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The Books That Made Me – Part 1

Hope you had a great start to 2018, and hope you have been able to maintain your new year resolution thus far. 🙂

A new year is not just about looking forward to what may transpire over the next 360+ days, of where you may go, but also to take stock of where you have come from. Like, for me, when it comes to reading books, a new year is not just a time to prepare a rough list of the books I wish to finish during the coming months, but also to look back at the books I have read in the past and would like to re-read.

2017 was one such year when most of the books I read were the ones I had read multiple times over the years. I don’t see 2018 turning out to be any different.

One of the few filters I use to choose the books I read is Taleb’s Lindy Effect. This, in simple words, means that a non-perishable thing (like technology, or books) that has survived the most, will survive the most. So, a book that has survived 50 or 100 or 500 years, and is still widely read because it contains timeless wisdom, will survive another 50 or 100 or 500 years because, well, it’s wisdom is timeless.

In this three-part series of posts, I aim to profile such books that have stood the test of time (almost, as some will be just 10+ years old) and have inspired me the most over years. In the first part today, I am profiling books on life and living that have inspired me the most. The second part will include my favourite books on thinking, learning and decision making, and the third part will be dedicated to investing books.

The Books That Made Me - Part 1 - Safal Niveshak

Let me start right away with the books that have inspired me the most in the way I live my life and conduct my daily affairs. This is not an exhaustive list but is made up of the books on life and living I go back to time and again, and return wiser.

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Safal Niveshak’s 2017 Annual Letter to Tribe Members

Dear Tribe Member,

Trust 2017 treated you well. It certainly was great for Safal Niveshak.

Here is a brief update on what transpired during the year. The tribe crossed 40,000 members (readers of our free newsletter, Safal Niveshak Post). We conducted nine value investing workshops during the year, meeting 430+ tribe members in the process.

The Mastermind Value Investing Course student count increased by 25%. Our premium newsletter – Value Investing Almanack – which is about to complete three years, gained 20% new members. It continues to receive inspiring reviews from its subscribers.

We also relaunched our free online value investing course – Value Investing Masterclass – in a new avatar. It now consists of updated and more lessons than the previous version. The subscription to this course jumped from 7,500 to 15,000 in less than a year after the relaunch, much better than our expectations.

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Latticework of Mental Models: Domain Dependence

Imagine this. You are escorted into a room. On one corner there’s a table with three items on it: a box of board-pins, a matchbox, and a candle. Your task is to attach the candle to the wall, so the wax doesn’t drip onto the table.

A psychologist named Karl Duncker first designed this experiment in 1945.

About seventy-five percent of the participants who take part in this experiment try following solutions.

First, they try to pin the candle onto the wall. It doesn’t work. Then they try to light the candle and use the dripping wax to attach it to the wall, but that’s usually not strong enough to hold the candle. So that doesn’t work either.

What about you? How would you solve this? Take a moment and think about it.

Very few people see the solution at once. Some people find it after only a minute or two of thought. Others see it after stumbling through several unsuccessful attempts. Most fail to solve it without some outside help.

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A Short Guide to Reading and Learning for Investors

I had written a lengthy post in 2015 on the subject of required reading for investors, which also included thoughts from Prof. Sanjay Bakshi and my own reading spectrum.

This latest post is an update on the same and includes my revised reading spectrum (not a major change over last time, but some meaningful additions).

For a change, I am not writing much in today’s post and would rather let the following two illustrations do the talking (Click on the images below to download them in large size).

The core idea is that, in true pursuit of wisdom in investing and life, we must read much more of what has endured over time (like supertexts, history, biographies, etc.) than what is ephemeral (like newspapers etc.)

Reading Spectrum - Safal Niveshak

Wisdom Tree - Safal Niveshak

I will end with a thought from Elon Musk on how to learn things deeper. Musk answered this to a question on how he does that himself –

It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang onto.

You see, often it happens that we want to dive into the deep end before we learn how to swim. So when you want to learn a new subject, identify the fundamental principles first – the trunk and big branches. Learn those things first and deep, and you’ll be able to figure out the leaves and figs – mostly noise – much easier.

Finally, use the Feynman Technique when you want to learn something clearer and deeper…

Feynman Technique - Safal Niveshak

Let me know your thoughts on these illustrations in the Comments section of this post, and a few of the supertexts – on investing, human, behavior, thinking, learning, etc. – that you think others and I must read and that are not covered above.

Lecture Presentation and Notes: Seeking Wisdom in the Age of Information

I recently spoke at a finance and business conclave in Chennai, organized by Naanayam Vikatan, a leading Tamil language finance magazine. The topic was ‘Seeking Wisdom in the Age of Information.’

Click here to download the presentation and notes, or read it in the panel below.