its presence globally to drive growth. Ant’s globalization strategy to date has focused on striking partnerships and making minority investments with local partners.

Ant Group's digital wallet partnerships in Asia

Southeast Asia, in particular, has been a major focus as Ant hopes to link its technology into partners across markets including Thailand, India, Indonesia, and the Philippines and Latin America.

Ant Financial has global ambitions with investments and stakes in multiple regional fintech companies

Investing in Ant Financial

If you want to buy shares in Ant, and you are in the US, you have to open an account with Interactive Brokers or Schwab. All the other brokers do not offer Hong Kong market access.

New Fintech Ecosystems

Source: Goldman Sachs Report on Fintech Ecosystems

The world over, Fintech (Finance technology) has been a segment of growth – from Asia and US to Europe and Africa. New disruptive companies such as Plaid (acquired by VISA) and Robinhood are challenging incumbents such as traditional banks, insurance companies and lenders.

Ant is among the largest and earliest fintech compaines.


C B Insights




Research Gate


Why you should consider buying New York Times Stock (NYSE:NYT)

There is a terrific (long) presentation about the New York Times business (disclosure, I am planning to buy the stock, small position, < 5% of my portfolio).

Here is the bull case in 5 sentences and visuals (there are 167 slides in the presentation). I have summarized, them to the 5 that I think tell the story well.

  1. The New York Times market (# of subscribers) can be about 30 million globally (they are currently at 6.5 Million subscribers). Even if they get to 50% of that number, they will be a ~$3 B annual business.
NYT Deck Images.161.jpeg

2. NYT has a much lower cost structure than Netflix or Spotify, resulting in a more profitable business, since they own their content.

NYT Deck Images.144.jpeg

3. They have very few competitors that matter, compared to other online content businesses. In fact they have more subscribers than the next 100 competitors combined.

NYT Deck Images.107.jpeg

4. They have well diversified revenue streams, from digital, print and other sources, they are all growing and are profitable.

NYT Deck Images.123.jpeg

5. They have terrifically strong financials to survive the downturn, Covid and beyond.

NYT Deck Images.023.jpeg

Billion Dollar Whale: Book Review – the Story of 1MDB and Jho Low Billion Dollar Whale: The Man Who Fooled Wall Street,  Hollywood, and the World (9780316436502): Wright, Tom, Hope, Bradley: Books
Billion Dollar Whale – the story of 1MDB and Jho Low

I was not too keen to read this book until I saw it was recommended by Bill Gates. The book was launched on Sep 2018, and is about 405 pages.

If you like crime thrillers (similar to Wolf of Wall Street) and financial crime books in particular (there are very few books in this genre), then this book is a must read.

I would give it 4/5 for story, eye for detail and pace. I suspect you can skip this book and expect to see the movie in the next year or so (because of Covid, it might launch later).

The book is the story of a young Malaysian called Jho Low, who came to study in the US (Wharton) after finishing school at Harrow in London.

Harrow schoolboy Jho Low is a real Wolf of Wall Street | Daily Mail Online
Jho Low at Wharton

After he graduated from Wharton in 2009, where he met many heirs of billionaires and other people from “old” money, he devised a scheme to raise a sovereign wealth fund for Malaysia. He did this by having the government (Prime Minister of Malaysia – Najib Razak was involved) sell bonds (loans) underwritten by Goldman Sachs and backed by from the Middle East.

Over the next 7 years, he controlled over $5 Billion in money and spent it on bribes, payoffs, kickbacks, parties (there is extensive description of the parties), art, music labels, movies (Wolf of Wall Street was financed by Jho Low), and debuachery.

He paid all the people involved by means of multiple numbered accounts in Cayman islands, Switzerland, Mauritius and controlled over 20 entities which moved billions of dollars globally.

The book itself has over 50 different characters, so it might be hard to keep up with the story. The 5 central characters are Jho Low, Najib Razak (the PM of Malaysia), his wife (Rosmah) – who had a penchant for luxury good and jewelry, the financer at Goldman Sachs (Tim Leissner) and the ambassador of UAE to the United States (Yousel Otiba).

Celebrities from Paris Hilton, Miranda Kerr, Leonardo di Caprio, Jamie Foxx and a host of others were all involved in some way as well, partying hard with Jho who had a very lavish lifestyle.

I suspect that the movie will be much better than the book, given the nature of this story.

Here are some Frequently Asked Questions.

How did he not get caught doing all this?

That puzzled me the most, but when you read the book, you realize he paid each and every person (bribes, kickbacks) he was involved with. Every one made money, so everyone partied. Even those in the Malaysian government connected to the Prime Minister benefitted. Goldman Sachs alone made over $500 Million dollars from raising money for 1MBD.

