2016 – Page 2 – The Talkative Man

Pythagoras’s Philosophy of Vegetarianism

Pythagoras Advocating Vegetarianism (c. 1618-30) by Peter Paul Rubens

Vegetarianism is a conscious decision not to eat meat and other animal products.

Vegetarianism is the principled refusal to eat meat. The ancient Greek philosopher Pythagoras (c. 570-c. 495 BCE), who required members of his philosophical society to abstain from eating meat, is often viewed as the first important vegetarian. Before the word “vegetarian” was coined in the 1840s, non meat-eaters were often called “Pythagoreans.”

What is wrong with eating meat? Vegetarians have offered various criticisms for the practice, contending that eating meat is cruel (often, from the twentieth century onward, citing the methods of industrial meat production), unethical (often citing recent work in practical ethics, particularly by Peter Singer), unhealthy (often citing the fact that vegetarians tend to be less obese and less likely to die from ischemic heart disease), unnatural (often claiming, wrongly, that prehistoric humans subsisted on a vegetarian diet), environmentally unfriendly (often citing the relative inefficiency of meat production), and in conflict with the tenets of religious faith (sometimes citing reincarnation, as with the ancient Pythagoreans and several modern Hindu sects).

There are also different degrees of vegetarianism: for example, ovo vegetarians will eat eggs, lacto vegetarians will eat milk, and ovolacto vegetarians will eat eggs and milk, whereas vegans forego all products derived from animals and fruitarians furthermore forego all plant foods that involve killing the plant, eating only fruits, nuts, and seeds. Vegetarianism is typically associated with a similar refusal to use products derived from animals, such as leather and wool.

The modern vegetarian movement is dated to 1847, when the Vegetarian Society was founded in Great Britain. In Western countries, vegetarianism has been increasing since the 1960s, and due to continuing and intensifying ethical and environmental concerns, it is likely to flourish in the future.

Costco’s Winning Business Model Strategy

Costco Logo: Costco's Winning Business Model Strategy

Costco has built a devoted foundation of customers with low prices and workers with high wages. The discount warehouse services industry is highly competitive. There are several warehouse operators across the United States and Canada that offer similar merchandise quality, selection, and price.

At the end of financial year 2015, Costco managed 480 membership warehouse clubs in the United States, 89 in Canada, 36 in Mexico, 27 in the United Kingdom, 23 in Japan, 11 in Taiwan, 12 in Korea, 7 in Australia, and one in Spain. Base and executive memberships cost $55 and $110 per year, respectively. The company operates 557 warehouse stores, 406 of which are situated in 40 U.S. States and Puerto Rico. The rest are in Canada, Mexico, Japan, Taiwan, Korea, and the United Kingdom.

The internet has made it immeasurably easier for shoppers to chase for the latest deal—and a lot more demanding for brick-and- mortar retailers to command customer loyalty. However, Costco has managed to resist the tendency—with only 3% of its retail sales occurring from e-commerce. In reality, it outclasses other retailers when it comes to dependably increasing sales from its millions of loyal shoppers.

At the warehouse stores, forklifts relocate pallets into racks such that the first time an item is actually touched is when the consumer contacts into the shelf to collect the item and places it into their shopping cart.

Costco's Sustainable Competitive Advantage

Costco’s Sustainable Competitive Advantage

Costco’s objective has been to increase sales while cutting long-term costs (by trimming freight expenses, scaling its merchandise, negotiating prices with vendors, and reducing packaging) with the intention that it can pass those savings down to members. Costco has said that its “rule of thumb is to give 80% to 90% back to the customer.” Those efforts have paid off, with memberships reaching an all-time peak of 81 million members in 2015.

