Safal Niveshak

Wit. Wisdom. Value Investing.

My Notes on Howard Marks’s Latest Memo: What Really Matters

The Sketchbook of Wisdom: Get Your Copy Now

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Howard Marks yesterday released his latest memo to clients of Oaktree Capital.

It was titled “What Really Matters?”

It’s a wonderful take on what investors must focus on and what they must avoid to achieve superior investment returns.

I have prepared some notes on the memo. Click here to read my notes.

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With respect,
– Vishal

StockTalk Nov. 2022 (Prime Exclusive)

Here is the November issue of StockTalk, a Prime members exclusive, that contains analysis of a leading Indian company in the financial services space.

This content is reserved for Prime Members. To access, please login below with your membership credentials.

If you are not a member, please consider joining the Prime Membership to access the best ideas in investing, human behaviour, business analysis, and decision making, and get onto the path of becoming a better version of yourself.

The Investor’s Manifesto (2022)

This is for you. This is from someone like you.

It is an Investor’s Manifesto.

It is something you can reflect back on if you ever felt stuck in your investing life.

If you believe in it, follow it, and stand for it, your investing life will be good.

Click here to download the manifesto.

Read it. Print it. Frame it. Face it. Remember it. Do it.

This is YOUR Manifesto.

And if you find value in it, please share it.

Value Investing Contest 2022

Here’s your chance to showcase your devil’s advocate skills to the Safal Niveshak tribe, help others understand what can permanently lose them their capital, and in the process win a prize if your entry gets chosen amongst the best.

Contest Rules

  1. Write a max. 1000 words SELL or AVOID report on a listed Indian company of your choice (BUY reports or those longer than 1000 words won’t be accepted)
  2. You must submit ONLY one report
  3. Deadline for report submission is 20th November 2022
  4. Email your report in a Word file to vishal[at]safalniveshak[dot]com with the subject line as – “Value Investing Contest 2022 – Company Name – Your Name”
  5. The stock must have a market capitalization of more than Rs 5,000 crore
  6. The idea must be well researched (by you). Your analysis must cover these areas:
    • Company’s business
    • All your reasons why one must avoid/sell the stock

The report would be exclusive to Safal Niveshak. You must not have published it on some other site. But once the report is published on Safal Niveshak, you may post an abstract at other places and link to the full report on Safal Niveshak.

Evaluation & Rewards

I will evaluate each submitted entry ONLY on the depth and simplicity of analysis, though good presentation and proper language is more than welcome (would save me editing time).

There are three prizes to be won (delivery in India only) –

  • 1st Prize – Books of choice worth ₹5,000/-
  • 2nd Prize – Books of choice worth ₹3,000/-
  • 3rd Prize – Books of choice worth ₹2,000/-

All submitted entries would be published on Safal Niveshak (the author can remain anonymous if he/she wants).

This contest is now open. Remember, the deadline for submission is 20th November 2022.

When I (Almost) Dumped Ben Graham’s Intelligent Investor

It was sometime in 2005 when a close friend of mine gifted me Ben Graham’s The Intelligent Investor, knowing that I was working as a stock analyst and aspired to become a sensible investor (aspirations are always sensible, you see).

“Is this a good book?” I asked him.

“Seek for yourself,” he told me.

This content is reserved for Prime Members. To access, please login below with your membership credentials.

If you are not a member, please consider joining the Prime Membership to access the best ideas in investing, human behaviour, business analysis, and decision making, and get onto the path of becoming a better version of yourself.

Long Term Investing is Hard

Admission Open: Value Investing Courses – Classroom and Online

1. Classroom Course: Value Investing Blueprint – This is a comprehensive course on value investing that I will conduct at FLAME University, Pune. It is a residential course and is scheduled to be held from 1st to 4th December 2022. The deadline for submitting applications is 17th October 2022. Click here to know more and join the course.

2. Online Course: Value Investing Workshop – Admissions are also open for the October 2022 cohort of my online value investing workshop. The workshop involves 22+ hours of pre-recorded, detailed lectures and Q&A sessions, plus a 3-hour live Q&A session scheduled for Sunday, 30th October 2022. I am accepting only 50 students in this cohort, and first 25 students can claim a special discount. Click here to know more and join the workshop.

A Few Ideas I’m Thinking About

Here are a few ideas I have been thinking about over the last few days.

Long Term Investing is Hard

The biggest reasons more people do not practice long term investing are that –

  1. It flies in the face of anything taught in business schools – that is, short termism – where most influencers/experts come from,
  2. It requires a painful degree of patience because it is only over long periods of time that the market eventually gravitates toward value,
  3. Life spans of businesses and their competitive advantage periods, on an average, are shortening,
  4. Our attention spans and holding periods are shrinking, and
  5. Noise is magnifying.