What happens to the loans?

Depending on which version of the story you read, there are over $11 Billion in loans outstanding. Most of that will have to be repaid by the Malaysian government, but others including UAE. Goldman Sachs paid the Malaysian government $2.5 Billion in exchange for the government dropping criminal charges against them. The assets purchased by Jho Low and Rosmah (wife of PM, Najib) have fetched over $1 Billion (including a yacht and over $300 Million of jewelry).

What are the consequences?

There are over 25 criminal and civil cases pending in the US, Singapore, Switzerland, Malaysia and UAE. They involve many Goldman Sachs employees, Jho Low and others. Najib and his wife are both in custody. Jho Low has not been apprehended yet and is purported to be hiding in China.

Here is a quick 10 minute video on 1MBD and the scandal.

What can we learn from Uber, Theranos, Zenefits, WeWork, Away, Thinx, Bouxtie, Luckin Coffee and Wirecard?

Silicon Valley: The home of 100’s of Unicorns

In the last 3 years there have been a raft of new startups that are privately held and valued at over $1 Billion. They are referred to as Unicorns. Many have gone public as well – some are expected to be Winged Unicorns.

First, some context. There are over 434 Unicorns, which has increased from 85 in 2015. Of these about 50 have gone public (or merged, acquired) already leaving about 380+ still privately held.

Of these, about 15 have been “bad eggs”, or about 3%.

These include: a) Uber, b) Theranos, c) Zenefits, d) Away, e) WeWork, f) Thinx, g) Bouxtie, h) Luckin Coffee, i) Wirecard and others in the bitcoin realm.

Even if you assume there are others (not publicized) and that number is twice the known ones, there are 30 “challenged” companies in a list of 450, or roughly 6%. I will let you make the judgement on if that is too few or too many.

I started to look at the key issues that came consistently among all the companies and their founders via books written about these companies – Bad Blood, Super Pumped, Hatching Twitter and Cult of We. There are no public stories about Luckin Coffee yet and the Wirecard issue is still new. The book on WeWork – Billion dollar loser is going to be released on Oct 20, 2020.

Five themes emerge:

  1. Founders motivated to make “a billion dollars” than “right a wrong” or “solve a problem”. Travis, Adam (founder of WeWork) and Elizabeth have been profiled from when they were young to be driven by money alone. In fact, when she was 5 years old, Elizabeth said “I want to have a billion dollars” when I grow up. She did not care how she got the billion dollars.
  2. Being young is an advantage, but lack of balance or wisdom is a huge detriment. Except in one case, the founders were young, between 20 and 30 years of age. While they were incredibly motivated, they also seem very one dimensional, i.e. focused only on what they cared about most at the cost of all else.
  3. Founder worship is a pendulum that has swung too far in one direction. The press and media (investors, entrepreneurs and the general public), have gone from being cheerleaders of successful entrepreneurs to devotees of the founders. Nothing that the founder can do seems to be wrong. These founders themselves were using Steve Jobs (for Elizabeth at Theraons) and Jeff Bezos (for Travis at Uber) as their role models. From the books it was clear that they took it too far, not understanding the person behind the person, instead only looking at other reported news or images and videos.
  4. Growth at all costs is a huge red herring. In all these cases, when growth (either in revenues, customer acquisitions, user adoption, etc.) stalled, growth hacking techniques were adopted, and some proverbial lines were crossed. When they could not show real growth, fake orders, revenues and customers (Luckin) were portrayed.
  5. Investors have a big part to play in this game as well. Unrealistic projections are “normal”. If you don’t have “hockey stick” growth or “eye popping numbers”, founders are pushed to get there. This is winner take all gone bad.
red and yellow heart sticker on black wooden door
Founders are expected to be Super human

The next question is what can we do about this in the near term?

First, being a good sounding board as a partner, member of advisors or mentor will help. Providing guidance to founders on ethical and moral issues to ensure they dont “flip the switch” will help. The guidance is to help balance the founder(s).

Second, most people working with startups understand there are many ups and downs. If there is an expectation that every quarter or month has to be “up and to the right”, then that creates unnecessary and artificial constraints that cause the most stress. Growth is important, but “at all costs” – is not.

Third, as an investor (or advisor, mentor) being a cheerleader on Twitter, LinkedIn is important, but it is also critical to be constructively critical about areas that need development – for the founder on a personal basis.

I am sure there are other many more actionable ideas on this topic, and a few “blots” on an otherwise clean and positive development (Growth of Unicorns) are bound to be around.