Shiny steel caskets exhibited amongst the stacks of snow tires and pallets of heavy applesauce, rose-scented toilet tissue, mentholated shaving cream, and mild-flavored salsa. However, in time, people may grow familiarized to the sight. By including these special deal items to the cart, the total spend at the cash register expands. This behavior diverges severely with the type of consumer who has the self-control to fill up on everyday consumables at everyday low prices. The latter type of consumer does win in the end even if the cost of the membership is factored into the equation. As one (rather demonstrative) instance, when reviewing the 1999 Kroger-Fred Meyer merger, the FTC vindicated this definition by asserting,

Supermarkets compete primarily with other supermarkets that provide one-stop shopping for food and grocery products. Supermarkets primarily base their food and grocery prices on the prices of food and grocery products sold at nearby supermarkets. Supermarkets do not regularly price-check food and grocery products sold at other types of stores and do not significantly change their food and grocery prices in response to prices at other types of stores. Most consumers shopping for food and grocery products at supermarkets are not likely to shop elsewhere in response to a small price increase by supermarkets.

What Makes Costco Successful

Renewals of Costco’s $55 annual memberships stand at a remarkable 91%—a record high. On the word of financial analysts, the low price of memberships and a stable return of loyal members is what sets Costco apart from big box and department store retailers which persist to fight for market-share gains in a altering landscape of increased competition from online retailers led by Amazon. Costco’s ability to dependably drive increases in traffic is a key differentiator.

Everything at Costco is continually being evaluated for productivity. Costco manages a mix of distribution facilities to accomplish the overall objective of operating with an efficient supply chain. The company lately substituted the form of their milk cartons to get rid of the empty space at the top. They can fill thinner jugs all the way to the top, so they can get more gallons onto the same amount of space on a freight truck. The loss-leader abilities of Costco’s business model ought to endure to drive market share advances over the long term. However, it is possible that incumbent grocers could react to Costco, Sam’s Club, or Walmart Supercenter entry along one or more of these non-price dimensions, in which case their prices could continue unaffected or rise.

Costco’s philosophy is to provide its members with quality goods at the most competitive prices. It does not concentrate its efforts on maximizing prices in the short term, but instead focuses to maintain a perception among its members of “pricing authority,” or constantly providing the most competitive prices. This question is actually quite complex in that it has multiple answers that boil down to individual consumer behavior. The reality is that Costco has perfected a purchasing strategy known as the “treasure hunt” which means that there are always new items and tempting deals that extemporaneously come and go. The consumer who walks every aisle knows what I mean by this because they are subconsciously on the treasure hunt.

During the next 10 years, warehouse openings should move the number of primary cardholders to 65 million–75 million, up from 45 million in the most current fiscal year. In spite of having warehouses that spanned three acres, and piles of merchandise stacked to the ceiling, Costco carried only 4,000 carefully chosen products at a time. Three-quarters of the items were such “basic” products as batteries, laundry detergent, and instant noodles. Then there were the “high-end” name-brand products, which might be stocked at Costco one day and then gone the next.

Costco Employees Happier with Wages and Benefits

While Walmart and Target just recently began increasing take-home pay for their employees, Costco has been an industry trendsetter for years. With starting hourly pay at about $11.50 and a company average of $22 per hour, Costco’s compensation costs beat the competition. Costco has asserted that paying employees well can be more advantageous eventually by keeping turnover low and capitalizing on employee efficiency. Actually, turnover stands at about 10% compared with the industry average of 55%. For employees who have been there more than one year turnover drops to just 6%. Employees rarely leave: The company turnover rate is 5% among employees who have been there over a year, and less than 1% among the executive ranks. Costco management has asserted that loyal employees bring about better customer service.

Costco purchases the majority of their merchandise promptly from manufacturers and routes it through a network of cross-docking facilities, which act as merchant consolidation points to move goods in full truckload volumes to the stores. Sam’s Club carries about 4900 items and Costco around 4000; by comparison, the normal grocery store carries approximately 50,000 and the average Walmart about 100,000. Furthermore, the shopping experience at warehouse clubs is unusual—members pay a fee for access to goods stacked high and sold in wholesale quantities in low-amenity environments. Warehouse clubs are very spartan in their accommodations. They do not bag consumers’ purchases, and a club employee checks all shoppers’ carts and receipts on exit.

