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Safal Niveshak Stream – October 26, 2016

Note to Readers: In Stream, we suggest worthwhile reading material on a variety of topics, not all of which are directly related to investing. Some of the articles require you to be paid subscriber of those sites. However, it is often possible to read such articles by going to Google News and searching for the article’s title.



Some nice stuff we are reading, watching, and observing during the middle of this week…

Life/Learning

  • (2100 words/9 minutes read): Do you know the three important life skills nobody ever taught you? Please don’t take it personally, be open to changing your long and dearly held beliefs and the most important one – get comfortable with uncertainty…

    When something tragic happens and you become horribly hurt, as much as your pain has you absolutely convinced that this must be about you, remember that hardship is part of choosing to live, that the tragedy of death is what gives meaning to life, and that pain has no prejudice — it afflicts us all. Deserving or not deserving isn’t part of the equation.

    When you decide to change careers, there’s no one there telling you which career is right for you. When you decide to commit to someone, there’s no one telling you this relationship is going to make you happy. When you decide to start a business or move to a new country or eat waffles instead of pancakes for breakfast, there’s no way of knowing — for certain — if what you’re doing is “right” or not.

    Developing the ability to simply do things for no other reason than curiosity or interest or hell, even boredom — the ability to do things with no expectation for result or accolade or productivity or fanfare — will train you to better make these big ambiguous life decisions. It will train you to simply start on something without knowing where in the hell it’s going.

  • (1700 words/7 minutes read): Brain Pickings is one blog that I follow religiously. It’s author Maria Popova recently shared her 10 learnings from 10 years of running this blog, including this one…

    Don’t just resist cynicism — fight it actively. Fight it in yourself, for this ungainly beast lays dormant in each of us, and counter it in those you love and engage with, by modeling its opposite. Cynicism often masquerades as nobler faculties and dispositions, but is categorically inferior. Unlike that great Rilkean life-expanding doubt, it is a contracting force. Unlike critical thinking, that pillar of reason and necessary counterpart to hope, it is inherently uncreative, unconstructive, and spiritually corrosive. Life, like the universe itself, tolerates no stasis — in the absence of growth, decay usurps the order. Like all forms of destruction, cynicism is infinitely easier and lazier than construction. There is nothing more difficult yet more gratifying in our society than living with sincerity and acting from a place of largehearted, constructive, rational faith in the human spirit, continually bending toward growth and betterment. This remains the most potent antidote to cynicism. Today, especially, it is an act of courage and resistance.

    [Download PDF of this Issue of Stream]

  • (1 minute read): Isn’t it quite common for celebrity sports people to have strange superstitions? At least that’s what the world believes but what looks like superstition to an ignorant spectator is actually a scientifically proven mental trick to put the mind into an optimal state. Excerpt from Rafael Nadal’s autobiography Rafa: My Story

    Excerpt from Rafael Nadal’s autobiography

Investing/Stock Market

  • (11 minutes watch): He’s young, he’s smart, and he’s one of the best value investors in India with a vast repository of wisdom I know of from among the contemporary ones. It was a pleasure watching Kuntal Shah’s recent interview with Ramesh Damani. Here’s how Kuntal talked about his learning from mistakes…

    The years of investing journey has taught me that sometimes the biggest enemy of investor is investor himself. While biblical era has taught us seven sins and with the compounding and the complexity of the current investment life the number of sins have multiplied, there are three sins I would like to particularly focus on and which are at the extremities of human emotions namely the fear of losing out on opportunity or losing capital, which results during the time of extreme pessimism in the market. The greed of missing out on the opportunity or compounding of capital, which typically happens at the bull end of the spectrum.

    Click here to watch the video of this interview.

  • (2570 words/11 minutes read): Our financial errors vary by age. Here’s a look at the biggest money mistakes we make – decade by decade. Like, here’s the mistake most of those in their 30s make…

    What 30-somethings forget is that it took their parents decades to build up to that stage, she says. Trying to live too large can lead to credit-card debt, and spending instead of saving means missing out on compounding interest. “Early on, you may live more like a recent graduate student than the overly romanticized images we see in TV and movies,” she says.

