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Investing

This page contains our best articles on the subject of value investing and investment behaviour.


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Latticework of Mental Models: Externalities

About five years back when I moved into my current apartment community, the area around was pretty much empty. The open land and the surrounding greenery attracted so much that making the decision was a no-brainer.

Or so I thought because I forgot one thing. I should have asked for a guarantee that the greenery will stay that way.

It didn’t take much time for small houses to start mushrooming around the campus. Honestly, I shouldn’t be complaining. It’s a free country and people are allowed to construct houses. But it’s always the second order effects which create unexpected problems.

With inadequate supply of water from the government, came the need for bore wells for every house. I guess you can imagine where this story is going.

With bore wells getting installed in some or the other house every few weeks, started the unwanted and unbearably irritating noise emanating from heavy mechanical devices, drilling holes in mother nature’s heart.

I felt I was living in the middle of a factory. I had never signed up for this.

In today’s capitalist society, when I want to listen to a song on iTunes, I have to shell out money for it. But if I am forcefully exposed to a deafening, non-musical, and unhealthy sound, why am I not being compensated for it? Who should pay for my misery? The driller, the landowner, the government? I demand that all of them should but nobody seems to be interested.

[Read more…] about Latticework of Mental Models: Externalities

It’s Your Money, Honey – My Lecture on Saving and Investing at Mindscape 2015

I recently delivered a lecture on the importance of saving and investing to a group of 300+ people, mostly college students, at Mindscape 2015 – an annual ideas festival that features talks, film screenings & performances and is held in Navi Mumbai.


Click here to download my presentation slides PDF (13.8 MB file). I will share the video when I receive the same from the organizers.

I have been extremely fortunate to be able to share my thoughts and experience with budding minds.

Please share this presentation or the ideas it contains with the young around you. Even if you can enlighten one mind and get him/her on to the right path of managing his/her money and behaviour sensibly, it would be a great job done.

Let me know your thoughts/feedback on the presentation in the Comments section of this post.

Poke the Box: Simplify

Let’s Start with Safal Niveshak
Just in case you missed any of this on Safal Niveshak over the last few weeks…

  • Latticework of Mental Models – Mental Accounting.
  • My most powerful tool for thinking and decision making.
  • Read Safal Niveshak’s latest e-book – Cheat Sheet for Investing Your Money.

[Read more…] about Poke the Box: Simplify

Latticework Of Mental Models: Mental Accounting

Imagine yourself with your friend in the Sin City, i.e. The Las Vegas. While walking on the Las Vegas Boulevard you find a $10 bill sticking out from the side of the pavement, as if it’s telling you “Please Pick me!”. You pick it up and feel ecstatic about your moderately good fortune.

“Wait a minute! Is that a sign from the universe?”, a strange but perfectly reasonable thought appears in your thought screen. Perhaps the lady fortuna is nudging you to try out your luck using this $10 totem. After all it’s Las Vegas. The Gambler’s Paradise.

Your friend however is tired and heads back to the hotel. But you just can’t ignore the sign from above. Taking this as an omen, you enter the first Casino and head straight to the roulette table. You want to bet on your lucky number 7. Sure enough, the roulette ball hits 7 and 35-1 bet wins you $350. You let your winnings ride and the ball lands on 7 again, paying you $12,250. And so it goes. Within an hour you are a multimillionaire with $50 million in your kitty.

Feeling like Daniel Ocean from Ocean’s Eleven, you intend to bring the house down with your raging streak of luck. Being just one step away from becoming a billionaire you bet all your money on number 7 one last time – only to lose it all this time. Broke, dejected and little flabbergasted you walk down several miles to join your friend in the hotel room.

[Read more…] about Latticework Of Mental Models: Mental Accounting

Poke the Box: Think Like a Child

Let’s Start with Safal Niveshak
Just in case you missed any of this on Safal Niveshak over the last few weeks…

  • Here are 36 lessons from 36 years of my life. And here’s the 37th.
  • The legendary Howard Marks on contrarianism.
  • Lesson from a 2,000-year-old Stoic philosopher on what to read in investing.
  • Is maximizing shareholder value a dumb idea?