Given all of this, long term investing has become an increasingly difficult and contrarian endeavour. And so, not many investors have the ability or the wherewithal to practice it.

In fact, most people participating in the stock market don’t even understand what they are doing. This is especially when making money gets quick and easy, and they are doing great at it.

[Read more…] about Long Term Investing is Hard

How to Manage Risk of Randomness in Investing

Admission Open: Value Investing Workshop (Online) – October 2022 Cohort

I have opened admission to the October 2022 cohort of my online value investing workshop. The workshop includes 22+ hours of pre-recorded, detailed lectures and Q&A session, plus a 3-hour live Q&A session. 

I am accepting only 50 students in this cohort, and first 25 can claim a special discount. Click here to know more and join the workshop.

A Few Ideas I’m Thinking About

Here are a few ideas I have been thinking about over the last few days.

How to Manage Risk of Randomness in Investing

“All of life is a management of risk, not its elimination,” writes Walter Wriston, former chairman of Citicorp.

Randomness is the fabric that weaves the interaction of everything around us. Since you can’t remove randomness from our affairs, you can’t get rid of the risk also. Peter Bernstein in his book Against the Gods writes –

The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us.

[Read more…] about How to Manage Risk of Randomness in Investing

10 Demons of Investing

I wish all tribe members of Safal Niveshak a very happy Vijayadasami or Dussehra. As per Hindu tradition, today marks the victory of Goddess Durga over the demon Mahishasura. Today also marks the victory of Lord Rama over demon Ravana.

Consider Ravana. He is depicted and described as having ten heads and as a follower of Shiva. He is a great scholar, a capable ruler and a maestro of the veena, but someone who wished to overpower the devas. His ten heads represent his knowledge of the six shastras and the four Vedas.

A negative interpretation of Ravana’s ten heads are the ten emotions or senses in humans –

  1. Kama (Lust),
  2. Krodha (Anger),
  3. Moha (Delusion),
  4. Lobha (Greed),
  5. Mada (Pride),
  6. Matsar (Envy),
  7. Manas (Mind),
  8. Buddhi (Intellect),
  9. Chitta (Will), and
  10. Ahamkara (Ego)

When it comes to investing, some of these emotions stand in between the investor and his long-term success.

As the story of Ravana depicts, the mind tends to shun all things good for our life and seek all things bad for our life. To attain wisdom, one of the most important things we must do is witness the tricks of the mind, and avoid playing the wrong hand as much as possible.

In the illustration that follows, I have tried to depict the ten emotions, or the ten demons, or the ten tricks of our minds, when it comes to investing. Print it, paste it on your work desk, and look at it often.

No investor can claim to master or kill these demons, but a knowledge of these residing within you is, I believe, pretty helpful.

[Read more…] about 10 Demons of Investing

Small Circles: The Theory of Mastery in the Art of Learning and Investing

One of the best books on the art of learning I’ve read is, well, The Art of Learning by Josh Waitzkin.

Josh is a champion in two distinct sports – chess and martial arts. He is an eight-time US national chess champion, thirteen-time Tai Chi Chuan push hands national champion, and two-time Tai Chi Chuan push hands world champion.

In his book, Josh recounts his experiences and shares his insights and approaches on how you can learn and excel in your own life’s passion, using examples from his personal life. Through stories of martial arts wars and tense chess face-offs, Josh reveals the inner workings of his everyday methods, cultivating the most powerful techniques in any field, and mastering the psychology of peak performance.

This content is reserved for Prime Members. To access, please login below with your membership credentials.

If you are not a member, please consider joining the Prime Membership to access the best ideas in investing, human behaviour, business analysis, and decision making, and get onto the path of becoming a better version of yourself.

One of my favourite chapters from Josh’s book is titled – Making Smaller Circles – which stresses on the fact that it’s rarely a mysterious technique that drives us to the top, but rather a profound mastery of what may well be a basic skillset.

Josh starts this chapter with the story of the protagonist in Robert Pirsig’s book Zen and the Art of Motorcycle Maintenance. This man is Phaedrus, a teacher, who in this particular scene is reaching out to his student who is all jammed up when given the assignment to write a five-hundred-word story about her town, Bozeman.

[Read more…] about Small Circles: The Theory of Mastery in the Art of Learning and Investing

Charlie Munger on Inflation, Envy, and Why Investing is Going to Get Harder

In an interview recently, Charlie Munger warned about the biggest inflationary bubble in world history bursting and shared his thoughts on how it is going to unfold. He elaborated on the difficulty of building wealth for the young generation of today compared to his. Charlie said that we’re flirting with serious trouble and the consequences may be worse than what Paul Volcker was dealing with in the 1970s.

Here is the transcript I have prepared based on what Charlie said.

[Read more…] about Charlie Munger on Inflation, Envy, and Why Investing is Going to Get Harder