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“What’s keeping you from being rich? In most cases, it’s simply a lack of belief. In order to become rich, you must believe you can do it, and you must take the actions necessary to achieve your goal.” – Suze Orman
Well, that was the theory of getting rich. Here are the pratical tips, the actions necessary to get rich –
Warren Buffett recently released his 2017 letter to shareholders of Berkshire Hathaway. As outlined on the first page of the letter, Berkshire’s share price has increased by, hold your breath, 2,404,748% over the last 53 years.
The big idea worth noting here is that the annualized return Berkshire’s stock has earned for its shareholders to achieve such magnificent result over 53 years is less than 21% – something people basking in the limelight of current bull run would discard as too less!
Anyways, I have prepared some notes on Buffett’s 2017 letter. Click on the image below or click here to download the document.
Note: This post was originally published in the July 2015 issue of Value Investing Almanack. To read more such posts and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.
“It should be there. Right in front!” informed my wife from the other room.
“It’s not here. I can’t see it.” I again scanned all the shelves in the cupboard.
“Look again. I kept it there in the morning.” My wife sounded very sure about it.
“No! It’s not here. I am sure.” I confirmed while closing the cupboard. What happened next shouldn’t be surprising for you because most of you have experienced it before.
She came, opened the cupboard, grabbed the sugar jar which was obviously sitting right in front and handed over to me. I stood there flabbergasted. How could I miss it? What’s wrong with my eyes? Have I gone blind? It felt as if the jar manifested itself out of thin air. It was like…magic.
[Read more…] about Inattentional Blindness Bias
I recently attended the annual shareholder meeting of Daily Journal Corp, a publishing company based in Los Angeles, US. I am not a shareholder in DJCO, but this was a chance to hear the 94-year old Charlie Munger, who is its chairman and director.
Mr. Munger answered questions from the audience for around two hours – on wide-ranging topics like bitcoins, banking, artificial intelligence, and life – including one from me (see below). Here are excerpts from the notes prepared by Adam Blum (see the link to entire notes at the bottom of the post).
On searching for ideas – The two rules of fishing are to fish where the fish are, and don’t forget the first rule. Investing is the same thing. In some places, no matter how good a fisherman you are, you won’t do well. Life is a long game. Take it as comes and do the best you can, and if you live to an old age, you will get your full share of opportunities, which will be two in total, maybe, but seize one of the two, and you will be alright.
On personal success – Approach life like [Thomas] Carlyle, and get up every day doing the best you can. Marry the right person. Everyone here who’s your age will do well. You’re not that mad at the world; instead you’re trying to cope with how to make it a little better. If you were here with placards shouting, you wouldn’t have bright future. Avoid extremely intense ideology, because it ruins your mind. The kids with the placards are pounding the idiocy in instead of shouting it out.
[Read more…] about Charlie Munger on Bitcoins, Banking, AI, and Life
One of the most embarrassing moments of my childhood was the day when my class teacher asked me something about Sachin Tendulkar. I replied, “Who is Sachin Tendulkar?”
I was in 6th standard. The entire class, including the teacher, burst into laughter. That was the day when I started taking an active interest in cricket. Of course, the motivation was to avoid looking like a fool in a cricket crazy nation.
“Dravid is not in form these days.” Claimed one of my friends.
“I hope he comes back in form soon else they will drop him from the national team.” Argued other friend.
I nodded in agreement. I was faking because one thing that still baffled me was the idea of a player being “in-form” or “out-of-form.”
“What’s this in-form and out-of-form business?” I asked my best friend. Typically, looking-like-a-fool fear goes away when you’re with your best buddies, right? He was the only one who I didn’t feel the need to impress with my cricket knowledge.
Well, if a player plays consistently well for many innings, we say he is in good form. Otherwise, he is considered out of form, he explained, “An in-form player is always in demand because he’s expected to continue playing well.”
Why does an in-form player play well? If it’s the past performance that determines the present form then how does it ensure the future performance? Isn’t this form business based on circular logic?