Secret to Costco's Success Lies in Supply Chain Efficiency

The Secret to Costco’s Success Lies in Supply Chain Efficiency

Big-box retailers Costco, Sam’s Club, BJ’s Wholesale, and Walmart, along with full-service and fast food restaurants, are significant contributors to the nation’s obesity outbreak. Costco continues to productively increase its businesses, on account of its low prices and robust customer loyalty. Its ability to provide quality products, at a reasonable price, should appeal to most consumers in North America and around the world. While competition in the market remains ferocious, Costco’s leadership is taking the right steps to guide the company into the future. Over the years, Costco added departments, growing further than the traditional discount warehouse offerings. A large majority of the stores featured a drugstore, an optical-dispensing center, one-hour photo services, a food court, and the ever admired and low-priced hot-dog stands. More than half-offered hearing-aid centers and a handful were equipped with print shops and copy centers. More generally, not all big-box chains are created equal. The big-box retail literature has fixated almost exclusively on Walmart, examining its effects on a wide range of outcomes, including prices, labor market consequences, small business activity, time use, obesity, and social and cultural pointers.

Using city-level panel grocery price data matched with an exclusive data set on Walmart and warehouse club locations, customers find that Costco entry is associated with higher grocery prices at obligatory retailers and that the effect is sturdiest in cities with small populations and high grocery store densities. The competitive response need not be to reduce prices; conversely, as segmented-market models with a mix of brand-loyal and price-sensitive consumers have shown that in some cases incumbents can increase prices in response to a low-cost entrant.

The lesson to be learned from Costco for every manufacturer, distributor, or retailer, regardless of industry, is to figure out how to eliminate the fingerprints within the respective supply chain and within internal processes.

Lalitha Mahal Palace, Mysore

Lalitha Mahal Palace is one of the most gorgeous and splendid heritage buildings in Mysore, perhaps in Karnataka itself, next only to the Maharaja’s palaces at Mysore and Bangalore.

Mysore being a princely state under the British, many distinguished foreign visitors used to visit Mysore for numerous purposes. They used to stay in Mysore palace itself. But this was not suitable for the stay of foreign dignitaries for obvious reasons. Hence the then ruling king Krishnaraja Wadiyar IV thought of constructing a building wholly for the foreign guests, where they would be more at home. Naturally he thought of a European classical building rather than an Indian palace.

The Maharaja immediately commissioned a famous architect by name E.W Fritchley. He selected a vast site near the foot of the Chamundi Hill, far away from the noise and pollution of the city. The magnificent building was completed in 1931 under the close guidance of the Maharaja Krishnaraja Wadiyar IV at a cost of about thirteen lakhs of rupees.

The building is an imposing two-storied magnificent structure. The projecting square porch at the ground floor and slightly projecting first floor porch with a trefoil pattern at the roof level are very pleasing. Both the floors have twin Ionic columns, eight on either side of the entrance which give a pleasing effect to the edifice. Two tiered domes are placed on all the four sides with one each at the middle. However, the most striking dome is the three tiered one which is just above the circular entrance hall. Actually it is at a great height and dominates the entire area including the elevation. One lakh bulbs were used to illuminate the palace on weekends and explained about the facilities for foreign tourists at the palace.

Magnificent Interiors with woodwork, stone work, or stucco at the Lalitha Mahal Palace Mysore

Though planned by a foreigner, the craftsmen were all local who had attained great mastery in the art of construction—be it woodwork, stone work, or stucco. This is evident from the richly-laid ornamental motifs on walls and ceilings, wall panels, window shutters and door Jambs. The imported tiles and some fixtures add a touch of royalty to the building. The balustrade staircase just facing the entrance branches off to right and left to reach the first floor is a pretty piece of Italian marble. Thus from top to bottom and from one end to another is an epitome of royalty. Even international guests are amazed at this dream-like edifice. Today it is a prestigious hotel of the government of India and attracts discerning tourists from abroad as well as within the country. Even important distinguished persons of the government also stay here, and enjoy the touch of royalty of the bygone ages of Mysore.

Lalitha Mahal Palace Hotel is owned by the State of Karnataka and has been leased out to India Tourism Development Corporation (ITDC.) The Lease Agreement is valid till 2023. There is a particular clause in the agreement which clearly states that “in case of a possible disinvestment, the hotel shall be given back to the State at the book value.” Hence the Management of ITDC have two choices: Manage the property till 2023 and then hand it over to the State Tourism Department or hand it over to the State right away at the book value. In case they feel they can’t run the hotel, the State of Karnataka is free to do whatever they want thereafter.

