Archives for September 2019

Recipe for Successful Long-Term Investing, Biggest Financial Regrets, and Applying Stop Loss in Life

Every Saturday, I plan to send out this special post with a few ideas I am reading and thinking about. Plus, a question I am meditating on.

If you wish to receive this post – apart from others I write regularly on investing, decision making, behavioral finance – please sign up below.

Anyways, here is some stuff I am reading and thinking about this weekend…

Book I’m Reading – A More Beautiful Question
Since early childhood, most of us learned that our parents did not like us asking many questions and that only authority figures – most grown-ups – had the right to ask them. The result was that we stopped questioning things and accepted what we saw, heard, and were told with meek acceptance.

Sadly, this approach worked well in the industrial era, but proves futile in the knowledge era, because it compromises our ability to think and understand deeply.

Of Good Stories and Bad Businesses

The company WeWork has been in the recent news for a lot of reasons — many of them not so comforting for the company’s private investors. Those who haven’t heard of WeWork or don’t know much about it, here’s a primer on Wework’s business model.

In one line, WeWork leases out large office spaces, upgrades them, makes them look cool and upscale, and rents them out on per seat basis to either individuals or other companies. In case you’ve heard of the term coworking spaces, WeWork is that.
[Read more…] about Of Good Stories and Bad Businesses

How to Survive the Death of Businesses

Businesses die, like we do.

However, in contrast to us (I mean, humans…because some bots and aliens may also be reading this post) gradually increasing our average life expectancy over decades, more businesses are dying faster than any time in history.

While there is no real research done on Indian businesses, as per Credit Suisse, the average life span of S&P 500 companies in the US, which stood at 60 years in the 1950s, has now fallen to under 20 years.

The biggest culprit for this is the disruptive force of technology, which is killing off older companies earlier and at a much faster rate than decades ago.

Anyways, today’s post is not about what businesses can do to stave off their deaths, which is mostly inevitable in these rapidly changing times.

How to Win At Investing (And At Anything in Life)

I wrote yesterday about five ways to destroy wealth in the stock market.

As an antidote, and especially as you may be sailing through the vicissitudes of ecstasy (after seeing your stocks surge yesterday) and, at the same time, misery (for not buying more stocks before yesterday), today I share with you one way to win at the game of investing, or at anything in life.

That way, my dear friend, is of equanimity, which is calmness and composure, especially in a difficult situation.

Indian scriptures define it better as samabhaav, which means “sameness of things” or samatvam, which means “evenness of mind.”

5 Ways to Destroy Your Wealth

It’s common if you are wealthy to worry about losing your fortune due to forces beyond your control. Like market meltdowns or economic stagnation.

But what many of us don’t realize is that our own behavior may be the root of significant losses.

Doing the Work is NOT Enough

Yesterday did not start on a good note for me.

I broke three cups.

Sunday is when I usually prepare tea for the house. As I was pulling out three teacups from the cabinet, all with a single hand while holding the cabinet door with another, one of them slipped.

I watched, aghast, wanting time to stop. But it didn’t. In fact, it seemed to move faster. The cup was lost.

However, if that was not all, as I vainly attempted to catch it in that millisecond, the other two cups also dropped out of my hand.

All three were gone.

As I was cleaning up the mess, a realization struck. Maybe the second-best thing for me to do to save the two other cups was to let the first one go. The best thing, of course, would have been to not try pulling them out of the cabinet with one hand.

Life teaches us lessons almost all the time. We only need to observe well, and sometimes be prepared to hear the sound of breaking glass.