Safal Niveshak

Wit. Wisdom. Value Investing.

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Archives for September 2022

Charlie Munger on Inflation, Envy, and Why Investing is Going to Get Harder

In an interview recently, Charlie Munger warned about the biggest inflationary bubble in world history bursting and shared his thoughts on how it is going to unfold. He elaborated on the difficulty of building wealth for the young generation of today compared to his. Charlie said that we’re flirting with serious trouble and the consequences may be worse than what Paul Volcker was dealing with in the 1970s.

Here is the transcript I have prepared based on what Charlie said.

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How to Judge The Quality of Your Decisions (Hint: It’s Not by Outcomes)

One peculiar but common way our brain works is that we often remember what’s easily available to us, and see what’s easily visible.

So, we conclude that the stock trader who is rich must know what he is doing. In the same way, an investor who uses leverage to increase his bets and in the process magnifies his returns is also considered a role model.

In business, a CEO who borrows a lot of money to make acquisitions and in process turns his business bigger in quick time, also seem to be doing the right things (at least when times are euphoric).

In effect, the general belief is that if the outcome is good, the process and decisions made to arrive at that outcome must have been sound. Right?

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The Intangibles of Assessing Management Quality

I read a column on Forbes sometime back that contained a narration from one Nancy Ortberg, who was once a nurse at a hospital emergency room in California.

In her story, Nancy described something astonishing that she witnessed in the emergency room.

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[Notes] Howard Marks on the Illusion of Knowledge

Howard Marks, co-chairman of Oaktree Capital Management, recently published his latest memo titled ‘The Illusion of Knowledge’, where he not only questioned the value of macro forecasts, but also explained why creating profitable forecasts is so difficult. He makes it clear that forecasting mostly provides the illusion of knowledge, and argues that investors are better off accepting reality — that the macro future is largely unknowable  — and focusing on what they can know.

I have compiled some notes and highlights on the memo.

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The ‘Art’ of Investing (Video)

I recently presented to Prime members on the ‘art’ of investing, where I showcased my illustrations to emphasize the idea of long term investing and the key attributes that investors need to work upon to behave well in their pursuit of wealth creation.

Here are just a few topics I covered in my presentation –

  • Is investing as simple or as difficult as it is made out to be
  • Most important attributes we need to become a successful investor
  • How to do well as an investor despite market corrections and recessions
  • Why value investing works
  • Dangers of blind long term investing
  • Is investing a game of luck or skill
  • How to protect ourselves against our own ego
  • Are there any iron clad laws in investing
  • Why stock market is a great humiliator, and how to avoid getting humiliated most of the time
  • Basics of my stock selection framework
  • How to think like a business owner
  • Idea of financial independence
  • Most important advice for wealth creation

Here is the video of my presentation and the Q&A session that followed.

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If you are not a member, please consider joining the Mastermind Membership to access my most comprehensive value investing course, plus practical, time-tested ideas in investing, human behaviour, business analysis, and decision making, and get onto the path of becoming a better version of yourself.