Sunday Briefing: On HDFC Bank, second order thinking, and the law of attraction

Sunday Briefing: On HDFC Bank, second order thinking, and the law of attraction

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Welcome to the Sunday Briefing newsletter where I share some of the interesting lessons in life, business, and investing that I’ve come across during the week.

Latest on Junto

In the last edition of Sunday Briefing, I wrote that I was going to post my annual letter to members and a write-up of Better Collective A/S during the week. However, things got in the way. The annual letter will be posted tomorrow while the Better Collective write-up will come out a couple of days after that.

What I’ve been reading

Deep dive of HDFC Bank. In a country that has gone through a peculiar financial history, India’s largest private bank is a rare financial institution with a remarkable culture and prudence. This deep dive by Value Punks explains why.

Banks do questionable business when they have no alternatives to grow. HDFC Bank made good loans and grew its assets as it was taking share from public banks and lending in a growing economy. It did not need to do anything dumb. It still has a long runway of growth.

A Lesson in Second Order Thinking.

Despite the numerous problems inherent in hierarchical companies, doing away with this structure altogether belies a lack of awareness of the reasons why it is so ubiquitous. Someone needs to make decisions and be held responsible for their consequences. During times of stress or disorganization, people naturally tend to look to leaders for direction. Without a formal hierarchy, people often form an invisible one, which is far more complex to navigate and can lead to the most charismatic or domineering individual taking control, rather than the most qualified.

Quote of the week

Marc Andreessen on the law of attraction.

“The world is a very malleable place. If you know what you want, and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think.”

A thought

No matter in which corner of finance you operate—trading, mergers, liquidations, value investing—your number one job is to avoid stupidity.

Have a great coming week,
Oliver Sung

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