Archives for August 2018

Being Vulnerable

August 31, 2018 | 4 Comments

Value Investing Workshop in Bangalore (9th Sept – Sold Out), Chennai (23rd Sept), Mumbai (30th Sept), Hyderabad (7th Oct). Click here to register now. Few seats remain!

I was 23, straight out of college, when I came to Mumbai in 2001. I had come from a small town in Rajasthan with a population of under 2 lac, or 0.02 crore. Mumbai was 80 times more crowded, and I was scared.

I had just accepted a seat at an MBA college in this city, and my father had paid the fee. So, there was no looking back. Now when I think back about those times, it was quite possibly the most intimidating situation I had ever gotten myself into thus far.

But I did not want to be a quitter, so I stayed, struggled to get along with the city and its people, and still stayed.

In the first few weeks at college, I flunked more than half of my classes as I was too shy and scared to be out of my accommodation and onto the crowded roads and public transport and then into my class of ‘city’ students.

I never felt as vulnerable in my life as then.

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Being A Father

August 27, 2018 | 11 Comments

Welcome to the first edition of Outside the Box, Safal Niveshak’s new, free newsletter.

Now, what’s new here? Well, this newsletter will not be authored by me (you must be thanking goodness!), but a few of my friends in the value investing circle.

I have been connected to these people over the past few years, and highly respect their thoughts and ideas about investing, decision making, learning, and life in general.

Now, who are these people? In an alphabetical order, they are – Arpit Ranka, Gaurav Sud, Jatin Khemani, Neeraj Marathe, Ninad Kunder, Samit Vartak, Shyam Sekhar, and Vitaliy Katsenelson.

While these gentlemen are well-known in the value investing circles, I would introduce them better as we move forward and also have a few others join in.

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The Books That Made Me – Part 3

August 23, 2018 | Leave a Comment

Value Investing Workshop in Bangalore (9th Sept), Chennai (23rd Sept), Mumbai (30th Sept). Click here to register now. Few seats remain!

This is the third part of the series on books that have inspired me the most. Read Part 1 and Part 2. Here are the books I have profiled so far –

1. Life and Living

The Bhagavad Gita (~ 200 BC)
Autobiography of A Yogi (1946)
Man’s Search for Meaning (1946)
Who Moved My Cheese (1998)
Jonathan Livingston Seagull (1970)
Meditations (~ 180 AD)
One Small Step Can Change Your Life (2004)
How to Stop Worrying and Start Living (1948)
As a Man Thinketh (1903)
The Alchemist (1988)
Anne Frank: The Diary of a Young Girl (1947)

A Hidden Cost Called Rented Suit Liability

August 21, 2018 | 11 Comments

Value Investing Workshop in Bangalore (9th Sept), Chennai (23rd Sept), Mumbai (30th Sept). Click here to register now. Few seats remain!

Lloyd’s of London, a 300-year-old insurance body, collects more than 33 billion pounds in gross premium every year. Its history goes back to the 17th century.

In 1906, when a major earthquake destroyed more than 80 percent of the Californian city of San Francisco, Lloyd paid out all the policyholder claims, irrespective of the terms of their policies. That cemented Lloyd’s reputation in the American market.

However, in the 1990s, this insurance behemoth was brought to its knees by a risk that had gone unnoticed for decades. After California earthquake episode, Lloyd started underwriting wide-ranging general liability cover to US businesses, including asbestos manufacturers.

Thousands of employees who had worked in asbestos plants were diagnosed with asbestosis, a deadly lung disease, twenty years later. These workers claimed the compensation from their former employer in 1990s. The employer, in turn, claimed it to the insurance companies like Lloyd who wrote the policy in the 1960s. Lloyd had failed to understand the nature of future risk and thus faced near bankruptcy.

Latticework of Mental Models: Lollapalooza Effect

August 13, 2018 | 10 Comments

Value Investing Workshop in Bangalore (9th Sept), Chennai (23rd Sept), Mumbai (30th Sept). Click here to register now. Few seats remain!

Why were Warren Buffett and his creation, Berkshire Hathaway, so unusually successful?

In 2007 Wesco Annual Meeting, someone asked the above question from Charlie Munger. He replied –

If that success in investment isn’t the best in the history of the investment world, it’s certainly in the top five. It’s a lollapalooza.

Lollapalooza in the conventional sense means something outstanding of its kind. A person, a thing or an event that is particularly impressive, or extraordinarily attractive. But being multidisciplinary learners, we shouldn’t be satisfied with the conventional definitions, should we? Moreover, Charlie Munger doesn’t use lollapalooza just for its dictionary meaning.

Here’s the definition of Lollapalooza taken from the book Poor Charlie’s Almanack –

Lollapalooza is, as personified by Charles Munger, the critical mass obtained via a combination of concentration, curiosity, perseverance, and self-criticism, applied through a prism of multidisciplinary mental models.

When Charlie Munger uses the word lollapalooza, he often attaches the word “effects” (as in “lollapalooza effects”) which means that multiple factors are acting together in ways that are feeding back on each other. [Read more…] about Latticework of Mental Models: Lollapalooza Effect