[The Weekend Bulletin] #125: Sell in May?, Conservative Investors Sleep Well?, Do We Learn From The Past?,...
...Right Investing Mindset, Wisdom of the Crowds and Independent Thinking, Silence, and more.
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.
Hi,
Sending this from one of the tiger reserves in India. Here are some postcards before we get to business:
Section 1: Investing Wisdom
Popular market wisdom says 'Sell in May and Go Away'. Similar beliefs are help about some other months. But what is do peculiar about selling in May, and does it really work? This article has scanned history to find the answer, and its not what you think it is.
Nearly two decades after his book 'Common Stocks and Uncommon Profits' released, Phillip Fisher released another lesser known book, 'Conservative Investors Sleep Well'. As the name suggests, the book was about making conservative investments wherein Phil laid down some characteristics of conservative investments. A lot has changed since then (or not!!). Does conservative investing still work in today's fast paced, highly disruptive world? This article analyses long series of data to find the answer.
As a side note, conservative concepts usually find ear only when markets are in a downturn. Now may be a good time to discuss them, but the best times to remember them are during roaring bull markets.
Here are five simple but powerful questions that every investor should answer before making an investment. Since investing is as much about the state of our mind, as it is about its ability, these questions will ensure that you are in the right state before making a decision.
In this short interview, Nobel Laureate Richard Thaler talks about why it is important to learn from history, and why we are incapable of learning from the past.


A recent interview of Stanley Druckenmiller with Stripe cou-founder John Collision has been widely circulated on social media. While one part of the interview talks about Stan's views on current markets, the latter half of the interview deals with his own investment philosophy. There are some good takeaways from the interview, a few of which are summarised by Michael Mauboussin here (the whole interview is linked at the end of the thread).
Section 2: Mental Models & Behavioral Biases
Below are two articles that make for a very interesting read. Both talk about the wisdom of the crowd - how it is a powerful model of prediction, and how the model can break easily (i.e. why it doesnt work in the markets often):
Section 3: Personal Development
The effects of sound on the mind - like that of slow music in soothing the mind, fast and loud beats in increasing adrenaline, etc - are widely known. However, not a lot is talked about the absence of sound - Silence. This long form article discusses the findings of some of the research that has been conducted on the impact of Silence on our brains. Read it for your own benefit.
Graduation speeches are some of the best places to look for advice. But they are long, and many. The author of this article took the pain of listening to 100 speeches and culling out some common advice. A short read.
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 #50:
One way to summarise investing would be: postponing today’s consumption to a later date. Every unit of currency that we decide to not spend today, goes into a pool that we can dip into when the well of regular income dries up. While we understand this very well, the challenge really arises as our incomes start to rise. The comfort of an increasing stream of cash inflows can make us complacent about our savings rate, argues this article. Before you go on to read to the article, answer the following question:
Say you are currently saving 50% of your income. Through a combination of hardwork and some luck, say you land a 30% raise in your annual take home. How much of this incremental 30% should you be saving in order to maintain your overall retirement goal? If your answer is 50% or lower, then you are WRONG. In fact, you would be wrong even if you had guessed 60%. The actual number is HIGHER than 70%!! Surprised? Read the article to find out why.
Given the choice between a 2% alpha generating fund but a low market return, and a high cost (2% p.a.) index fund in a market that returns above average, which one would you choose? This article presents an interesting paradox between alpha and beta, asking you to ignore the former over the latter.
Section 5: Readworthy Passage
Let's read together a random, but read-worthy, passage from a randomly picked book.
- From The Premonition by Michael Lewis
Courtesy: this tweet
Quotable Quotes



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That's it for this weekend folks.
Have a wonderful week ahead!!
- Tejas Gutka
[Jun 18, 2022]
I just wanted to know how do you go about selecting what to read from the "already read pile". Is there a set process or you randomly pick from the pile?