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Archives for June 2015

When I Took Warren Buffett’s Advice Very Seriously (It’s Not About Investing)

“I trust you Anshul. Would you want to work with me at Safal Niveshak?”

“I trust you Vishal. Yes, I would want to work with you at Safal Niveshak.”

“Welcome aboard, Anshul!”

…and thus ended the fastest ever interview I’ve ever been a part of. 🙂

Well, the reason I’m writing to you is to formally announce my partnership with Anshul Khare in taking the Safal Niveshak initiative forward.

And the reason I’m doing it today is because Anshul is now my full-time partner at Safal Niveshak, after having quit his well-paying job at a well-to-do startup.

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Latticework of Mental Models: Critical Mass

This article is the tenth of this weekly series called Latticework of Mental Models, which will be authored by my friend and partner in writing the Value Investing Almanack, Anshul Khare. Anshul will write on various mental models – big ideas from various disciplines – which can help you think more rationally while analyzing businesses and making your stock investment decisions.



It’s said that you can find extraordinary intelligence in nature. To unearth this brilliance, all you need is curious eyes and close observation. In that spirit, let me start today with the story of a Chinese bamboo tree.

Imagine that you were given few Chinese bamboo seeds and asked to grow them. You take the little seed, plant it, and start watering it. You add fertilizer and wait patiently for the seed to turn into a plant. You wait for a whole year, and nothing happens.

The second year you continue to water it and fertilize it, but still nothing happens. Looks like somebody is testing your patience.

The third year you water it and fertilize it, and the same story repeats i.e., no visible results. Many people would have given up on the tree by this time. But not you. At least not in my story.

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Overpriced

When I was looking to acquire the first client for my writing business in 2011, I had no idea how much to charge. I had no point of reference as far as content writing fee was concerned. For me, there were a few hours of work involved.

Anyways, to my first prospective client, I dared to ask for a hefty sum of Rs 2,500 per article, simply going by the understanding that you charge not for how much work it is for you, but how much the service is worth for the client.

It took me several clients to figure this out. My next client, I tried charging Rs 3,000 per article. He went for it. The next client Rs 3,500. The next client Rs 4,000. I kept charging more and more until finally three clients all turned down my Rs 5,000 fee. So I lowered the price back to Rs 4,000.

Essentially, at Rs 5,000, my prospective clients were telling me, “Your services are overpriced, and not worth it!”

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Latticework of Mental Models: Law of Small Numbers

This article is the ninth of this weekly series called Latticework of Mental Models, which will be authored by my friend and partner in writing the Value Investing Almanack, Anshul Khare. Anshul will write on various mental models – big ideas from various disciplines – which can help you think more rationally while analyzing businesses and making your stock investment decisions.



Outside of the closed glass chambers in the corporate world, there is another very unusual place where grand scheming about workplace strategies (read, office politics) happens regularly. Don’t worry, there is nothing hush-hush about this place and it’s not at all surrounded by thick soundproof walls.

Wondering what I am talking about? Let me give you another hint.

It’s the designated open area in every large company, where people go out in fresh air to fill their lungs with freshly brewed smoke. You guessed it right. I am talking about the smoking areas.

Mind you, it’s not just a place trafficked by the smoke billowing nicotine guzzlers, but you’ll often find those hapless passive smokers too who don’t realize that their lungs are going to collapse sooner than their active smoker buddies.

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7 Secrets of Warren Buffett’s Success (as per Charlie Munger)

In the 2008 shareholder meeting of Wesco Financial, a shareholder asked Charlie Munger to describe what caused Warren Buffett’s success.

“His success…is a lollapalooza,” Munger replied – a confluence of factors moving in the same direction.

Munger outlined the following seven key factors which combined together to cause Buffett’s success –

  1. Mental aptitude (Being seriously smart)
  2. Having great interest in the subject (“It’s very hard to succeed in something unless you take the first step – which is to become very interested in it.” ~ Sir William Osler)
  3. Early start (If something takes a long time to achieve, you better start early)
  4. Being a learning machine (Keep learning and learning)
  5. Reinforcement (Human beings work well if they get reinforcement – constant rewards for doing well, which drives you to do more of the same)
  6. Being correctly trusted by people
  7. Avoiding envy, jealousy, self-pity, vengeance, and extreme ideology

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Latticework of Mental Models: Kantian Fairness Tendency

This article is the eighth of this weekly series called Latticework of Mental Models, which will be authored by my friend and partner in writing the Value Investing Almanack, Anshul Khare. Anshul will write on various mental models – big ideas from various disciplines – which can help you think more rationally while analyzing businesses and making your stock investment decisions.



I was almost at the end of a beautiful evening drive. Refreshing cold breeze gently blowing on my face through the car windows coupled with minuscule traffic was like heaven on earth. Sporting an ear-to-ear smile I felt confident that nothing in the world had the power to take away my inner peace at that moment.

But, as usual, my faithful and ever reliable nemesis, the chaos-monkey, had different plans for me that evening.

Just when I was about to take a smooth turn on a closing traffic signal, a taxi cut me off while overtaking my car. The surprising rash maneuver from the taxi called for sudden brakes and by that time signal had turned red. As a result I missed my turn because of the insensitive driving by the taxi driver.

In the next few seconds, my Buddha smile turned into an angry frown and I was thrown out of my “appreciating the good things in life” mode.

Why did I feel so agitated? Well, for one, I was ahead of the taxi and it was me who was supposed to cross the signal first.

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When I Met the Legends of Investing – Part 4

“I have noticed one thing…” I told my wife, “…that whenever we are on a holiday, the stock markets take a nosedive.”

“Oh, you and your stock market!” she replied with expected frustration. “You always promise at the start of the holidays that you won’t look at stocks, but then…”

“Yes dear, you know I don’t look at daily stock prices while on a holiday or even otherwise, but the way stock prices are moving these days, I can’t help but take notice.”

“Forget it! Let me sleep now for we have a long day tomorrow touring the entire city.”

“Yeah, even I need a good night’s sleep,” I said, “…and possibly continue my dream of meeting the legends of investing who have guided me well in the past.

“Amidst this excessive stock market volatility, I surely need to get my thoughts re-aligned.”

And the dream follows…

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Latticework of Mental Models: Redundancy

This article is the seventh of this weekly series called Latticework of Mental Models, which will be authored by my friend and partner in writing the Value Investing Almanack, Anshul Khare. Anshul will write on various mental models – big ideas from various disciplines – which can help you think more rationally while analyzing businesses and making your stock investment decisions.



What’s your favourite day or time of the week? For somebody like me with a Monday-Friday job, the favourite part of the week usually is Saturday morning.

Now, what could be the best way to ruin a Saturday morning? Let me tell how I (almost) achieved the feat.

On a cool and breezy weekend morning when most people prefer to sit in the balcony and sip on a hot beverage, I was standing just outside my front door with milk packet in hand and toothbrush in my mouth, wondering why do they build these auto-lock doors.

Yes, you guessed it right. I managed to lock myself out of my house. Everything including my keys, glasses, cell phone, wallet, and slippers were behind the door which was slammed shut by the very same saturday morning breeze.

However the story had a happy ending when I was rescued by my saviour. Saviour? Yes and it was none other than our mental model for today – Mr. Red (short for Redundancy).

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