[Read more…] about Poke the Box: Think Like a Child

The 37th Lesson

On this very day last year, I had shared with you 36 lessons from 36 years of my life. Today, I complete 37 years in the present state of being, and thus wish to share with you the 37th lesson I have learned in the year gone by – one of the most powerful lessons that I believe has the ability to turn me into a better person and a better investor going forward.

That lesson is of mindfulness, or a state of active, open attention on the present.

When you are mindful, you observe your thoughts and feelings from a distance, without judging them good or bad. Instead of letting your life pass you by, mindfulness means living in the moment and awakening to experience.

Mindfulness

“Oh, that’s same as meditation, right?” you might wonder like I did when I came across this practice some time back. Well, meditation is a tool to help you learn to be mindful.

[Read more…] about The 37th Lesson

Poke the Box: The Hardest Part is Starting

Let’s Start with Safal Niveshak
Just in case you missed any of this on Safal Niveshak over the last few days…

  • Breaking News – Anshul got a super awesome double treat yesterday in the form of twin daughters. Congratulate him on Twitter. 🙂
  • Ian Cassel of MicroCapClub shares his insights on investing through an interview with Safal Niveshak.
  • Check if you are making this mother of all investing mistakes.
  • Bull markets create a curse that leads people to give up on their sound investment philosophy and become impatient. Read more here.

[Read more…] about Poke the Box: The Hardest Part is Starting

Microcap Investing, the Ian Cassel Way

Note: This interview was published in the November 2015 issue of our premium newsletter, Value Investing Almanack. To gain instant access to more such interviews and other interesting stuff on value investing and business analysis, click here to subscribe now.

Ian CasselIan Cassel is the founder of MicroCapClub.com, which is an exclusive forum for experienced microcap investors focused on microcap companies (sub $300m market cap) trading on the US and Canadian markets.

Ian has been investing in microcaps for 15 years and has been a full time microcap investor since 2008. Ian looks to invest in great management teams running great businesses with a moat. He tries to invest in the best 5-6-7 companies he can find at all times.

Ian founded MicroCapClub in 2011 to be a place for “real” and experienced investors in the microcap space to share ideas and learn from one another. When Ian isn’t researching stocks or administering MicroCapClub, you can find him reading, golfing, or shopping at Costco with his wife.

Let’s now jump straight into the interview.

[Read more…] about Microcap Investing, the Ian Cassel Way

The Curse of Knowledge

Note: This post was originally published in the August 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.



“See, when you want to reverse the car to left, you have to turn the steering wheel to the left,” I told my wife while I was trying to teach her reverse parking.

“But when I turn left, the car is going towards right!” she exclaimed.

“No! The car is going towards left. See, the left tail lamp is going left,” I showed her in the side view mirror.

“Yeah but the right headlamp is going towards the right,” she pointed towards the right headlamp which appeared to be moving towards right from driving seat. Of course, it had to. If you are focusing on the front, the nose of the car will seem to go towards the right.
[Read more…] about The Curse of Knowledge

The Mother of All Investing Mistakes

What would you do if you had something coming at you at 110 km an hour and less than half a second to react?

Soccer goalkeepers saving penalty kicks face this situation often. While watching penalty kicks looks like a lot of fun for the audience, it’s often a tricky situation for the person facing the penalty i.e., the goalkeeper. He has to make a decision in less than a second and that too a decision on which the balance of his team’s fortunes hangs.

Penalty kicks are a great way to understand one of the biggest mistakes investors make. More on that later, but first let’s talk about the options in front of the goalkeeper saving the kick.

Lesson in Investing from Penalty Shoots

He has three choices available – He can dive left, dive right, or stays put.

[Read more…] about The Mother of All Investing Mistakes

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