22 December 201722 December 2017 / / Outlook BUSINESSOutlook BUSINESS88
B Y C H E TA N PA R I K H
CO-PROMOTER JEETAY INVESTMENTS AND
DIRECTOR, JASMINE INDIA FUNDThe agony of hesitation
A
ugustine of Hippo, whose writings infl uenced the development of Christian-
ity and Western philosophy, wrote in his book, Confessions, about his struggle
with doubts and temptations on his conversion to Christianity. He called this the
‘agony of hesitation’.
Investors may well have experienced a diff erent form of the ‘agony of hesitation’ because doubt is
a soulmate in a world of chance. Here are a couple of current personal examples.
Moats can never be clearly visible through the smog of capital misallocation. Peer through the
haze and one thing is clear — a company such as General Electric (GE) could not have had a distin-
guished 100 -year existence without a signifi cant moat. That heritage includes a formidable founda-
tion of installed industrial equipment spanning areas as diverse as aerospace, power and health-
care, cocooned in a digital ecosystem. The growing service revenue stemming from maintenance,
repairs and upgrades led to deep customer relationships, customer captivity and switching costs.
The very scale at which GE operates leads to economies of scale and its recent stated commitment
to cost control and proposed shedding of assets of $ 20 billion should, hopefully, translate into a
more focused and leaner organisation.
GE has pioneered many technologies in the past. Competitors may have better operating margins
on comparable R&D percentage spends, but GE benefi ts from its ability to use products from newPerspective
Moats can never be clearly
visible through the smog of
capital misallocation and
technological disruption even
for iconic companies such as
GE and Disney