Free Stock Analysis Excel

Latticework of Mental Models: Fundamental Attribution Error

The first impression is the last impression. I am sure you’ve heard this advice numerous times especially from the communication skill experts. But the more I studied psychology, stronger became my belief that there’s quite a bit of truth in this saying. However, if you’re into the business of working with people, it’s the first impression you shouldn’t trust.

Had I gone with my first impressions about some of the strangers I met in my life, I wouldn’t have found my best friends. If you look back in your life and trace the history of your relationships with your best buddies, you would tend to agree with me on this. In fact, go ahead and ask your old friends about how they thought of you (in the first meeting) as a prospective candidate for a long-term friendship.

Whenever we meet someone for the first time, we have a natural tendency to attribute his behaviour to his personality. If that stranger’s behaviour is cold and unresponsive, we jump to the conclusion that he is either shy or introvert or perhaps arrogant. Whereas an individual who seems warm and lively makes you believe that the guy is an extrovert.

Sometimes you may be right, but often you are falling for what is known as the Fundamental Attribution Error. This error is the result of people’s tendency to place an overemphasis on internal characteristics (personality) to explain someone else’s behaviour in a given situation rather than considering the external factors guiding that situation.

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Imagine It’s September 2007

Imagine it’s September 2007. The world seems safer, for we have not seen much of Donald Trump or Kim Jong Un. We have an opportunity to trademark brands like Uber, WhatsApp, Quora and Instagram as they do not even exist. Twitter and iPhone are less than a year old. Steve Jobs, Robin Williams, and Michael Jackson still walk the planet.

Imagine it’s September 2007. Bear Stearns and Lehman Brothers are still in business. Ramalinga Raju, along with his accountants, is still creating fictitious cash at Satyam. The market caps of Eicher Motors and Page Industries are less than 2% of what they would be ten years later. And those of DLF and Suzlon are 6x and 24x respectively of what they will be when you are ten years older. The BSE-Sensex is just four months away from peaking before crashing by 50%, though it is still 50% of what it will be after ten years.

When I imagine it’s September 2007, I am ten years younger, and stupider. I am busy writing stock recommendation reports for my employer, whom I am going to leave in another three years. The idea of Safal Niveshak does not exist in my, or anyone else’s, mind. Nobody knows me or trolls me (wow!).

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Annual Report Review: Info Edge

Here is my review of the FY17 annual report of India’s leading online classifieds company, Info Edge. Click here to download the PDF review (7 MB file), or click the image below. Let me know your thoughts and questions on this review in the Comments section of this post, plus any additional thoughts from your […]

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The J-Curve Model of Thinking, Living, and Investing

My friend Ravi came home for lunch last weekend. He looked dejected. “It’s a bull market, Ravi!” I said trying to cheer him up, but he was in no mood to give away his dejection. “I’m nearing forty, Vishal, and that makes me depressed.” “Why Ravi? You should be happy that you’ve already left your […]

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My Stock Valuation Manifesto

I had released my Investor’s Manifesto couple of years back. Now, here is my fifteen-point stock valuation manifesto that I penned down a few months back though I have been using it as part of my investment process for a few years now. It is evolving but is something I reflect back on if I […]

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Annual Report Review: Symphony

Here is my review of the FY17 annual report of India’s leading air cooler company, Symphony Ltd. Click here to download the PDF review (5 MB file), or read it in the panel below. Let me know your thoughts and questions on this review in the Comments section of this post, plus any additional thoughts […]

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The Dhandho Investor’s Guide to Calculating Intrinsic Value

One of the best books I’ve ever read on investing, and one written in a simple language, is Mohnish Pabrai’s The Dhandho Investor. Mohnish explains in the introduction – Dhandho (pronounced dhun-doe) is a Gujarati word. Dhan comes from the Sanskrit root word Dhana meaning wealth. Dhan-dho, literally translated, means “endeavors that create wealth.” The […]

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Annual Report Review: Avenue Supermarts (D-Mart)

Here is my review of the FY17 annual report of India’s leading value retailer, Avenue Supermarts, which owns and operates the D-Mart brand of stores. Click here to download the PDF review (4 MB file), or read it in the panel below. Let me know your thoughts and questions on this review in the Comments […]

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