[Read more…] about Latticework of Mental Models: Hot Hand Fallacy
I received this Whatsapp message from a friend recently, where he wanted my opinion on the post-Budget crash in Indian stocks and how to deal with the same…
My buddy Sandy was an airline pilot. When asked to describe his job, he always answers, “hours of boredom punctuated by moments of terror.” The same can be true for investment managers, for whom the last few weeks have been an example of the latter. We’ve seen bad news and prices cascading downward. Investors who thought stocks were priced right 20% ago and oil $70 ago now wonder if they aren’t risky at their new reduced prices.
[Read more…] about Dealing with Stock Market’s Moments of Terror
Time flies. It’s already been over six years since I started Safal Niveshak in mid-2011. Even the journey of my Value Investing Workshops is about to complete six years. So far, I’ve completed 70+ workshops across 15+ cities in India, covering 3,000+ investors. And it’s been a wonderful experience.
Over these years, I have also received quite a few requests for conducting such workshops outside India, which I have avoided so far.
However, given the continued requests, I am making an attempt now to conduct these workshops internationally.
To start with, I plan to conduct two workshops in the United States in February 2018. Tentative dates are 10th February (Saturday) in San Francisco and 17th February (Saturday) in New York.
If you are in the US that time and wish to attend any of these sessions, please fill this short form to show your interest, which will help me finalize my plans.
Also fill the form if you live in some other country and want me to visit there to conduct such a session.
If you need any other details on these workshops, please email me at vishal@safalniveshak.com.
Thank you! Look forward.
Note: This interview with Kenneth Jeffrey Marshall was originally published in the November 2017 issue of our premium newsletter – Value Investing Almanack (VIA). To read more such interviews and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.
Kenneth Jeffrey Marshall is an American value investor, teacher, and author. He teaches value investing in the masters in finance program at the Stockholm School of Economics in Sweden, and at Stanford University. He also teaches asset management in the MBA program at the Haas School of Business at the University of California, Berkeley. He is the author of the 2017 bestselling book Good Stocks Cheap: Value Investing with Confidence for a Lifetime of Stock Market Outperformance published by McGraw-Hill. He holds a BA in Economics, International Area Studies from the University of California, Los Angeles; and an MBA from Harvard University. He splits his time between California and Sweden.
Safal Niveshak (SN): Thanks for doing this interview, Kenneth! Please tell us a little about your background and journey, and how you got into value investing?
Kenneth Marshall (KM): Well, I was first shown value investing in the late 1980’s. But it wasn’t like some sudden enlightenment. It actually took me a decade to get it. I’d rather not think about the cost of that delay.
[Read more…] about My Interview with Kenneth Jeffrey Marshall
Two hunters are out in the jungle when suddenly one of them collapses. His pulse is gone and his eyes are glazed. The other guy yanks out his cell phone and calls the emergency services.
He gasps, “My friend is dead! What should I do?”
The operator says “Calm down, sir. I can help. First, let’s make sure if he’s really dead.”
After few moments of silence, the operator hears a loud gunshot. Back on the phone, the guy says “OK, now what?”
The hunter was dumb but given the high adrenalin and panicky situation, the operator’s question wasn’t brilliant either, was it?
There’s some truth to the saying – the quality of your questions determine the quality of solutions. Computer programmers know this very well. They call it GIGO, i.e., garbage in garbage out.
Good question begets good answer. Bad question leads to bad answer.
If the history of stock market is anything to go by, investors often make decisions that can undermine their ability to build long-term wealth. As such, it is often very valuable to look back in history and study closely the principles that have guided the investment decisions of some of the best minds and practitioners in this field through both good and bad markets.
By studying these experienced investors, we can learn many important lessons about the mindset required to build long-term wealth.
With this goal in mind, here is a special e-book that aims to offer the wisdom of some of the best investment minds of current times from India and abroad.
[Read more…] about The Wisdom of Intelligent Investors (Special E-Book)