Magnificent Architectural Features of Gol Gumbaz in Bijapur, Karnataka

Muhammad Adil Shah's architectural treasures in the city of Bijapur in northern Karnataka

Celebrated for its Muhammad Adil Shah’s architectural treasures, the city of Bijapur, in northern Karnataka has in recent years gained celebrity, both in the popular domain as a destination for travel and tourism, and in the intellectual domain as an object of academic study.

Even though art-historical studies of Bijapur have tended to focus attention upon the monuments and urban layout developed during the Muhammad Adil Shah’s period, the city was already evidenced by a cosmopolitan population and architectural activity before Muhammad Adil Shah transformed it during the sixteenth and seventeenth centuries to function as their capital. Gol Gumbaz and Ibrahim Roza in Bijapur continue to draw hundreds of visitors every day.

There have been no reductions in the number of Indian tourists visiting the two sites, there has been a decrease of between 50 and 100 in the number of arrivals from abroad compared to last year. In order to attract more tourists, the Archaeological Survey of India has taken steps to upgrade Bara Kaman, Gagan Mahal, Chota Gumbaz and the Citadel Wall.

Magnificent Architecture of Gol Gumbaz in Bijapur, Karnataka

Gol Gumbaz, literally meaning round dome is a tomb of Muhammad Adil Shah (1627-57 CE) planned by himself even before his death. Thus, this monument is one of the largest and most outstanding single buildings in the entire country. This mausoleum is one of the finest structural triumphs of the Indian builders because of its astonishing size. It is a square building with each side measuring 205 ft and its height is 200 feet. The building consists of four thick walls topped by a dome, the outside diameter of which is 144 ft. The interior of the hall measures 135 ft across and it is 178 ft high. Thus, it has over eighteen thousand square feet. It is said that this is bigger than the Parthenon of Greece, which is one of the enormous and magnificent structures. Thus by the sheer size of various parts, Gol Gumbaz reigns supreme in the world of architecture.

Architecture is the construct of life and tradition and has to be understood as such. All plastic art forms are symbiotic on each other for their fullest expression, with the performing and literary arts playing supplementary and complementary roles in the overall composition. India, home of an ancient culture, has long been noted for its civilizational forays, which encompassed varied scientific ideas and technical skills. Its geographical position in the ancient world enabled it to become an internationally important center for integrating and transmitting new scientific ideas and techniques.

engineering wonder and Geometric precision of Gol Gumbaz in Bijapur, Karnataka

However, this is not all. Gol Gumbaz is considered an engineering wonder by the skillful composition of its various parts, the harmonious combination of arches, cornices, foliated parapet and ultimately in the interior to support the vast dome. It is so ingeniously planned to convert the square hall into a circular one by making it into eight angles over which the entire load of the dome rests. This dome is the biggest in Asia and the second biggest in the world. The dome itself is a plain plastered vault with six small openings and is 10 ft in thickness. The interior surface of the dome is placed twelve feet from the inner edge of the circle to distribute and transmit its huge weight downwards on to the four walls. The conversion of a square hall while going up into an octagon and then into a circle finally is a great engineering accomplishment. One can climb to the top through the six-sided enclosed staircases with small domes on all the four sides, which add a grace to the structure. Geometric precision was achieved for the various elements of the dome, including the cast joints, the curved tubular sections and the fixings, through meticulous workmanship.

The domed, centrally-planned design adopted to mark the site of Jesus’ death and resurrection was adopted as well for Christian martyria and baptisteries. However, both the architectural form and the symbolical associations of these Christian buildings were themselves obligated to earlier, non-Christian traditions. With regard to construction, both Christians and Muslims shared a common legacy of building materials, techniques, and tools passed on from the Greco-Roman, Persian, and even the earlier Etruscan worlds. The geometric references of both Christian and Islamic sacred buildings were not merely rooted in mystical thought with no scientific basis. Rather, such mystical thought was familiarly bound with pre-modern cosmology.

