Archives for October 2023

It’s Never a Market Crash Problem

The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life

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It’s almost always an –

I don’t know who I am problem
I don’t know how much pain I am willing to take problem
I don’t have the patience to give my stocks time to grow problem
I bought on the tip of that popular social media influencer and did not do my homework problem
I did not diversify well problem
I bought the stock just because it dipped problem
I cannot resist my friends getting rich problem
I love to fall in love with my stocks problem
I cannot differentiate between stock price and intrinsic value problem
I suffer from a buy at any price problem
I borrowed to invest problem
I invested the money I needed soon problem
I don’t have time on my hands to see through market cycles problem
I trade too much and too often problem
I keep watching and worrying about stock prices problem
I will watch the market and my portfolio again after reading this post problem

And so, I must remind myself this at all times –

A market crash is ‘never’ the problem. ‘I’ am the problem, and I must sort myself out, because that is only what I control. And if I can control the ‘I’ better, a market crash will never be a problem.

I recently announced admission to the January 2024 batch of my most comprehensive classroom course in Value Investing titled – Value Investing Blueprint.

This residential course is scheduled to be held from 11th to 14th January 2024, at the campus of Pune-based FLAME University. The last date to apply is 10th December, 2023.

Click here to read more and apply if you are interested in joining this course.

Since it’s a classroom course, seats are limited.

The course will take you through the entire process of practicing value investing to identify long term wealth creating stocks. This includes helping you:

Create the right value investing mindset and build a behavioural framework to avoid biases and create the right investment thought process.
Assess business quality – separating good from gruesome
Analyze financial statements to find well-performing businesses
Calculate intrinsic valuations using various methods
Identify competitive moats and whether they are sustainable
Build a portfolio of sound, wealth-creating businesses

Click here to read more and apply if you are interested in joining this course.

Read a newspaper headline – “Blood on street for sixth day in a row.”

My first reaction? Blood? Already?

The headline reminded me of my younger self, utterly scared of injections (still am). I started wailing even before the doctor pulled out the syringe. For people already seeing “blood” on the street, just the syringe is out for now. “Blood” is still some time away. Stop wailing.

I have started work on a series of short videos – titled The Inner Game – to share my thoughts around investing, decision making, learning, and just the practice of trying to live a good life. Have published ten videos so far, which you can watch on my YouTube channel, including these recent ones –

Hope you like these and find some value.

Here’s a nice note from Byron Wien, American investor and vice chairman of Blackstone Advisory Partners, who passed away just two days back. I came across this note recently, and immediately thought of sharing with you. It contains Wien’s lessons that he learned in his “first 80 years” (he died at 90). These are more a set of life principles, one of which is –

Every year try doing something you have never done before that is totally out of your comfort zone. It could be running a marathon, attending a conference that interests you on an off-beat subject that will be populated by people very different from your usual circle of associates and friends or traveling to an obscure destination alone. This will add to the essential process of self-discovery.

Starting a solo podcast – The Inner Game, as mentioned above – is that act I have undertaken to push myself out of my comfort zone. I also see it as part of my process of self-discovery. Let’s see how far I go with it.

Anyways, here’s a second nice lesson from Wien –

When your children are grown or if you have no children, always find someone younger to mentor. It is very satisfying to help someone steer through life’s obstacles, and you’ll be surprised at how much you will learn in the process.

That’s about it from me for today.

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Stay safe.

Regards, Vishal

The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life

Announcing – Classroom Course in Value Investing

Happy to announce admission to the January 2024 batch of my most comprehensive classroom course in Value Investing titled – Value Investing Blueprint.

This residential course is scheduled to be held from 11th to 14th January 2024, at the campus of Pune-based FLAME University. The last date to apply is 10th December, 2023.

Click here to read more and apply if you are interested in joining this course.

Since it’s a classroom course, seats are limited.

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[Notes] The 10 Commandments for Business Failure

They say you should never judge a book by its cover. It’s a good rule of thumb about what not to do.

So how do you judge if a book is worth reading or not? I agree, it’s a difficult question to answer but if you find a book, which starts with a foreword from Warren Buffett, there is no question about whether to read it or not. Don Keough’s The 10 Commandments of Business Failure is one such book.

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Path Dependence: A Lesson for New Investors

The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life

I was going through a few of my journal notes and came across this thought from Nassim Taleb who explained the concept of “path dependence,” which is the dependence of outcomes on the path of previous outcomes, rather than simply on current conditions –

Ironing your shirts then putting them in the washing machine produces a different outcome from washing your shirts first, then ironing them. The reader can either trust me on this, or try the experiment with both sequences on the next Sunday afternoon. Now, assume that your capital is around one million dollars and you are involved in speculation. Apply path dependence to the reasoning.Making a million dollars first, then losing it, is markedly different from losing a million dollars first then making it.
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In Praise of Slowness, in Life and Investing

The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life

As part of my exercise regimen, I have been climbing stairs to my 5^th floor apartment 2-3 times every day for the past few months. And most of these are not slow climbs, but sort of high intensity, that leave me with a heart rate of almost 140-150 beats per minute.

Of late, I started keeping track of the time it took me to climb this much at one go. On an average, it took me 30 seconds to run up five floors, two steps at a time. Sometimes a second more, sometimes a second less. But on an average, almost 30 seconds later, I was huffing and puffing for the next 30 seconds as I reached my apartment.

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Investing and the Fallacy of Hard Work

Two police officers were stuck in traffic. They were on a routine patrol, and not much was going on that morning. The older cop was driving. As they waited at the traffic signal for the lights to turn green, the younger officer glanced at the fancy new BMW in front of them. The BMW driver took a long drag on his cigarette and flicked the ashes onto the upholstery.

“What a careless guy!” mumbled the older cop. “Who ashes his new car?”

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