Wit. Wisdom. Value Investing.
Dear Tribe Member,
Trust 2019 treated you well. It certainly was good for Safal Niveshak. The tribe crossed 60,000 members.
Anyways, right before the year ends, I thought I’d share a handful of ideas I’ve learned, re-learned, and wrote about in the past twelve months. Here are 51 of them categorized under the subjects of investing, learning, and life. I hope you find these useful, as much as I did.
Statutory Warning: This is NOT an investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. I do not own the stock, but my analysis can be biased, and wrong. I have been wrong many times in the past. I, Vishal Khandelwal, am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).
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Monty Hall problem has baffled the maths enthusiasts for decades. Mr. Monty Hall was associated with the popular game show called Let’s Make a Deal on American TV. Over his 30 years long career, Hall hosted nearly 5000 episodes of Let’s Make a Deal.
At the end of every episode, the contestants were offered to play a game called “Big Deal.” Here’s how it was structured.
A contestant was invited to stand with Monty Hall facing three big doors: Door no. 1, Door no. 2, and Door no. 3. Behind one of these three doors is a grand prize like a brand new car. The other two doors have something useless like a goat. Of course, Hall knew beforehand which door had the prize.
[Read more…] about Spotlight: Stay or Switch?
In this special edition of InvestorInsights, we share the biggest ideas that we learned from various experienced value investors and money managers we interviewed during 2019
Okay, people change all the time.
School back-benchers turn around, finish college with top scores, get jobs or start businesses and lead mature, responsible lives.
Introverts move out of their shyness and make friends.
Stammerers get over their difficulties and become great speakers.
Alcoholics stop drinking and become mature.
Criminals convert to religion and leave the life of crime behind.
Lazy and selfish people become altruistic and devote their lives to the service of others.
Sinners become saints.
Traders who cannot see beyond an hour become investors (rare, but still) who see beyond years.
My 8-year-old son Chaitanya, like most kids his age, paid little attention as I showed him how to make a paper elephant for what seemed like the hundredth time. I said, “Fold the paper into half, then fold here, and then here.”
As I was talking, he kept looking at everything except at what I was doing. He fidgeted and played with his pencil. I kept pulling his attention back to what we were doing and my constant refrain was, “Pay attention!”
Ultimately, I lost my patience, and moved on to reading a book.
It’s not that Chaitanya is uninterested all the time. He is completely focused when he reads his favorite books, or when he is playing with his Lego blocks. But at other times, asking him to focus is an exercise in frustration.
Now if you think kids with their terribly short attention spans are tough to deal with, consider this. In 2000, the average human attention span was 12 seconds i.e., we could focus on any one particular thing just for 12 seconds before being distracted or allowing our minds to wander. If you think that was terribly low, please note that this number has now fallen to just eight.
When I look back to that time when I lost my patience on Chaitanya and moved onto reading a book, I realize that I was onto a second book in the next five minutes.
[Read more…] about Long Term Investing in the Age of Small Attention Spans
During World War II, in the middle of 1944, the Allied forces were gaining ground against Germany. With the invasion of Normandy, Germany was on its back foot. In spite of this massive setback, Germany was not ready to let up.
On June 13, 1944, a week after Normandy, a loud buzzing sound rattled through the skies of battle-worn London. Seconds later, a never seen before flying object crashed and exploded on one of the civilian establishments in the city. Dozens perished.
British intelligence soon discovered that it was a new weapon developed by Germany. They called it V-1.
On its debut night, 9 more V-1s were fired across the English channel. Fortunately, only four of them managed to strike England. But that was just the beginning. Over the next few months, Germany shot 13,000 of those V-1s.
[Read more…] about Behaviouronomics: The Clustering Illusion
I read this story recently about a man who went fishing in his boat. After some waiting, something tugged on the line. He got it out.
He saw the fish had silver and gold-coloured fins. It was very beautiful. He put it in the boat, even as the fish started struggling for life.
Then, to his surprise, the fish spoke, “Let me go into the river. Just put me back in the water. I will give you three wishes. You can ask for anything but put me back in the water now.”
The man thought for a few minutes. The fish was struggling for life, getting weaker and weaker.
Then he said, “Okay make it five wishes, I’ll let you go.”
The fish said, “No, three.” Its voice was already weak.
Post the second world war, when the western economies experienced a massive boom, the number of people living and working in high rises increased exponentially. These tall establishments became more convenient with the wide adoption of elevators.
In spite of elevators saving time and effort (that would’ve gone in climbing the stairs), people started complaining about delays and the slowness of elevators.
We, humans, are inherently discontent with what we have, aren’t we? Instead of feeling grateful for the fact that elevator saves us from the pain of trudging up floors on the foot, we get frustrated about having to wait a few extra minutes. Such is the human nature. However, it’s not the waiting that bothers us. It’s boredom.
[Read more…] about Bookworm: Alchemy
Money often costs too much. ~ Ralph Waldo Emerson
The tragedy dates to 1859, when around 450 passengers on the Royal Charter, returning from the Australian goldmines to England, drowned when their ship was wrecked off the north coast of Wales.
What caused this shipwreck? Well, many of those on board were weighed down by the gold in their money belts that they just wouldn’t abandon so close to home.