10 insights from HBO’s 2017 ‘Becoming Warren Buffett’ we hadn’t heard before

HBO released a documentary ‘Becoming Warren Buffett’, on the legendary investor earlier this year. It’s an almost intimate portrait of the most-quoted investor in the world. Worth the 1h 28mins. And summarized below, some of the more insightful  (and less often heard) nuggets providing insight into the man, and not just the investor. 10. On learning from the past: Decorated his office with framed old newspapers from the local library of days of massive market crashes. He calls it “instructive art” that reminds him and everyone in the building that “in the markets, anything can happen” 9. On the circle of competence: “Investing

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Mean Reversion: The Value Investor’s secret weapon

  Successful Equity Investing To become an equity investor, you need three foundational elements: to tell a fundamentally strong company from one that is not based on it’s financial statements, it’s business model, and the dynamics of it’s industry to put those fundamentals in the context of the prevailing market price and how those prices are subject to variation based on swings in the nebulous concept called market sentiment, and to recognise, and protect against the potential influence of those market sentiments on our decision-making i.e. our susceptibility to behavioural biases when making investment decisions These elements are common sense, but they take a lot of conscious effort

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Five great free value investing resources

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.” – Charlie Munger And so, here’s a short list of valuable value investing resources that I’ve found, offer insight into developing that mindset essential to successful investing. You’re much better off spending your time absorbing the content from resources like these than seeking out ‘Buy’ and ‘Sell’ recommendations in the pink papers. Farnam Street farnamstreetblog.com Named after the street in Omaha, Nebraska where Berkshire Hathaway keeps it’s headquarters, Farnam Street is run by Shane Parrish, who apparently worked with

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What bad design can teach us about investor behaviour

Shower controls and Jet Lag I am currently reading a book on design called The Design of Everyday Things by Don Norman. As opposed to the usual sources of reading recommendations from friends, websites top 10s or the ubiquitous Amazon recommendation engine, I came across this book when letting off frustration on google. Let me explain. For a long time, my professional designation was “management consultant”, a profession that gets its fair share of eyerolls and wisecracks, not unlike… “If you see a consultant on a bicycle, why should you never swerve to hit him? It might be your bicycle.”

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Don’t Ask, Can’t Tell

Our (lack of) self-awareness Let’s do a quick quiz to determine what makes you happy. Rate the following on a scale of 1 (very little) to 5 (a great deal) depending on how much each item causes your mood to fluctuate on any given day: How well your work day went Amount of sleep you got the preceding night How good your health is How good the weather is Whether you had sex Day of the week Now, if I were to then on a daily basis, ask you, how your day went, your response should have a relationship with your

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Guy Spier’s Eight Rules for Value Investing

I just finished reading Guy Spier’s “Education of a Value Investor: My Transformative quest for Wealth, Wisdom, and Enlightenment“. The author first made news when he and Mohnish Pabrai bid $650,000 for one lunch with Warren Buffett. This book talks about what led to that lunch and what he learnt from it. More importantly, it’s a tell-all autobiography of how he went from the often subtly, sometimes blatantly immoral world of investment banking to setting up his own fund, modeled on the principles espoused by the legendary Buffett. In the process he provides an unvarnished look into the arrogance, hubris and insecurities that stem from

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Seven Life Learnings for Investors

I subscribe to a website called brainpickings.org that is a beautifully curated set of articles about books on a variety of life topics. I’ve come across many excellent reading suggestions from this treasure trove. A couple of years ago, the founder of the site, Maria Popova, wrote a post called “7 things I learned, in 7 years of reading, writing, and living“. As I read through the learnings, it occurred to me how relevant they are even to something as material as wealth and its pursuit. So, borrowing heavily from Maria’s article, here are the Seven life learnings for investors, for the worthy

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Let your baby play in the mud or the value of experiments

Expert Advice or Who to believe Adapted from the book Mindware – Richard Nisbett We get it all the time. Advice meant to improve our careers, our children, our bodies, our lives. Only, a lot of it is often contradictory. And unlike twenty years ago when there were three national dailies, two television channels and 1 radio station,  there’s an unending stream (literally) of tweets with links to online self-improvement resources. It’s the same with investing. “Time to buy consumer staples” “Get out of commodities” “Cyclicals are the next mega trend” or even “Sell Everything!“, the warning from the good folks at RBS in

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Have you been framed?

Nicotine addicted monks and framing You have probably heard this one about the two trappist monks. Monk 1 asked his abbot whether it would be alright to smoke while he prayed. Scandalized, the abbot says “Of Course Not! That borders on sacrilege!” Monk 2 asked his abbot whether it would be alright to pray while he smoked. “Of Course” says the abbot, “God wants to hear from us at any time” The way the same information is presented to us has an impact on how we process and react to it. This effect is called ‘Framing’. Next time you pick up a pack of

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