Corbelled dome is the Gol Gumbaz at Bijapur and Whispering Gallery

The most awe-inspiring example of a corbelled dome is the Gol Gumbaz at Bijapur. It is generally overlooked that the third largest dome in the world is built upon the megalithic principle. The distinct bricks set in the horizontal courses are embedded in so much of mortar that the dome becomes a mass of mortar to which the bricks have been added. It is believed in some quarters, for structural reasons, that the masonry of the Gol Gumbaz does serve only to transmit vertical stresses to the masonry. However, in all probability for the architect here, the traditional experience of mortar in dome was to safeguard stability for such a massive and unique structural heroic of this kind. If the cast dome of the Gol Gumbaz deserves to be called a corbelled because of its horizontally set bricks, most of the vaulting at Bijapur is pure cast forms that are not liable to collapse even when most of the underpinning has been destroyed. Many unique shapes of ceilings were possible because of the pioneering use of mortar, which is very stable.

Another greatness about this tomb is that it is a whispering gallery where even the mild sound is multiplied hundred fold and reverberates. That is the reason why this is famous all over the world as a whispering gallery. Within the center of the building and below the ground level is the real tomb of its creator Muhammad Adil Shah and his relatives. Nevertheless, what are seen on the ground now are the imitation tombs. Thus, Muhammad Adil Shah gave to the world a great and marvelous structure exhibiting the engineering skill of medieval India, which has won admiration even from modem engineers.

The rich culture, heritage, and architecture of the north Karnataka region are something to be cherished. The region is not only known for its rich cultural heritage but also for great talents in arts and literature.

The Rise and Fall of Theranos

Elizabeth Holmes, CEO of Theranos Two years ago, the blood-testing startup Theranos was one of the hottest assets in Silicon Valley. Valued at $9 billion, it guaranteed nothing short of a paradigm shift in medicine with its groundbreaking, needle-free test process. CEO Elizabeth Holmes, a 32-year-old Stanford dropout, was effusively profiled in the business press as the world’s youngest self-made female billionaire. But now, the company is fighting for its survival, in the midst of claims that its tests are “at best, fundamentally flawed and, at worst, unsafe.” The disturbance began six months ago, when The Wall Street Journal reported that the company’s breakthrough technology, which could reasonably run hundreds of tests with blood from a finger prick, couldn’t really deliver. Not long after, the Centers for Medicare & Medicaid Services, which regulates lab testing, said that Theranos put patients’ lives at risk with faulty tests at its California lab. The latest blow: The Justice Department and the Securities and Exchange Commission (SEC) lately began independent criminal investigations into whether Theranos deceived investors about its technology.

Nothing is proven yet. It’s very unusual for the SEC to investigate a privately held company like Theranos, but it could begin to happen more often. SEC Chair Mary Jo White wants to give more enquiry to the growing number of so-called unicorn startups, which are valued at more than $1 billion, “because they pose a high risk to investors.” The company’s fate is now in the hands of its charismatic founder—as the company’s leader, chairwoman, and majority stakeholder, Holmes can command what she wants done at her company. It’s a common procedure in Silicon Valley’s startup philosophy, where boards have “little real power.” Many venture capitalists are willing to take the risk, hoping to get in with the next Mark Zuckerberg, but “if trouble brews,” the cult encircling a founder can become a obligation. That’s largely because there is no such thing as investigative journalism in Silicon Valley. Journalism here is largely confused with, and deliberately conflated with, public relations, but they’re not the same thing.

So far, Theranos has never been able to establish its testing technology really works. Rather than publishing research in peer-reviewed journals, or letting its blood-testing machines to be assessed by external experts, the company has continually kept its methods cloaked in secrecy. Theranos has reasoned that it was guarding trade secrets, but testing openness is customary routine in the medical industry. Even drug companies, which function in a exceedingly aggressive segment, issue adequate results of their drug trials to establish that a medicine actually works, whilst even keeping sufficient details secret to make their product proprietary. Blood testing is a $73-billion-a-year commerce set for disruption—as any person who’s had blood drawn can confirm, it’s laborious, uncomfortable, and pricey.

Theranos is under investigation for fraud, which is weird for a private company. Theranos is performing tests on patients without having published peer reviewed research—a cardinal sin in science—and with minimal federal oversight. Theranos should have attracted scrutiny long before it did.

