[The Weekend Bulletin] #123: The Power of Not Knowing, or Remembering; Mutually Assured Destruction;
Ian Cassel, Hummingbird and the Poison Tree, Persistence, and more.
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.
Section 1: Investing Wisdom
Are past mistakes good teachers for future actions, or do they act as an anchor holding us back, or both? That is the question that this post is attempting to answer. It contemplates whether we are better off forgetting our past or not.
We've in the past looked at how investing is the act of balancing opposing forces, like strong convictions, loosely held. In this dated article, Ray Dalio talks about one such pair of opposing forces that he holds, thanks to a mistake he learnt from.
"When most people hear me describe this approach, they typically say, “No problem, I’m open-minded!” But what they really mean is that they’re open to being wrong. True open-mindedness is an entirely different mind-set"
Another episode from The One Percent Show that I really enjoyed. In this one, Vishal Khandelwal interviews Ian Cassel of the 'microcapclub' and 'intelligent fanatics' fame. Some of favourite snippets:
Section 2: Mental Models & Behavioral Biases
This fantastic long-form article talks about an interesting mental model called The Hummingbird Effect, and it's opposite called The Poison Tree Effect. If you want to understand how the invention of the printing press led to the development of micro-biology, or how some of the great economic collapses came to be (and how some then led to rise of tyrants like Hitler) then you must definitely read this article. The authors ability to connect ideas across domains and time horizons is truly commendable.
On a related note:
![Twitter avatar for @patrick_oshag](https://substackcdn.com/image/twitter_name/w_96/patrick_oshag.jpg)
![Twitter avatar for @patrick_oshag](https://substackcdn.com/image/twitter_name/w_96/patrick_oshag.jpg)
On similar lines, a model that will help appreciate the movie Red Joan (available on Amazon Prime) which is loosely based on history is Mutually Assured Destruction. The movie is about a lady who leaks British nuclear secrets to Russia, helping them develop their own nuclear bomb. While she was initially branded as a traitor, she defended herself as a hero, and indeed she was. This article will help you understand why.
Section 3: Personal Development
Two interesting short videos well worth the time:
A story from the Brahmavar Upanishad about Lord Indra that applies to all our lives
A snippet from the movie The Founder about the wonders of Persistence (h/t to Sean Delaney for sharing this)
Ray Kroc: "Now, I know what you're thinkin'. How the hell does a 52 year old, over-the-hill milkshake machine salesman... build a fast food empire with 16,000 restaurants, in 50 states, in 5 foreign countries... with an annual revenue of in the neighborhood of $700,000,000.00... One word... PERSISTENCE. Nothing in this world can take the place of good old persistence. Talent won't. Nothing's more common than unsuccessful men with talent. Genius won't. Unrecognized genius is practically a cliche. Education won't. Why the world is full of educated fools. Persistence and determination alone are all powerful."
Section 4: Blast From The Past
Revisiting articles from a past issue for the benefits of refreshing memory and spaced repetition, as well as for a fresh perspective. Below are articles from #48:
In this slightly dated interview, value investor Glenn Greenberg goes into the detail of his investment process that has helped him achieve the following:
"We started with $40 million (in 1984), 2/3rds of which was family money. By 2006 we compounded that to 100x its original value before fees just by concentrated invest- ment in pretty pedestrian, easy to understand businesses that seemed under-valued. That meant no turnarounds, no crummy businesses, no highly competitive businesses, and no tech businesses, which we didn’t understand. It was boring stuff.”
Proponents of the coffee can approach believe that great businesses deliver outstanding returns, irrespective of their valuations, over long time horizons. However, what they do not appreciate is that the long term is made up of a lot of short terms. More importantly, the long term may be a little too long for the average investor. This article draws from history to demonstrate this.
Section 5: Readworthy Passage
Let's read together a random, but read-worthy, passage from a randomly picked book.
Acting on symptoms
Take away the cause, and the effoct ceases.
- Miguel De Cervantes (from Don Quixote)
Sometimes we mistake an effect for its cause. There is a story about a man that was walking by a river when suddenly a screaming girl floated by. The man jumped in the river and saved her. After five minutes, another screaming girl floated by. He jumped in again and saved the girl. The same thing happened over and over again. The problem was a little further up the river. There was a man throwing girls from a bridge. Our hero solved the symptoms but not the cause of the problem.
"We have tons of problems. We are losing customers, we can't deliver on time, our inventory system doesn't work."
What is the core cause of these problems? Many times when we have a lot of problems, there may be one common reason for them all. When dealing with problems we must focus on what we want to achieve and make sure that we address the underlying cause and not act on symptoms that may look like causes. Maybe the symptoms were due to wrong policies or measuring instruments or goals, etc.
- From SEEKING WISDOM - FROM DARWIN TO MUNGER, by Peter Bevelin
Quotable Quotes
“As I came down from the mountain, I recalled how, not many years ago, it was access to information and movement that seemed our greatest luxury; nowadays it’s often freedom from information, the chance to sit still, that feels like the ultimate prize. Stillness is not just an indulgence for those with enough resources—it’s a necessity for anyone who wishes to gather less visible resources.”
— Pico Iyer in The Art of Stillness
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That's it for this weekend folks.
Have a wonderful week ahead!!
- Tejas Gutka
[Jun 04, 2022]