[The Weekend Bulletin] #191: Two Types of Convictions, Running to the Roar, Yak Shaving, .
... Mapping Any Industry, 5 Fatal Investing Misconceptions, Secret To A Successful Investment Strategy, Managing Time, and more.
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading
[Update: This newsletter will be on a break next weekend. We'll resume from the second week of April onwards.]
Investing Wisdom
Using a case study, a professor lays out a 10-step iterative process that anyone can use to understand / map any industry in this article. A reasonably detailed and handy process.
In this letter, an investor ruminates about the two types of conviction - explicit (that which comes from numbers) and implicit (that which comes from the gut). He talks about how the two types of convictions should work in parallel, but how often that are in a conflict witg each other. He then digs into some of the factors that help develop an implicit conviction.
This article lists 5 fatal misconceptions that investors draw when learning from some of the better known investors. I have personally had to overcome some of these misconceptions over the years (it is still work in progress).
This article narrates the story of a successful investor to showcase that investment strategy need not be complicated. A seemingly simple strategy (3 criteria to buy and 1 to sell) can also work over the long term. The article further emphasizes a factor that matters more than the nature of the investment strategy over the long term.
Mental Models & Behavioral Biases
Last week we learnt about the Zeigarnik Effect - how unfinished tasks occupy mental resources, similar to too many open tabs on a browser draining the processing power of a computer. One of the reasons behind a lot of open tabs on your browser could be that you started reading about X, wanting to understand it in detail, but through multiple links ended up reading about Y (remember that time when you searched for a health condition based on some symptoms that you were experiencing and ended up reading about cancer). This is a phenomenon that this article calls 'Yak Shaving'. It explains how this happens and what can we do to overcome it.
Personal Development
Using the metaphor of an under-utilised prime real estate, this short note provides a very important lessons on time management.
In this podcast interview, a retired squash coach talks about overcoming fear (running to the roar) and anxiety, managing your emotions and that of others, resolving conflicts, timing in communication, and more. His metaphor of the Oreo cookie stayed with me the most. A worthy listen.
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 114:
Investment Philosophy is a fancy term in the world of finance. Everybody has one. However, not everyone uses it effectively. Most times, it serves as a good marketing tool. Some, however, know its real power, like the author of this article who breaks down the philosophy in to a few basic questions.
On a related note, about a year ago, I had penned an article on the subject for a magazine here.
This article narrates a very interesting story concerning the US's efforts in Afghanistan and draws some investing lessons on due diligence - another subject that everyone talks about, but very few follow. A very interesting read.
Some quick lessons from the greats:
Margin of Safety has traditionally been understood as the gap between price and intrinsic value estimate. However, given the inaccuracies that can creep into the an intrinsic value estimate, this article looks at margin of safety from a very different and interesting perspective. It also provides an interesting argument towards investing in slow growth businesses. This one is guaranteed to give you some fresh perspectives.
Often, the smallest changes can make the biggest difference. Like how a small change in perspective can redefine a problem in to an opportunity. Here are 10 visuals that will help you rethink the problems that are struggling with.
Quotable Quote(s)
" Life appears to be a multi-player game of you against the environment & other players.
In reality life is a single-player game of you against your biological reward functions."
- James Wang
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That's it for this weekend folks.
Have a wonderful week ahead!!
- Tejas Gutka
[Mar 23, 2024]