[The Weekend Bulletin] #58: Mario Cibelli, Nicholas Sleep, Data Driven Insights...
...Learning, Breathing, and more...
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.
Let's kick-off this issue with an interesting story that I read recently:
"More than 40 years ago, a humble farmer named Jadav Payeng started to plant trees on a desolate river island. Known as “The Forest Man of India,” he planted tens of thousands of trees — bamboo, cottonwood and other varieties. What was once a barren sandbar blossomed into a 1,300-acre forest teeming with birds, monkeys, elephants and even tigers.
As he told NPR, it was his way of honoring nature. His small act of appreciation, planting seeds every day, grew to something beyond anything he could imagine."
This little story has far-reaching consequences for our lives. This is not just a lesson in humility, but an education on the many aspects of life - from investing to learning to giving to personal development. Aptly titled, 'What You Appreciate, Appreciates', this post explains how.
Section 1: Investing Wisdom
"If you stare at something for long enough, sometimes certain patterns reveal themselves."
The deepest of insights can often come from the simplest of places. For instance, analysing codes on the back of envelopes in which CDs were shipped back in the days helped the team at Marathon Partners understand customer churn at Blockbuster, which eventually helped them become early investors in Netflix. This conversation reveals the many benefits of scuttlebutt investing. Very informative and highly recommended listen.
There is something about the name Marathon and deep insights. Coming out of another Marathon (Asset Management) is famed investor Nicholas Sleep (known most for pioneering the 'scale economies shared' mental model). He has hitherto maintained such a low profile that he has been jokingly referred to as the “Keyser Söze of investing”, in reference to the enigmatic character in The Usual Suspects. Recently, a collection of his investor letters surfaced on the internet, opening a window in to his thought process. This article summarises some of them, and also has the link to the said letters for a more detailed read.
From timeless wisdom, let's now shift focus to some timely data driven write-ups about the current times:
First up is a very interesting piece that looks at the 2020 market boom through the lens of some very interesting data. A few surprises emerge from this easy short read.
Nick Maggiulli always has some interesting data points for us to look at. In a recent post, he analysed the past all time highs of the markets to find answer to the question "Should You Buy An All-Time High?".
Giving a twist to the above data is this video by Charlie Bilello (another great data hacker) that talks about "the story of Bob, the world's worst market timer. Follow along on Bob's journey as an investor who had the misfortune of only investing his savings at the peak of the stock market just before a crash. The results may surprise you."
Lastly, the new year is always a good time to revisit old lessons. Here are some market lessons presented as 20 rules that will help you navigate the markets in 2021 and beyond. Another great post from Charlie Bilello.
Section 2: Mental Models & Behavioral Biases
Two economists recently published a paper with a taxonomy of what they call “behavioral biases,” numbering 17. “Biases are more rule than exception. The median consumer exhibits 10 of 17,” says the paper by Victor Stango of the University of California-Davis Graduate School of Management and Jonathan Zinman of Dartmouth College. This article lists those 17 biases with a short explanation and also the correlation that they exhibit with cognitive skills (apparently, your cognitive skills make you more susceptible to some over others).
Section 3: Lessons From History
Hindsight is 20/20. It's very easy to look at past every and pin point turning points. However, reality is twisted - it is never that simple. This twitter thread reminds us about this fact by looking at the tech bubble and drawing some eye-opening lessons.
Section 4: Personal Development
"Breathing is, for most people, the missing link to great health."
Would you be surprised to find out that most modern humans actually NEED more CO2 in their body? This amazing post on 'breathing' provides some astonishing perspectives and a simple technique to improve your health.
"The trick to learning more and having more success is finding the right way to frame the learning process."
Using the Super Mario game as an analogy, this TED talk provides a fresh perspective to making learning fun. Please don't skip this one.
Section 5: Trivia
IPOs are outperforming the S&P 500 by 8x YTD.
The SPAC (special purpose acquisition company) window opened, too. Last year, if you’d asked the average person on the street what a SPAC was, they’d stare at you blankly. Now, they’d list ten they own and ask you to please back away from their Ferrari.
While serious people deride SPACs as Robinhood-trader catnip, the newly-popular financing method serves a purpose. SPACs inject capital into projects previously deemed too risky for the public markets, and lowers the cost of capital for innovation.
SPACs aren’t new. They slowly built up steam prior to 2020. From 2010 through 2019, the number of SPACs grew at a 27% CAGR, from seven in 2010 to 59 last year. But this year, they broke out. In 2020, the number of SPAC IPOs quadrupled.
Source: https://notboring.substack.com/p/the-best-is-yet-to-come
Quotable Quote
Here's one for those New Year Resolutions:
"Improvements are only temporary until they become part of who you are.
- The goal is not to read a book, the goal is to become a reader.
- The goal is not to run a marathon, the goal is to become a runner.
- The goal is not to learn an instrument, the goal is to become a musician.
This year, focus on the identity you want to build."
Source: Atomic Habits (James Clear)
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That's it for this weekend folks.
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Have a wonderful week ahead!!
- Tejas Gutka
[Jan 09, 2020]