12 Axioms of Risk Reward followed by generations of Swiss Bankers

How is it that Switzerland, a tiny country, poor in natural resources and arable land, has one of the highest per capita incomes and standards of living in the world? This is the enticing premise with which Max Gunther opens his book The Zurich Axioms: The rules of risk and reward used by generations of Swiss bankers “The Swiss did not become the world’s bankers by sitting in dark rooms chewing their fingernails. They did it by facing risk head-on and figuring out how to manage it.” And therefore, the author says, there is a lot to learn about how

Read more

The power of compounding and how it applies to a better life

“What if you didn’t define wealth by money, success or satisfaction, but simply by the number of great people in your life?” A question put forth by Peter Attia, M.D. in his podcast “How to live a longer, higher quality life” on the excellent investment blog “The Investor’s field guide” by Patrick O’Shaughnessy. The conversation goes on to link the simple yet powerful investing concept of compounding with living a better quality of life. Read on for the highlights of a wide-ranging conversation. So you want to live a long life? “Never try to solve a complicated problem without explicitly stating your objective, your

Read more

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

Read more

Deep Work: Rules for focussed success in a distracted world

Three quick questions: How many times do you think you checked your phone today? If you’re reading this on a laptop or PC, how many browser tabs do you currently have open or have had open in the last hour? How many work emails did you receive and send today? What do the answers to these questions have anything to do with anything? Plenty, it turns out, according to Cal Newport’s book Deep Work. Cal is an Associate Professor of Computer Science at Georgetown University with a Phd from MIT. His focus has been on understanding  how to perform productive, valuable

Read more

Everybody’s doing it

In one of his memos at Oaktree Capital, Howard Marks refers to the market as a pendulum swinging between greed and fear. That at any given time, the pendulum i.e. the general consensus tends to be either too greedy or too fearful, and it is when the pendulum is at its fearful extreme that the value investor comes into her own to make intelligent buys. This will sound familiar to most investors. “Mimicking the herd invites regression to the mean” – Charlie Munger “Be fearful when others are greedy and greedy when others are fearful” – Warren Buffett The point of this post is

Read more

Beware advice from the successful

Survivorship Bias OR How a mathematician helped win a war In 1942, in the middle of the bloodiest wars ever seen, the United States military, brought together some of the brightest minds borrowed from the top universities around the country and called it, the Applied Mathematics Panel. “Here is how it worked: Somewhere inside the vast machinery of war a commander would stumble into a problem. That commander would send a request to the head of the Panel who would then assign the task to the group he thought would best be able to resolve the issue. Scientists in that group would then

Read more

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.” A regular

Read more

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

Read more