The Death of Confucius

From age 56 to 68, the Chinese philosopher Confucius wandered from state to state hoping that somewhere he could put his political doctrine into practice. During these years he never lost confidence in his cailling as political mentor of the Empire.

At age 57, when he returned to his native state finally, he lamented in a poem that, “men are without insight, quickly the years pass.” He said, despite all his wanderings through nine provinces there was still no goal in sight for him.

Confucius spent his last years peacefully in Lu. He accepted no government position. He seems to have undergone a profound change. A hermit once said of Confucius: “Is that not the man who knows that striving is without hope and yet goes on?” He studied the I Ching, or Book of Changes, so rich in secrets and completed his systematic groundwork for a new mode of education by committing traditions to writing and by instructing a group of young men.

One morning Confucius felt the approach of death. He walked about the courtyard, humming the words: “The great mountain must collapse, the mighty beam must break, and the wise man wither like a plant.”

When an alarmed pupil spoke to him, he said: “No wise ruler arises, and no one in the Empire wishes to make me his teacher. The hour of my death has come.” He lay down and died eight days later at age 73.

Kadamba Temple, Gudnapura in Karnataka

Gudnapura in North Kanara district is just five kms from the famous ancient city of Banavasi which was the capital of the early Kadambas. Gudnapura suddenly became famous because of the discovery of an inscription of Kadamba Ravivarman. The inscription has been inscribed in box-headed characters of Brahmi of the sixth century AD. This inscription furnishes some very important evidences regarding Gudnapura which perhaps was the area where a large number of royal buildings existed. The inscription states that king Ravivarma built a temple for Manmatha and set up this pillar with this inscription. While mentioning the boundaries of the temple it states that to the right of the temple was a palace of the king while to the left there were two dancing halls (nrityashala) and in front was harem (antahpura). Taking the clue from these details, the Archaeological Survey of India conducted excavations at the site and this resulted in bringing to light two brick structures, with various antiquities.

Kadamba Temple of Gudnapura in Uttara Kannada District, Karnataka

One of the brick structures has been identified as a temple. It consisted of a garbhagriha and a longish mandapa and both are enclosed within a prakara. This provides inner circumbulatory passage. The mandapa had wooden pillars. The mandapa had two entrances. A large number of flat but apsidal small tiles have been discovered in the excavation and perhaps they were used for the ground and roof. Some of these tiles have small holes. Large number of iron nails have been found in the excavation and hence it is suggested that these roof tiles which had holes were fixed to wooden beam with the help of these nails. The bricks used here are of high quality and some of them measure 38 by 19 by 17 cms.

In front of the temple is another structure made of laterite bricks and it may belong to a slightly later period. Unfortunately there is no clue to know the god which had been consecrated in the garbhagriha of this temple.

It is of interest to note that the Gudnapur inscription mentions a temple for Manmatha and some scholars equate Manmatha with Bahubali. Perhaps this temple can be identified as the one mentioned in the Gudnapur record. A copper casket with a lid in the form of a tortoise was found in the excavation. Thus the excavation has yielded very interesting data regarding the temple architecture of the early period at Gudnapura, close to ancient Banavasi of the early Kadamba period.

Lessons from Edgar de Picciotto

Edgar de Picciotto of Union Bancaire Privee

Edgar de Picciotto, an early promoter of hedge fund investing, passed away on Sunday 13 March 2016 after a long sickness. On November 12, 1969, de Picciotto opened his own asset-management bank in a city dominated by such well-known private banking names as Pictet Group, Lombard Odier, Darier and Hentsch.

Edgar de Picciotto founded Union Bancaire Privee (UBP) in 1969. UBP is one of the most favorably capitalized private banks in the world, and a leading player in the field of wealth management in Switzerland with $110 billion in assets under management at the end of December 2015. Edgar de Picciotto, who was born of Syrian-Lebanese parentage, moved to Switzerland in the 1950s and worked as a financier before founding UBP’s predecessor in 1969. From the bank’s inconspicuous headquarters on one of Geneva’s chief luxury-shopping drags, he built a customer base of affluent individuals and institutions all over Europe, the U.S., and the Middle East.

