Archives for November 2018

The Sixteen Silliest (and Most Dangerous) Things People Say About Stock Prices

November 22, 2018 | 39 Comments

The title of this post is inspired from Ch. 18 of Peter Lynch’s One Up on Wall Street, that reads – The Twelve Silliest (and Most Dangerous) Things People Say About Stock Prices.

For today, I have just added to and removed from Lynch’s list, and have illustrated the silliness using real-life examples of listed Indian stocks. None of what you see below portrays my view on any stock showcased in this post. These are purely examples, and that too from the benefit of hindsight. But they offer meaningful lessons.

Anyways, before you read ahead, please understand that I agree with what Morgan Housel wrote recently that people are not crazy in general. Just that they can…

…be misinformed. They can have incomplete information. They can be bad at math. They can be persuaded by rotten marketing. They can have no idea what they’re doing. They can misjudge the consequences of their actions.

I also agree with Charlie Munger who said that even smart people may have their ‘streaks of nuttiness’ that cause them to make occasional dumb remarks and decisions.

So, what follows below showcases just those moments of nuttiness and craziness that get a lot of people into problems in investing. I have experienced some of these moments myself, just that I have managed to survive to tell the tale. 🙂

Siddhartha’s Dilemma, Marcus Aurelius On Honest Men, And Bezos on Amazon

November 17, 2018 | 1 Comment

Here’s some stuff I am reading and thinking about this weekend…

Book I’m Reading – Siddhartha
Siddhartha is a beautiful novel by Hermann Hesse, first published in 1922 in Germany, that deals with the spiritual journey of self-discovery of a man named Siddhartha during the time of the Gautama Buddha.

The book follows this young man named Siddhartha on his journey to find the true meaning of life and peace. One passage that is particularly enlightening for me is when a ferryman, Vasudeva, the spiritual guide of Siddhartha, consoles him after the latter’s son (also Siddhartha) from a courtesan woman (Kamala) doesn’t seem to be interested in reciprocating well to his father’s love and advice, and seems like running away to a path of his own that looks dangerous to his father –

Zoom Out, Baby, Zoom Out

November 15, 2018 | 10 Comments

It was Valentine’s Day in 1990. The Voyager 1 space probe, which had completed its primary mission, was leaving the Solar System.

At the request of astronomer Carl Sagan, the American space agency NASA commanded Voyager to turn its camera around and take one last photograph of Earth, across a great expanse of space. The photograph that got clicked was from a distance of about 6 billion kilometers (same as 240,000 round trips from Mumbai to New York).

In the photograph, against the vastness of space and among bands of sunlight scattered by the camera’s optics, Earth appears like a ‘pale blue dot’ (that’s what the photograph was named) that is smaller than a pixel.

Anyways, four years later, in 1994, during a public lecture at Cornell University, Sagan presented the photograph to the audience and shared his reflections on the deeper meaning behind it –

Fighting the Last War

November 12, 2018 | 1 Comment

Note: This post was originally published in the November 2017 issue of our premium newsletter – Value Investing Almanack (VIA). To read more such posts and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.

In Safal Niveshak’s Value Investing workshops, when we discuss the mental biases, we show the following video to our participants.

I would suggest that you pause here and watch this video before reading further.

It’s a test of your awareness so don’t cheat 🙂 [Read more…] about Fighting the Last War

From Darkness Unto Light

November 7, 2018 | 5 Comments

I was recently reading a story on the classical Greek philosopher, Socrates, who was tried and executed in 399 BC. He was tried on two charges – corrupting the youth, and impiety (perceived lack of proper respect for something considered sacred).

The Death of Socrates, by Jacques-Louis David (1787)

Socrates had done no such thing. What he had done was educate the youth, teaching them to challenge arguments from authority and question what they believed to be true.

In the process, he frustrated and embarrassed many powerful people with his constant line of questioning, known today as the Socratic method.