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51 Ideas from 2018

Dear Tribe Member,

Trust 2018 treated you well. It certainly was great for Safal Niveshak. The tribe crossed 53,000 members. I conducted seven value investing workshops during the year, including two in the US. Our Mastermind Value Investing Course and premium newsletter Value Investing Almanack continue to receive inspiring reviews from subscribers.

Anyways, right before the year ends, I thought I’d share a handful of ideas I’ve learned, re-learned, and wrote about in the past twelve months. Here are 51 of them categorized under investing, learning, and life. I hope you find these useful, as much as I did. [Read more…] about 51 Ideas from 2018

The Journey

“If all you care about is the mountaintop, the climb is going to be rough.” ~ Anon

“We enjoy the process far more than the proceeds.” ~ Warren Buffett

This is going to be one of the shortest posts I’ve written. One book that I keep by my bedside for frequent reading is Ruskin Bond’s A Book of Simple Living. Here is a passage that I stumbled upon from this book last night, and which resonated perfectly well with how I practice investing and one key idea I try to teach here – the focus on process vs outcome, on the journey vs destination.

[Read more…] about The Journey

Lecture Presentation and Notes: Surviving the Investing Game

I recently spoke at IIM Lucknow. My topic was ‘Surviving the Investing Game.’

Click here to download the presentation and notes, or read it in the panel below.

The 40th Lesson

I have a ritual of writing a note to myself on every birthday, and this is one of those for I complete forty years in my present state of existence on this Pale Blue Dot.

Life’s passing by too fast, or so it seems. I’m not usually one to make a big deal about my birthday, but as always, it has given me an opportunity to reflect.

“How in the world did that happen?” I asked my wife this morning as she woke me up from my slumber. It seems like yesterday I was twenty, just into college, and with no idea about where life was about to take me (still no idea!).

[Read more…] about The 40th Lesson

Alexa, How Can I Get Rich?

“Alexa, how can I get rich?” he asked staring at a speaker kept at a distance.

Nothing happened for a few seconds.

“Alexa! Alexa!” he shouted.

Nothing happened even then.

“Huh!” he blurted in frustration and went back to his playful ways.

This is a small conversation I heard of a 9-year old at our Camp Millionaire workshop in Mumbai on Sunday during a small break before we play musical chairs to explain kids the concept of demand and supply.

Well, the speaker on the other side of the intended conversation was not Alexa – virtual assistant developed by Amazon – but a plain one that operated on Bluetooth. But this 9-year old mistook it for one, and thus wanted to start a conversation to a get a quick response to his question. The question, however, sounded more like a command.

The Dagger of Debt

Archimedes — a Greek mathematician — was born in 287 BC in the seaport city of Syracuse, Sicily. Some consider him as the greatest mathematician of all time. Although he’s known for the discovery of Archimedes Principle, his often quoted for his famous saying —

Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.

While Archimedes did not invent the lever, his did extensive work on the usage of levers. Archimedes designed block-and-tackle pulley systems, allowing sailors to use the principle of leverage to lift objects that would otherwise have been too heavy to move.

A lever is a simple machine that amplifies an input force to provide a greater output force, which is said to provide leverage. There isn’t a single mechanical device in the world which doesn’t use the laws of the lever.

When people realized that leverage could magnify the effect of non-physical things too the first thing they tried it on was money. In the last few decades, the world of finance has taken Archimedes’ words literally.
[Read more…] about The Dagger of Debt

The Sixteen Silliest (and Most Dangerous) Things People Say About Stock Prices

The title of this post is inspired from Ch. 18 of Peter Lynch’s One Up on Wall Street, that reads – The Twelve Silliest (and Most Dangerous) Things People Say About Stock Prices.

For today, I have just added to and removed from Lynch’s list, and have illustrated the silliness using real-life examples of listed Indian stocks. None of what you see below portrays my view on any stock showcased in this post. These are purely examples, and that too from the benefit of hindsight. But they offer meaningful lessons.

Anyways, before you read ahead, please understand that I agree with what Morgan Housel wrote recently that people are not crazy in general. Just that they can…

…be misinformed. They can have incomplete information. They can be bad at math. They can be persuaded by rotten marketing. They can have no idea what they’re doing. They can misjudge the consequences of their actions.

I also agree with Charlie Munger who said that even smart people may have their ‘streaks of nuttiness’ that cause them to make occasional dumb remarks and decisions.

So, what follows below showcases just those moments of nuttiness and craziness that get a lot of people into problems in investing. I have experienced some of these moments myself, just that I have managed to survive to tell the tale. 🙂

Siddhartha’s Dilemma, Marcus Aurelius On Honest Men, And Bezos on Amazon

Here’s some stuff I am reading and thinking about this weekend…

Book I’m Reading – Siddhartha
Siddhartha is a beautiful novel by Hermann Hesse, first published in 1922 in Germany, that deals with the spiritual journey of self-discovery of a man named Siddhartha during the time of the Gautama Buddha.

The book follows this young man named Siddhartha on his journey to find the true meaning of life and peace. One passage that is particularly enlightening for me is when a ferryman, Vasudeva, the spiritual guide of Siddhartha, consoles him after the latter’s son (also Siddhartha) from a courtesan woman (Kamala) doesn’t seem to be interested in reciprocating well to his father’s love and advice, and seems like running away to a path of his own that looks dangerous to his father –

Fighting the Last War

Note: This post was originally published in the November 2017 issue of our premium newsletter – Value Investing Almanack (VIA). To read more such posts and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.

In Safal Niveshak’s Value Investing workshops, when we discuss the mental biases, we show the following video to our participants.

I would suggest that you pause here and watch this video before reading further.

It’s a test of your awareness so don’t cheat 🙂 [Read more…] about Fighting the Last War

From Darkness Unto Light

I was recently reading a story on the classical Greek philosopher, Socrates, who was tried and executed in 399 BC. He was tried on two charges – corrupting the youth, and impiety (perceived lack of proper respect for something considered sacred).

The Death of Socrates, by Jacques-Louis David (1787)

Socrates had done no such thing. What he had done was educate the youth, teaching them to challenge arguments from authority and question what they believed to be true.

In the process, he frustrated and embarrassed many powerful people with his constant line of questioning, known today as the Socratic method.