De Picciotto was born in Beirut and hailed from a lineage of businesspersons, which lived from the 14th to the 17th century in Portugal, moving in later centuries via Italy and Syria to the Lebanon. He afterward lived with his parents and brothers in Milan, ultimately deciding to study mechanical engineering in France. However, it was financial engineering, which took his perpetual fancy. He earned his spurs and made financial contacts, working in his previous father-in-law’s bank in Geneva. In its 2015 annual report, UBP recalled,

As our 2015 Annual Report was going to print, we learnt with deep sorrow that Edgar de Picciotto, the Chairman and founder of Union Bancaire Privee, had passed away at 86 years of age.

Edgar de Picciotto was a recognized creative visionary and pioneer in a wide variety of fields in the banking industry. He quickly rose to become a leading figure of the Geneva financial hub, and one of the most respected authorities on investments around the world.

In just a few decades, Edgar de Picciotto turned UBP into one of the world’s biggest family-owned banks. Very early on, he also set up a governance structure designed to ensure the Group’s longevity by integrating the second generation of his family into the business.

UBP is his life’s work. UBP is his legacy to us. It now falls to us to grow UBP with the same entrepreneurial spirit that he used to create the Bank, by perpetuating the values that Edgar de Picciotto would wish to see upheld every day and in everything we do.

Edgar de Picciotto’s children and all the members of UBP’s management are determined to carry on the spirit that its founder instilled in it, and they know that they can rely on the professionalism and dedication of all UBP’s staff members to continue to grow the Bank’s business, while also maintaining its independence.

In 2002, news of merger talks between two family-controlled private banks, Union Bancaire Privee (UBP) and Discount Bank & Trust Company (DTBT) over forming one of Geneva’s biggest private banks became newest sign of the altering attitude among the country’s private banks. Withdrawing from UBP’s operational management 20 years ago, de Picciotto set up a governance structure designed to guarantee the bank’s durability. His son Guy de Picciotto has been chief executive officer since 1998, while his daughter, Anne Rotman de Picciotto, and his eldest son, Daniel de Picciotto, are on the board of directors.

Byron Wien, vice chairperson of Blackstone Advisory Partners, had the pleasure of calling Edgar de Picciotto his mentor.

My purpose in reviewing Edgar’s thinking over the past 15 years is to show how he consistently tried to integrate his world view into the investment environment. That was his imperative. He wasn’t always right, but he was always questioning himself and he remained flexible. When he lost money, it tended to cause minimal pain in relation to his overall assets, and when one of his maverick ideas worked, he made what he called “serious money.”

Lessons from Edgar de Picciotto of Union Bancaire Privee

Edgar de Picciotto as a Mentor

Mentors fall into two categories: there are those you work with every day who are incessantly guiding you to enhanced performance. The ability to serve as a great mentor is one of the most undervalued and underappreciated skills in finance. Perhaps better branded as a “role model,” an outstanding mentor can provide not only a wide-ranging knowledge base and technical skills, but also the sagacious financial judgment that implies the high-class investor. Perhaps of even larger importance, a mentor can express a “philosophy of practice,” including the optimal interaction with clients and economists, a procedure for remaining current with advances in the field, and a thorough concept of how the practice of finance fits into a full life. A sympathetic mentor can also provide counselling in selecting the best practice opportunity and can maintain a close relationship for many years.

Mentors are significant to all of us, as they teach us what can’t be learned from books or in the classroom. They set aside a concrete example of “how to get it done,” and, sometimes more importantly, what to be done, when to do it, and whom to engage in the effort. Their inspiration often carries us through when nothing else does.

Understand the consequence of understanding the macro environment. “Many people describe themselves as stock pickers … but you have to consider the economic, social, and political context in which the stocks are being picked.” De Picciotto indubitably showed he had a good nose for trends.
Meet as many people of authority as you can. “For him, networking never stopped.” De Picciotto took great pleasure from knowing smart people and exchanging ideas with them.
“Nobody owns the truth.” De Picciotto would test his ideas on those he cherished and, and if he ran into a convincing conflicting opinion, he would contemplate on it seriously and sometimes change his position. While he never lacked principle about his ideas, he was unprejudiced and malleable.
Value the trust and the delight of friendship and the vainness of resentment. De Picciotto was gratified of his own success but also an enthusiast of the success of others who were his friends.
Never talk about overlooked opportunities except when you are disapproving yourself. Be your own harshest critic. Even if you are an intellectual risk taker, you will make many mistakes. Diagnose them early, but never stop taking risks, because that is where the tangible opportunities are and your life will be more invigorating as a result.

