Here’s the first issue of Poke the Box, Safal Niveshak’s new e-letter on money, investing, and human behaviour, which will be delivered to your mailbox every Saturday morning.
Sign up here to receive the newsletter in your email, and get ready for stimulating Saturday mornings.
Let’s Start with Safal Niveshak
Just in case you missed any of this on Safal Niveshak over the last few days…
- I asked where all Safal Niveshak Tribesmen have gone? Well, a lot of them are still there, as the comments show. 🙂
- Announced the August launch of a one-year course to help you reinvent the way you invest, work, and live. Pre-registrations have closed, but you can still take a look at what’s coming.
- Announced StockTalk 2.0 to combine the intelligence of the Safal Niveshak tribe to do what Warren Buffett did 40 years ago. The first issue will reach you this coming Monday.
- An amazing video that showcases the father of value investing Ben Graham giving a lecture (yes!), and also shares his students’ views on the legacy of the legend.
In other words, all things being equal, the best solution to a problem is usually the simplest one.
In investing, simplicity is the way to long term success. As Warren Buffett says – “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
While analyzing stocks, it pays to avoid businesses where a lot of hypothetical situations must go right for future success. Thus, search for simpler business that require fewer assumptions and hypothetical scenarios to work out for them.
I often wonder why does our society appear to be increasingly embracing the complex way of life, when “the simple way” clearly leads to awesome wealth and happiness?
As an investor, I am pretty sure if you can avoid complexity, you would do wonders. In fact, the principle of Occam’s Razor is an intelligent investor’s best friend. Having a simple investment philosophy would mean more time for life outside of investing!
If you need inspiration, here’s something from the world’s best behavioural scientist, Professor Daniel Kahneman, who follows a simple financial plan for himself – “Keep it simple and aim to beat inflation. Don’t try to beat the market. When it comes to investing, less is more. And if you try to do more, you’ll often end up with less.”
Leonardo Da Vinci said, “Simplicity is the ultimate sophistication.”
Anyways, while Occam Razor is very useful, it should not be seen as a substitute for good empirical testing. It relies on subjective assessment of simplicity, rather than an objective tests in evaluating arguments.
So, as Newton said, try to make things simple, but not simpler. 🙂
Book Worm
I am re-reading Seth Klarman’s “Margin of Safety”, and here’s an important part I touched upon again…
Warren Buffett likes to say that the first rule of investing is “Don’t lose money,” and the second rule is, “Never forget the first rule.”
I too believe that avoiding loss should be the primary goal of every investor. This does not mean that investors should never incur the risk of any loss at all. Rather “don’t lose money” means that over several years an investment portfolio should not be exposed to appreciable loss of principal.
While no one wishes to incur losses, you couldn’t prove it from an examination of the behavior of most investors and speculators. The speculative urge that lies within most of us is strong; the prospect of a free lunch can be compelling, especially when others have already seemingly partaken.
It can be hard to concentrate on potential losses while others are greedily reaching for gains and your broker is on the phone offering shares in the latest “hot” initial public offering. Yet the avoidance of loss is the surest way to ensure a profitable outcome.
Stimulate Your Mind
Here’s some amazing content I read during the week gone by…
- What Warren Buffett would change if he ever edited Ben Graham’s The Intelligent Investor?
- Prof. Sanjay Bakshi on why you should stop associating value investing with low P/E multiples. Just like Buffett did.
- Do you know what differentiates the world’s best investor from 98% of CEOs?
- How you can become the luckiest person on the planet?
- Top 10 things you should be informed about in life.
When we explore for ideas and information, sometimes we find things that are better or more exciting than what we were originally looking for. Thus, we need to keep our minds open to unsought-for possibilities.
Think of the times in your own life when one thing has led to something entirely different. How did you get interested in your line of work?
How about the times you’ve opened a particular book in search of a specific idea, and then found something even better in the inside pages?
As noted author Franklin Adams wrote – “I find that a great part of the information I have was acquired by looking up something and finding something else on the way.”
Inventor Charles Kettering said, “There will always be a frontier where there is an open mind and a willing hand.”
So, the next time you meet something unexpected, don’t ignore it. Instead, pay special attention to it. It may be a better idea God might have for you.
Idea Source: Roger von Oech’s Creative Whack Pack
Sign up here to receive Poke the Box in your email, and get ready for stimulating Saturday mornings.
Keep poking.
Get drenched in the rain.
Make time for yourself.
Be happy.
Till next weekend…
Vishal Khandelwal
Chief Poker – Poke the Box
A good documentary on human misbehavior.
Thanks for sharing this, Rajesh.
Dear Vishal,
You got your Mojo back :). The curiosity and zest with which you are executing Franklin Adams’s thoughts, is boon to people like us who are getting most of the information on Safalniveshak, which we have tried and not found elsewhere.
Great work, keep enlightening us !!
Regards
Akhilesh
Thanks for your kind words, Akhilesh. 🙂
Hi Vishal,
How can you write so much and so beautifully? Why don’t you teach us this Art of Writing and Creating something new every time? Your content is like a rainbow which has all the colors at one place 🙂
I’m currently reading Ryan Holiday’s posts on reading and though he actually tells you how he reads and digests the books, I find it easier to read your posts.
I’ve a question: How can you make difficult things simple for us?
Please throw some light on it, as I can’t wait to attend your Copywriter’s workshop 🙂
Best,
Avadhut
Thanks Avadhut! Will try and write a post on that. 🙂
Thanks for this post Vishal,
Excellent as usual. I believe simplicity is the best policy, however, like most people struggle to adhere to its tenets most of the time. Therefore this was refreshing to read.
Keep poking!
Abhishek.
Thanks Abhishek!
Thanks for the new initiative. Many insightful articles to read.
Thanks Mukul!
hello Vishal ji,
i regular read and re-read all your post….but this one “poke me ” is simply mind blowing….
particularly “stimulate the mind” session is mind blowing….and stretches an individual’s limit everytime he read this article.
all the best for your upcoming post….very good work taken up by you…keep up the great work….kudos to you…:-)
Vishal, I have been visiting many investment blogs.i wont think twice to say that yours is the most informative among all. i look forward to new posts from you. Keep up the good work
Hi Vishal,
Poke the box is awesome. This is a treasure trove indeed.
thanks
Many thanks, Kalidasa!