Archives for December 2023

23 Ideas from 2023

The best investment you can make is an investment in yourself. ~ Warren Buffett

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Right before the year ends, I thought I’d share a handful of ideas I’ve read, learned, re-learned, and wrote about in the past twelve months. Here are 23 of them, in no particular order of importance. I hope you find these useful, as much as I did.

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Why You Must Not Quit Your Job to Become a Full-Time Investor

The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life

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Short view – It could get lonely and frustrating, plus dangerous for your sanity and financial well-being.

Long view – First, a clarification. I am not a full-time investor i.e., I and my family are not dependent for our living on the stock market. I earn my living by teaching people how to invest sensibly in stocks and how not to blow it up as an investor, and by selling books. And I invest a large portion of my savings in stocks. But I won’t have sleepless nights if the stock market were to tank tomorrow and remain down for the next year or two, because that is not what earns me my oats and sprouts (I don’t eat “bread and butter” you see).

Anyways, the reason I am writing this post is because this is that phase in the market where I see a few questions from readers about how they could quit their jobs to become full-time investors in the stock market.

In most of my replies, I have asked people to avoid quitting their jobs to become full-time investors, and here are five reasons I have often mentioned to support my reasoning. In case you have had this question but were afraid to ask, I hope what follows below helps you take a decision.

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Dealing with the Unknown Risks in Life and Investing

In the world of investing, risk is an ever-present companion. We spend countless hours analyzing data, studying market trends, and crafting meticulous strategies to mitigate known risks. Yet, as the legendary investor and co-founder of Oaktree Capital, Howard Marks, once famously stated –

Risk is what’s left over after you think you’ve thought of everything.

This sentiment is a stark reminder that in the unpredictable world of investing, there are always unknown and unexpected risks lurking in the shadows.

Today, I share with two compelling stories told by Marks and another noted investor Joel Greenblatt, to shed light on the importance of acknowledging the existence of these hidden dangers and surprises, especially when you are sure that no such surprises exist.

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The Dark Room of Investing Success

Growing up in the 90s, and before digital cameras became common, one of my most precious possessions was a Kodak roll camera.

It was a simple box camera that came loaded with a 36-exposure roll of film (if I remember that correctly). When the roll was finished, the camera or the roll was handed to a photo studio for processing.

My friend’s father had a photo studio that was one of the best in town and where I got my photos developed. The studio contained a dark room (called ‘darkroom’) that no one was allowed to enter, which was typical of any photo studio those days.

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The 45th Lesson

Life’s passing by too fast, or so it seems. I complete 45 years in my present state of existence today. That’s more than three-fifths of the average life expectancy of an Indian male.

Now, while spiritualists would want me to believe that I have existed from anadi (before the beginning of cosmos) and will exist till ananta (infinity), I see forty-five years as a good enough time to find some meaning in one’s life. At least, my rapidly greying hair and receding hairline help me realize that.

Now, while it amazes me that I’ve been around that long — I feel like I’ve barely begun (except when I look at the actuarial table).

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The Charlie Munger Investing Manifesto

Close on the heels of The Charlie Munger Manifesto, which contains his most important rules for living a good life, and avoiding bad outcomes, here comes The Charlie Munger ‘Investing’ Manifesto, which lays down some of his most profound ideas on becoming a wiser investor.

Click here to download the manifesto in high resolution.

Click here to download the manifesto in high resolution.

Read it. Print it. Frame it. Face it. Remember it. Do it.

And if you find value in it, please share it.

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You can never get enough of Charlie. And so, in his memory, and as part of The Inner Game podcast, I am launching a new series titled “The Munger Method” on his unforgettable speech titled “The Psychology of Human Misjudgment.”

In The Munger Method, I am going to try and dissect Charlie’s timeless wisdom from that speech and break it down into bite-sized, easy-to-understand podcasts.

Click here to watch the introduction episode.

You can also find this series and all past episodes of The Inner Game podcast on Apple Podcasts, Spotify, Google Podcasts, and Amazon.

Hope you like them and find some value. Please let me know your feedback and/or suggestions for improvement. Thank you.

Archives for December 2023

The best investment you can make is an investment in yourself. ~ Warren Buffett

Become a wiser investor in just 5 minutes