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Safal Niveshak Stream – December 10, 2016

Note to Readers: In Stream, we suggest worthwhile reading material on a variety of topics, not all of which are directly related to investing. Some of the articles require you to be paid subscriber of those sites. However, it is often possible to read such articles by going to Google News and searching for the article’s title.



Some nice stuff we are reading, watching, and observing at the start of this weekend…

Life/Learning

  • (740 words / 3 minutes read) Perseverance and determination are good qualities when the objective you’re working so hard to achieve is actually attainable. But there is a lot in life you just can’t change, like trying to change the world, so you must quit wasting your time trying…

    It’s nice and inspirational and all to think one person could actually change the world, but some things are just bigger than all of us. You can definitely make a difference in the world around you — that’s not a problem. Just watch that you’re keeping your expectations of the impact you can actually have in check.

    Or trying to get back what you have lost…

    You can replace a lost investment, or find a new mate, but there’s no point trying to change the fact that sometimes, what’s lost is gone forever. This is especially true of relationships — they might be rekindled, but they’ll never be quite the same.

  • (1950 words / 8 minutes read) I am a great fan of getting up early and completing my most important tasks – like eating a healthy food, exercising, and reading – before the world gets up and it becomes noisy. If you are not an early morning person, be one for you will be amazed by what you can do by waking up before sunrise, or with it. Now what do you do by getting up early? Try a few of the 8 things to do before 8 AM, like listening to or reading uplifting content…

    Ordinary people seek entertainment. Extraordinary people seek education and learning. It is common for the world’s most successful people to read at least one book per week. They are constantly learning.

    Taking even 15–30 minutes every morning to read uplifting and instructive information changes you. It puts you in the zone to perform at your highest. Over a long enough period of time, you will have read hundreds of books.You’ll be knowledgeable on several topics. You’ll think and see the world differently. You’ll be able to make more connections between different topics.

Reading/Thinking

  • (1500 words / 6 minutes read) The great manager and business thinker Peter Drucker says that it’s not enough simply to want to learn. As people progress, they must also understand how they learn and then set up processes to facilitate this continual education. Oth­erwise, we are selling ourselves — and our careers — dreadfully short. The maxim for every successful person, after all, is – “Always stay a student“…

    Too often, convinced of our own intelligence or success, we stay in a comfort zone that ensures that we never feel stupid (and are never challenged to learn or reconsider what we know). It obscures from view various weaknesses in our under­standing, until eventually it’s too late to change course. This is where the silent toll is taken.

    …the solution is as straightforward as it is initially uncom­fortable: Pick up a book on a topic you know next to noth­ing about. Put yourself in rooms where you’re the least knowledgeable person. That uncomfortable feeling, that defensiveness that you feel when your most deeply held assumptions are challenged — what about subjecting your­self to it deliberately? Change your mind. Change your surroundings.

  • Are you an aspiring writer? Even if you aren’t, chances are that your work involves writing to communicate your ideas or convince people about your viewpoint. Steven Pressfield’s latest book Nobody Wants To Read Your Shit contains superb ideas to take your writing skills to new level. Here are few quick tips from the book…

    1) Streamline your message. Focus it and pare it down to simplest, clearest, easiest-to-understand form.
    2) Make its expression fun. Or sexy or interesting or scary or informative. Make it so compelling that a person would have to be crazy NOT to read it.
    3) Apply that to all forms of writing or art or commerce.

    …writing/reading is, above all, a transaction. The reader donates his time and attention, which are supremely valuable commodities. In return, you the writer must give him something worthy of his gift to you.

Investing/Stock Market

  • (1190 words / 5 minutes read) You don’t need a lot of things to go right to achieve success in investing. It’s just that you need to be very disciplined with the things that do work, like the two key investing principles John Huber discusses in his post – quality of business and position sizing

    I think staying focused on the durable businesses that you are willing to put 5% of your capital into is an initial hurdle that will certainly limit some of the investments you can make (and thereby possibly limit certain profitable opportunities), but I think more importantly, this general rule of thumb will help reduce many mistakes and focus your attention on the high-probability (and usually higher quality) investment opportunities.

  • (3.40 minutes watch) Variable Reinforcement is a cognitive bias which keeps the compulsive gamblers glued to the slot machines in the casinos. It’s the devil that turns ordinary things into serious addictions. In investing, the need to check one’s portfolio frequently is a type of addiction too. Because of the inherent volatility of stock prices, there will be times when your portfolio will show profits (and sometimes it will be in red too). Every time you see a paper profit it releases a small quantity of dopamine, the feel good hormone, in your brain and your action (checking the portfolio) is reinforced. The notional increase in your portfolio value is a source of variable reinforcement. Watch the latest episode of Latticework of Mental Models video series…


    If you can’t see the video above, click here.

Business

  • (3775 words / 16 minutes read) Google makes so much money, it never had to worry about financial discipline – until now…

    …growing sense, among some on Wall Street and within Alphabet, the parent company of Google and X, that Teller was wasting money on crazy experiments. Google spent lavishly to market Glass—the devices were delivered by sky divers at their launch—but the product flopped and was off the market by early 2015. The self-driving car ran into setbacks both literal (fender benders) and figurative (a handful of top Google engineers defected to start their own autonomous vehicle company). Overall, the Other Bets, the belittling term that Alphabet uses to refer to X and other business divisions not named Google, lost about $3.6 billion in 2015, roughly twice what they’d lost the year before.

  • Who hasn’t heard of Nike, the iconic shoe brand? Its trademark – the swoosh – is more than a logo. It’s one of the few icons instantly recognized in every corner of the world. Nike was founded by Phil Knight, who borrowed fifty dollars from his father and launched a company with one simple mission: import high-quality, low-cost running shoes from Japan. In 1963, in the first year of its operations, Knight’s company, which was called Blue Ribbon back then, grossed eight thousand dollars. Today, Nike’s annual sales top $30 billion. Shoe Dog is a candid and riveting memoir by Phil Knight about first 18 years of his experience building Nike. It’s nothing less than a business thriller. The book was also recently recommended by Bill Gates. Here’s an excerpt from the book…

    Driving back to Portland I’d puzzle over my sudden success at selling. I’d been unable to sell encyclopedias, and I’d despised it to boot. I’d been slightly better at selling mutual funds, but I’d felt dead inside. So why was selling shoes so different? Because, I realized, it wasn’t selling. I believed in running. I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in. People, sensing my belief, wanted some of that belief for themselves. Belief, I decided. Belief is irresistible.

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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.

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