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.

The need to save every single rupee because that could be useful in the future was another key lesson I learned. That came from a Marwari’s immense respect for hard-earned money and its usefulness as a business resource in time of need than extreme miserliness.

Outside of money lessons and patience (we are generally an extremely patient lot), one of the most important ideas that I picked up from my father’s business talks and thought process was that of ‘mota-moti,’ which means ‘more or less.’

Mota-moti is like a ‘generally accepted accounting principle’ taught in the Marwari business school (call it the ‘Marwari GAAP’). It involves lump-sum calculations and approximations of a business opportunity based on the ‘affordable loss’ principle, which means a small loss or downside that you can afford, one that is bearable in the pursuit of a probable large gain or upside.

Marwaris use this rule of thumb of mota-moti in many decision situations to get over inertia. And we do not need elaborate excel sheets or long accounts to make these decisions. Just a sheet of paper and some quick mental calculations work. Because all we need is a mota-moti idea of what will work and what will not.

This rule of thumb helps in killing failures early and cumulate success by leveraging on what works. The rationale is to make quicker, though not reckless, decisions in a competitive environment.

The idea of mota-moti has been so much ingrained in my psyche that when Ben Graham or Warren Buffett talked about being approximately (mota-moti) right than precisely wrong while analyzing businesses or estimating their intrinsic values, I picked it up without an iota of doubt. And now my analysis and intrinsic value estimates are often back of the envelope. I am also fine working with less than enough information on businesses that look mota-moti clean and good. But I also ensure that my investment decisions are based on the affordable loss principle, and so I avoid businesses where I can lose big (more than I can afford) or that I do not understand.

Outside investing, I have tried mota-moti in my school Math class, but my teacher was not impressed. She wanted precise answers, and often I had no clue how to get them. And so I left Math at the first opportunity. But this idea has helped me in many other areas of life. My wife (also a Marwari) agreed to marry me because I was mota-moti fine. I picked up the job after college that looked mota-moti good to me. I quit my job to start Safal Niveshak because, mota-moti, it presented a low downside – high upside opportunity. I trust people who look mota-moti good in their words and actions. Ask me “How’s life?” and you will get a response, “Mota-moti, it’s good.”

Mota-moti is a great mental model (a Marwari’s contribution to Charlie Munger’s latticework) to look at businesses and life.

Things are never perfect. But if they are mota-moti good, you are lucky. Stop complaining and move forward.

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