Safal Niveshak

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A 5% Decade

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On the morning of April 10, 1912, the Titanic set sail on her maiden voyage. She was the largest ship afloat, built with the latest technology, and marketed as “unsinkable.”

Her captain, Edward Smith, was a veteran of the seas. The ship’s design was considered so safe that she carried lifeboats for only about half the passengers on board. Even the safety drills were minimal.

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Impermanence

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Hardcover Books: The Sketchbook of Wisdom & Boundless

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The first mobile phone I bought was in 2003. It was with my second salary, and it was a Nokia 3315. In fact, when I looked around, almost everyone had one, and for good reason. You could drop it or even throw it at a wall, and it would still work fine.

Back then, Nokia wasn’t just a company, but the company. If you’d asked me names of businesses that would last forever, I’d have said “Nokia” as one of them without a second thought.

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Investing in Your 40s and 50s: The No-Mistake Zone

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Disclaimer: What follows is based on my personal views and experiences, and may not apply to everyone’s circumstances. Your financial situation, risk appetite, and life stage may be very different from mine. Please don’t take offence if something here doesn’t match your approach. Use it only as a perspective, not a prescription.

I received a letter from a reader a few days ago. He was someone around my age and wrote:

I’m in my mid-40s, my kids are growing up, my parents are ageing, and I’m suddenly feeling this urgency about my finances. I’ve been investing, but I don’t know if I’m doing enough or if I’m doing it right. There’s no social security here, and if I mess up, there’s no safety net. What should I do?

I read it twice because it could have easily been me writing that letter. I am middle-aged myself, and lately I’ve been thinking a lot about these same questions about money, security, and the strange cocktail of restlessness and responsibility that creeps up on you in this phase of life.

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The Psychology of Investing #14: The Authority Illusion

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Hardcover Books: The Sketchbook of Wisdom & Boundless

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The Internet is brimming with resources that proclaim, “nearly everything you believed about investing is incorrect.” However, there are far fewer that aim to help you become a better investor by revealing that “much of what you think you know about yourself is inaccurate.” In this series of posts on the psychology of investing, I will take you through the journey of the biggest psychological flaws we suffer from that causes us to make dumb mistakes in investing. This series is part of a joint investor education initiative between Safal Niveshak and DSP Mutual Fund.

A relative of mine once struggled with a stubborn stomach problem, which included constant acidity, bloating, and fatigue. It wasn’t life-threatening, but it made daily life miserable. At first, he brushed it off as stress, or too much tea and late nights, like most of us would. But after three or four months, the discomfort became impossible to ignore.

Finally, he decided to see a senior doctor in the city, one with decades of experience, consultant at a top private hospital and to a few celebrities, and long waiting lists. As my relative described him later, the aura around him was unmistakable.

But as often happens in doctor visits, the consultation was brisk. After a few quick questions, the doctor prescribed an aggressive line of checkups and treatment. That included an endoscopy, blood tests, ultrasound, and an expensive combination of medicines. The doctor’s fee and tests, which were all done at his clinic, alone cost almost ₹30,000.

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Just Stay Out of Trouble

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Hardcover Books: The Sketchbook of Wisdom & Boundless

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It began innocently enough, with a conversation over tea. My friend was telling me about a new real estate project he had been “looking into.” He didn’t say much at first, just that it was in a location everyone said was going to boom in a few years. The government had announced a new airport and a highway project nearby. Also, as per my friend, the pre-launch price was “ridiculously good,” and the developer had a name people in the city recognised.

He didn’t sit on it for long. Within days, he had paid the booking amount and signed the papers. In his mind, the deal was already a success. He could picture the appreciation in value and the approving nods from his family and friends when he’d tell them he saw the opportunity early. It all looked like a straight road to a happy ending.

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The ₹1,038 Illusion

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Hardcover Books: The Sketchbook of Wisdom & Boundless

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Value Investing Almanack newsletter: Deep, timeless investing insights delivered to your inbox every month. Click here to join now.

This is from sometime around 2005 while I was just two years into my role as an equity research analyst. I was working on a mid-size auto ancillary company that had been on my watchlist for months.

Auto ancillary was then an unglamorous industry, and the company had been doing roughly the same thing for decades. But it had a reasonable track record of generating cash, and recently its stock price had been drifting lower. It felt like the sort of under-the-radar situation that might turn into a good investment if the numbers lined up.

I started in the usual way, pulling up a decade’s worth of financial statements. I went line by line through revenues, operating margins, capital expenditures, debt levels, and cash flows. Nothing leapt off the page. Everything looked… just fine. I decided to dig deeper and run the numbers.

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Your Last Great Edge in Investing

🔔 A Note on My Books and Courses

Hardcover Books: The Sketchbook of Wisdom & Boundless

Mastermind Value Investing membership: Learn, connect, and grow with a private community of serious value investors. Click here to join now.

Value Investing Almanack newsletter: Deep, timeless investing insights delivered to your inbox every month. Click here to join now.

Few serious investors were excited about Amazon in the early 2000s. The company was less than 5 years old, and despite rapid revenue growth over the previous years, was still reeling under deep losses at the operating and the net levels. What’s more, the dot-com bubble had recently burst, and the stock had fallen more than 90% from its highs.

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Letter to A Young Investor #14: The Most Profitable Word in Investing

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I am writing this series of letters on the art of investing, addressed to a young investor, with the aim to provide timeless wisdom and practical advice that helped me when I was starting out. My goal is to help young investors navigate the complexities of the financial world, avoid misinformation, and harness the power of compounding by starting early with the right principles and actions. This series is part of a joint investor education initiative between Safal Niveshak and DSP Mutual Fund.

Dear Young Investor,

I hope this letter finds you well.

As I sat down to write this letter, I found myself wondering, “After already sharing some of the most important ideas to think about at the start of the someone’s investing journey, what’s left to say?”

Then it struck me. There’s one lesson I haven’t spoken about yet, even though it’s among the most valuable I’ve learned about money.

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Dear Regret

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Before you read this letter, I want you to think about one of the most uncomfortable yet constant companions every investor lives with, which is regret. It is the persistent voice from within that reminds you of the stock you sold too early, the opportunity you missed, or the mistake you refused to correct. I’ve lived with it for years. This letter is my attempt to speak directly to that old, unwelcome friend. I have a feeling parts of it might feel familiar to you too.

Dear Regret,

You and I have known each other for quite a while. I never invited you into my life, or as an investor, but somehow, you always managed to show up like that neighbour’s cat that strolls into the house, makes itself comfortable on the couch, and looks at me as if I should be grateful for its company.

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Investing and the Paradox of Skill

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🎁 Hardcover Books: The Sketchbook of Wisdom & Boundless: Now available at discounted prices:

🎁 Mastermind Value Investing membership: ₹3000 off for new members. Click here to join now.

🎁 Value Investing Almanack newsletter: ₹3000 off on the annual plan. Click here to join now.

🎓 Offline Value Investing Workshop in Mumbai (10th August):
Join me in-person for a day of deep learning, reflection, and conversations around value investing and life. Click here for details and registration.

💻 Online Masterclass – The Art of Valuation (2nd August):
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If you’ve been investing for a while, you’ve probably had that odd experience where you did everything right – like studying a company carefully, buying it at a sensible price, and then holding on with patience – and yet, the outcome felt as random as a coin toss.

It’s frustrating and humbling, and yet, as the leading investment analyst and thinker Michael Mauboussin explains, this is the nature of the world we operate in.

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