Archives for May 2021

The Limits of Numbers in Life and Investing

My son Chaitanya was born today, ten years ago. He was two months premature. His birth weight just 1.4 kg – 60% lesser than the average birth weight of 3.5 kg – and he spent the first three weeks of his life in an ICU.

We were not allowed inside the ICU for the risk of infection to the newborns, and so the nurse used to “display” our son from behind two glass doors for the first one week. Even my wife was not allowed entry to the ICU for the first week. Every time we asked how the baby was doing, the nurse would pull out her clipboard and dictate to us his ‘quantitative status’ – his heart rate, temperature, oxygen level, infection level, etc.

A week after Chaitanya’s birth, when my wife was first allowed to meet him, she realized he was lying still in his incubator which the nurse said was fine as he was too weak for any movement. Even his eyes were still. “He will be like that for a few more days, ma’am,” the nurse told my wife, “till he gains some strength.”

How I Invest (And Why You Should Not Care)

I tweeted this yesterday –

I keep my equity investing simple –

1. High quality + simple businesses only
2. Rarely buy, very very very rarely sell
3. Equal sizing of positions at cost
4. <15 stocks + <3 MFs
5. No AGMs, no concalls, only annual reports

Has worked really well for me for the past 18+ years.

— safalniveshak.com (@safalniveshak) May 26, 2021

The response the tweet received was beyond my expectations. Check out the tweet, a lot of questions people asked, and my responses. Hope they are of some help to you.

Two Monks and One Big Lesson in Life and Investing

Two Buddhist monks, a senior and a junior, were walking through the forest. They came across a river flowing through their path. To continue their journey, they had to swim through the river and cross to the other side.

There was a woman who was sitting at the bank of the river. She did not know how to swim and requested the monks to carry her to the other side.

Buddhist monks take a vow of celibacy. They are not supposed to even look at women, let alone carry them. The junior monk politely refused. But the senior monk put the woman on his back, swam across the river, and dropped her safely to the other side – without saying a word.

Image Source: Isha
The junior monk was aghast that the older monk had broken his vow but did not say anything. An hour passed as they traveled on. Then two hours. Then three. Finally, the agitated junior monk could stand it no longer, and asked, “Why did you carry that woman when we took a vow as monks not to touch women?”

One Important Reminder

Some moments just shake you up and lead you to reflect on the fickleness of life. It was one such moment for me two months back when I received news of the passing away of a dear friend, all of 42 years, of heart attack. He was an ex-colleague, my local train partner, and a close confidant. We had not met since the lockdown started in March 2020, but had planned to do so as things were opening up after the first wave of Covid. But that was not to happen. God had other plans.

If that was not all, I heard the news of another ex-colleague – the one whose place I had filled in my previous job – also in his mid-forties, passing away due to Covid-related complications.

“People are falling like nine-pins,” I said to my wife as we were talking about these two quick tragedies. “Each day seems like a toss of a coin. You’re here this moment and gone the next. And who knows when it’s our turn to go?”

“Doesn’t it all seem worthless?” I asked her expecting that she agrees. She nodded, though I was not sure if that was in agreement or disagreement.

A Marwari Mental Model to Make Quick Decisions

I come from a Marwari business family. My grandfather used to own mustard oil mills and multiple other businesses in West Bengal. My father, despite being a top-ranking engineer, had to join the family business. However, given the labour and power issues in Bengal, he along with his brother charted out into the sanitaryware and paints trading business, and then into marble and granite trading.

Now, despite hearing the business talks at home all day long, I was never really interested in joining the family business. Looking back, I think the reason for my lack of interest in business stemmed from me being on the slower side in understanding the fast calculations and having the razor-sharp acumen required to become the good business owner that most Marwaris are.

That is not to say that I did not learn some useful lessons, first-hand, seeing how my father and uncle went about doing their business.

The most important lessons revolved around the usefulness and preciousness of cash, which according to a Marwari, is the most important thing that matters in the business. Not just the quantum of cash, but also its velocity or the speed at which cash could be rotated or circulated.

Avoid Multiplying by Zero

The Sketchbook of Wisdom: The first print of my new book – The Sketchbook of Wisdom – is almost 90% over, and has already been bought across 30+ countries within 2 months of its launch. Click here to get your copy today. Send me an email at vishal@safalniveshak.com if you wish to place bulk orders.

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Peter Bevelin, in his wonderful book “All I Want To Know…” tells the story of Napoleon’s mother, Letizia. She couldn’t understand why Napoleon should take on the British since things were going so well. So, she sold all her French holdings and exchanged them for British pounds.

Why? She reasoned, if her son won, she should have a good life in the victorious nation. But if Napoleon lost, she would not be wiped out but still be ok since she had the pounds. She hedged against the possibility of facing a zero.

Letizia’s story is the perfect example of how to arrange our affairs in life to protect against the downside.