    What’s more, finances overall are more complicated than in the past. Today’s 30-somethings have more options than previous generations in their age bracket. But that doesn’t mean they’re prepared to tackle the complexity. And that’s where the mistakes come in.

  • (950 words/4 minutes read): Walter Schloss was one of Warren Buffett’s ‘SuperInvestors of Graham-And-Doddsville,’ a select group of devout Graham disciples who made money buying deep value securities. While the rest of the financial word chased hot growth stocks in the 1980s, 90s and 2000s, he stuck to his deep value roots and generated huge returns. Here is a post that captures a large part of Walter Schloss’s simple investment philosophy

    I’m not very good at judging people. So I found that it was much better to look at the figures rather than people. I didn’t go to many meetings unless they were relatively nearby. I like the idea of company-paid dividends, because I think it makes management a little more aware of stockholders, but we didn’t really talk about it, because we were small. I think if you were big, if you were a Fidelity, you wanted to go out and talk to management. They’d listen to you. I think it’s really easier to use numbers when you’re small.

Reading/Thinking

  • (1 minute read): The real key to being creative lies in what we do with our knowledge. Excerpt from the book Whack On The Side Of The Head

    Whack On The Side Of The Head

  • (6160 words/30 minutes read): Jared Diamond, the author of the brilliant book Guns, Germs & Steel on how to get rich

    I propose to try to learn from human history. Human history over the last 13,000 years comprises tens of thousands of different experiments. Each human society represents a different natural experiment in organizing human groups. Human societies have been organized very differently, and the outcomes have been very different. Some societies have been much more productive and innovative than others. What can we learn from these natural experiments of history that will help us all get rich? I propose to go over two batches of natural experiments that will give you insights into how to get rich.

  • (1400 words/6 minutes read): Charles Darwin was not a man of pure IQ, yet his “thinking work” outclassed almost everyone. Farnam Street captures Darwin’s reflections on his own mind

    He[Darwin] did not have a quick intellect or an ability to follow long, complex, or mathematical reasoning…His life also proves how little that trait matters if you’re aware of it and counter-weight it with other methods…He did not feel easily able to write clearly and concisely. He compensated by getting things down quickly and then coming back to them later, thinking them through again and again.

Business

  • (2500 words/11 minutes read): Cyrus Mistry’s ouster from Tata Group and the surrounding conspiracy theories aren’t news anymore. But it should be interesting to know how the group’s top companies fared during his reign. Combine this with Economist’s recent take on the Tata Group

    Upon retirement, Mr Tata publicly called for his successor to target $500 billion in revenues by 2021, a figure that group executives say is still on the cards. Mr Mistry has shown some signs that he knows what needs to be done. For the moment, however, he appears dangerously content just to sit atop what has grown into an impressive but lumbering pachyderm.

  • (1530 words/7 minutes read): With the growing use of smartphones to access Internet, social media and news, telecom firms are optimizing their multiple networks and investing in IT tools to improve services. Here’s a post that covers how data demand is causing a big shake-up in telecom firms’ business models

    Some of the telcos are looking for a radical transformation of their business in order to look like a digital enterprise. This is a complete transformation of their relationship with their suppliers and customers. Others are looking towards more incremental changes. There is a whole range of different approaches that the operators have and, of course, some of it is driven by where they see themselves (in the foreseeable future).

  • (2100 words/9 minutes read): On the verge of challenging Apple’s mobile phone dominance, Samsung made a rushed decision, based on incomplete evidence, that later forced it to kill the model. Here’s the fatal mistake that doomed its Galaxy Note

    …the problem lay with Samsung SDI’s batteries, these people said. They argued it was more important for Samsung to do “the right thing” and act, in the words of one of the people familiar with the matter, rather than wait for more information. Doing so would have left customers in the dark longer and potentially allowed the crisis to get worse.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.

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