Archives for 2016

Spotlight: If You Can’t Imagine, You Mustn’t Invest in the Stock Market

December 29, 2016 | Reading Time: 24 minutes | Leave a Comment |

Apart from observation and deduction, if there’s an important skill that an investor or analyst must bring to the table while making investment decisions, it is ‘imagination’. It is, after all, imagination that helps us make relevant connections that are not entirely obvious, between data or information about a business that may appear disparate at first.

Logic will get you from A to B. Imagination will take you everywhere. ~ Albert Einstein

First comes thought; then organization of that thought, into ideas and plans; then transformation of those plans into reality. The beginning, as you will observe, is in your imagination. ~ Napoleon Hill

Having a five-year-old means that I’m always attuned to what’s new in kids’ entertainment – whether it’s books, movies, or YouTube videos. So, while browsing through the video library on my laptop some days back, I came across this video that was created to celebrate the 150th anniversary of Lewis Carrol’s children’s classic, Alice’s Adventures in Wonderland.

The emphasis in this video was on the use of imagination. The first scene presented Alice and her entire family having a Her family endeavour to convince her otherwise, pointing to possible mundane things that can become magical in their opening song: the rabbits in the field, the father’s pack of cards, or a caterpillar (of course prefiguring some of the best-known scenes in the book). And sure enough, the white rabbit appears, prompting Alice to follow him down the rabbit hole.
[Read more…] about Spotlight: If You Can’t Imagine, You Mustn’t Invest in the Stock Market

Safal Niveshak’s 2016 Annual Letter to Tribe Members

December 28, 2016 | Reading Time: 16 minutes | 15 Comments |

Dear Tribe Member,

Trust you are doing great.

Here is a brief update on what transpired during 2016. It was another tremendous year for Safal Niveshak. The tribe has crossed 26,000 members. Our Twitter count has crossed 17,500 followers. We conducted five workshops during the year, meeting 120+ tribe members in the process.

The Mastermind Value Investing Course student count increased by 30%, while our premium newsletter – Value Investing Almanack (VIA) – which is about to complete two years, gained 25% new members, and has continued to receive some inspiring reviews from its subscribers. During the year, as part of the VIA, we interviewed a few wonderful value investors including Rajeev Thakkar, Jason Zweig, Samit Vartak, Kuntal Shah, and John Huber.

The idea to launch VIA in 2015 came from the need we felt of a detailed value investing newsletter in the Indian context, which had deep insights on the subject, business analysis, and interviews with practitioners of the art. We had always missed such a product in India, and could not find a better way to get it than to create it ourselves. The journey over the past two years of launching VIA has been inspiring for the breadth and depth of reading and learning we ourselves have done to bring our subscribers high quality content.

Anyways, in 2016, we also launched our first comprehensive e-book titled Mental Models, Investing, and You. This was just the first part of our collection of mental models notes we have written on Safal Niveshak so far (the second part releases in 2017), and received great reviews from readers. Despite our offer to people to get the e-book for free or pay as much as they wished, more than 850 people paid up, which was a much higher count than what we had expected.

Stock Talk (December 2016)

December 25, 2016 | Reading Time: 14 minutes | Leave a Comment |

Latticework Of Mental Models: Lucretius Problem

December 22, 2016 | Reading Time: 13 minutes | 9 Comments |

It was a Friday on March 11, 2011 when a massive earthquake with an intensity of 9 on Richter scale hit off the coast of Japan at 2:26 pm local time. The epicenter of the quake was 70 kilometer east of the Oshika Peninsula of Tōhoku.

The earthquake triggered powerful tsunami waves that reached heights of up to 40 meters. It took 50 minutes for the largest wave in the tsunami to arrive at the shores of Fukushima. What followed was something totally unimaginable and unexpected for those who take pride in taming the mother nature.

The Fukushima Daiichi nuclear power plant had six separate boiling water reactors, protected by a 10-meter-high seawall to prevent sea waves from entering the plant.

When the tsunami struck the Fukushima coastline, the gigantic waves easily overtopped the plant’s seawall. It took seconds to flood the basements of the turbine buildings and disabling the emergency diesel generators. Soon the backup generator building was also flooded. This resulted in an explosion and leakage of radioactive material to the sea water and created a huge nuclear hazard.

Why would the engineers and designers of Fukushima nuclear power plant build a wall only 10-meter high? What made them believe that the waves can’t breach the 10-meter height? [Read more…] about Latticework Of Mental Models: Lucretius Problem

InvestorInsights: Jason Zweig

December 20, 2016 | Reading Time: 32 minutes | Leave a Comment |

Jason Zweig is the investing and personal-finance columnist for The Wall Street Journal. He is the author of The Devil’s Financial Dictionary, a satirical glossary of Wall Street (PublicAffairs Books, 2015), and Your Money and Your Brain, on the neuroscience of investing (Simon & Schuster, 2007).

Zweig edited the revised edition of Benjamin Graham’s The Intelligent Investor (HarperCollins, 2003), the classic text that Warren Buffett has described as “by far the best book about investing ever written.” Zweig also wrote The Little Book of Safe Money (Wiley, 2009); co-edited Benjamin Graham: Building a Profession, an anthology of Graham’s essays (McGraw Hill, 2010); and assisted the Nobel Prize-winning psychologist Daniel Kahneman in writing his book Thinking, Fast and Slow. From 1995 through 2008 Zweig was a senior writer for Money magazine; before joining Money, he was the mutual funds editor at Forbes.