Buddhist Concept of Nirvana

An 18th century painting of a reclining Buddha during the transition from this world to nirvana

Nirvana is the Hindu/Buddhist concept of the state of enlightenment achieved when karma and craving are extinguished.

The concept of nirvana originated with the historical Buddha, Siddhartha Gautama (c. 563-483 BCE), during the sixth century BCE. Though Buddhism is grounded in Hindu philosophy, it is a heterodox approach to spiritual cultivation that eschews some of the core tenets of Hinduism, and the belief in nirvana epitomizes this philosophical shift.

The Sanskrit word nirvana literally translates as “snuffing out,” and refers to the eradication of the karma (a force generated by a person’s actions) and craving that bind an individual to the cycle of rebirth (samsara). One of the central ideas of Buddhism is anatman, which is a rejection of the Hindu notion that there is a permanent, essential self (the atman, or soul) that is one with ultimate reality. Because there is no self to whom karma can attach, Buddhism explains the transfer of karma using a candle metaphor: just as an old candle (one’s dying body) begins to peter out, its flame (karma) ignites the wick of a second candle (an infant’s body). Thus, karma is able to transfer without having to attach to a self. Nirvana occurs when one has reached enlightenment and eliminated ignorant attachment to false ideals, which snuffs out karma and allows one to exit the cycle of rebirth.

Theravada Buddhism divides nirvana into two stages, the awakening of the arhat (enlightened being) and parinirvana (the exit from samsara upon death), though practitioners in the Mahayana tradition take the bodhisattva vow to not enter nirvana until all sentient beings have been awakened.

Though nirvana signifies a key split from Buddhism’s Hindu origins, the concept has influenced Hinduism and is present in the 700-verse scripture the Bhagavad Gita, in which Krishna uses the concept of brahama nirvana to describe the state of liberation in which karma is eradicated and one has achieved union with Brahman (ultimate reality).

Value Investing: Philip Fisher on When to Sell a Stock

Common Stocks and Uncommon Profits, by Philip Fisher

Philip Fisher (1907–2004) is widely considered the pioneer and thought process leader in long-term value investing. Years after his death, Fisher

is widely respected and admired as one of the most influential investors of all time. Fisher developed his long-term investing philosophy decades ago

and discussed them in his seminal book, Common Stocks and Uncommon Profits. Common Stocks and Uncommon Profits was first published in 1958

and continues to be a must-read today for investors and finance professionals around the world.

Philip Fisher, Investor, Author of Common Stocks And Uncommon Profits Today, we will dig deeper into his selling discipline. For many investors, buying a stock is much easier than deciding when to sell it. Selling securities is much more difficult than buying them. The average investor often lacks emotional self-control and is unable to be honest with himself. Since most investors hate being wrong, their egos prevent taking losses on positions, even if it is the proper, rational decision. Often the end result is an inability to sell deteriorating stocks until capitulating near price bottoms.

Selling may be more difficult for most, but Fisher actually has a simpler and crisper number of sell rules as compared to his buy rules (3 vs. 15). Here are Fisher’s three rules for selling a stock:

Wrong Facts: There are times after a security is purchased that the investor realizes the facts do not support the supposed rosy reasons of the original purchase. If the purchase thesis was initially built on a shaky foundation, then the shares should be sold.
Changing Facts: The facts of the original purchase may have been deemed correct, but facts can change negatively over the passage of time. Management deterioration and/or the exhaustion of growth opportunities are a few reasons why a security should be sold according to Fisher.
Scarcity of Cash: If there is a shortage of cash available, and if a unique opportunity presents itself, then Fisher advises the sale of other securities to fund the purchase.

Many investors are reactive and sell at the same time everyone else does—when they’re fearful. But your emotions aren’t the best guide for making critical financial decisions. Long-term investors should not fear occasional swings in the market. When the market dips or takes an unusual turn, that is the perfect time to review your portfolio and re-evaluate your investing strategy.

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