Premium Value Investing NewsletterDownload Free Issue

Poke the Box: There Are No Silver Bullets in Investing

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

Book Worm
Howard Marks’s memos are a treat to read. In fact, this is one resource apart from Buffett’s letters and Munger’s speeches that I would recommend you to read – in case you had to read just three things in your life to learn how to invest sensibly. Marks has also written a brilliant book called The Most Important Thing. Here’s an extract from that book where Marks talks about how investors fall for the delusion of high returns without risk, which creates a ground for permanent loss of capital…

When a market, an individual or an investment technique produces impressive returns for a while, it generally attracts excessive (and unquestioning) devotion. I call this solution du jour the “silver bullet.”

Investors are always looking for it. Call it the holy grail or the free lunch, but everyone wants a ticket to riches without risk. Few people question whether it can exist or why it should be available to them. At the bottom line, hope springs eternal.

But the silver bullet doesn’t exist. No strategy can produce high rates of return without risk. And nobody has all the answers; we’re all just human. Markets are highly dynamic, and, among other things, they function over time to take away the opportunity for unusual profits. Unskeptical belief that the silver bullet is at hand eventually leads to capital punishment.

Warren Buffett said, “Rising prices are a narcotic that affects the reasoning power up and down the line.” So it’s not unusual to see people believing in silver bullets. First, there’s usually a germ of truth. It’s spun into an intelligent-sounding theory, and believers get on the loudspeakers to convince others. Then it produces profits for a while, whether because there’s merit in it or just because buying on the part of new converts lifts the price of the subject asset.

Eventually, the appearance that (a) there’s a path to sure wealth and (b) it’s working turns it into a mania. But after the fact — after it has popped — a mania is called a bubble.

Stimulate Your Mind
Here’s some amazing content I read in recent times…

Poke of the Week – Don’t Aim at Success

One of the best books I’ve ever read, and re-read on life’s philosophy and psychology is Viktor Frankl’s Man’s Search for Meaning.

Frankl wrote this book to chronicle his experiences as a Nazi concentration camp inmate during World War II, and describe his psychotherapeutic method, which involved identifying a purpose in life to feel positively about, and then immersively imagining that outcome.

While the entire book is wonderful to say the least, here I leave you with this brilliant thought Frankl Wrote at the very start of the book…

Don’t aim at success. The more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side effect of one’s personal dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself.

Happiness must happen, and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see that in the long-run—in the long-run, I say!—success will follow you precisely because you had forgotten to think about it.

Keep poking.

Don’t aim at success. If you’re dedicated, it must happen.

Be cool, even as the weather’s getting hot.

Be kind to others, and to yourself.

Stay happy, stay blessed.

With respect,
Vishal Khandelwal
Chief Poker – Poke the Box

Print Friendly, PDF & Email

About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.

Speak Your Mind