[The Weekend Bulletin] #82: 3 Long Talks, 1 Important Question, and 1 Bad Behaviour.

Jul 03, 2021

A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.

Welcome to the second half of 2021.

When the pandemic hit us last year, and the lockdowns began, one wondered how we'd tide over them. And here we are, having spent more than year cycling through lockdowns and opening-ups. As they say, the days pass slowly, but the years fly by.

This applies not just to days, but also to habits. When we start a new habit, it seems arduous and almost impossible. As we struggle to build the habit, we are often enticed to give up. And most times, we do give up after a few failed attempts. However, there are a few times when we persevere. And over time, those things become less arduous and more routine, eventually becoming a natural part of our day - a habit.

What is the one habit that you are trying to form currently, or have been wanting to form but don't know how? If you can define your struggles (they could be as simple as learning to write with the left hand), I can put out a question next week and seek answer from some of the readers who have been successful in building that habit. This way, we can leverage this community by gaining from each other's experience.

So feel free to tell me about your struggles (simply reply to this email) and I will seek help on your behalf (you can remain anonymous if you so choose to). To set the ball rolling, I'll share one habit that I have been working on for some time now in the next issue.

Now, back to business.

Section 1: Investing Wisdom

Following the interview with Manish Chokhani (that we looked at in Issue 80), Vishal Khandelwal put up yet another great interview. In episode 2 of The One Percent Show, Vishal talks to Vinod Sethi (ex MD & CIO of Morgan Stanley India), someone who has maintained a low public profile all these years. In terms of the quality of the conversation, this one picks up from where the first episode ended and raises the bar higher - totally worth the 2.5 hours length of it.
Going back to Manish Chokhani, in a recent presentation on 'Disruption and Capital Markets', he explains how disruptions impact valuation multiples and explores some interesting disruptions underway currently. Loved the part where he demonstrates how valuations multiple change as businesses face the threat of disruption. (h/t to @anandvardarajan for sharing this)

Section 2: Mental Models & Behavioral Biases

This talk has taught more people about biases than any book, in my view. Without taking away anything from the greats like Daniel Kahneman and Amos Tversky whose pioneering works gave us the field of behavioral psychology, I am sure a number of people were introduced to the field thanks to Charlie Munger. This talk was the snowflake that started the snowball of understanding biases rolling for me. This should definitely be on top of pile of our 're-reading' list. (h/t to @ScarrottKalani for reminding us about this talk in his latest newsletter)

Section 3: Personal Development

Going back to our discussion on building habits, one of the reasons that we fail at building habits is that we do not like to go through the grind. Who wouldn't love to be in great shape? But who wants to suffer from eating healthy and exercising daily? Who wouldn't love to wiser? But who wants to spend time reading when you can simple Netflix? While we all understand that there is no gain without pain, we fail to appreciate it. Therefore, instead of thinking about what you want from life, relationships, work, etc, it would be better to consider the question 'what pain do you want in life?'. This article explains further.
Talking about Netflix, we've all experienced that time when we have had a long and busy day at work. We come home tired and exhausted. However, instead of getting rest, we turn on Netflix. This habit of not taking rest when you need the most is called 'Revenge Bedtime Procrastination'. This article explains why it happens, and how we can avoid it. (Grudgingly, I have to admit that I often fall a victim to this behaviour).

Section 4: Blast From The Past

We consume a lot interesting text in our quest for knowledge. However, with each new byte of data that we feed into our memory, we lose some bit of old information that was held. Even without the addition of new information, our memory regularly cleans our information that is held deep and not often retrieved. If is for this reason that re-reading old texts (books/articles/notes) is highly recommended.

There are other advantages to re-reading. Spaced repetition for one - when we revisit some old material, it is etched better into our long term memory. More importantly, as we gain more experiences in life, re-reading an old text can provide some fresh perspectives that we may have missed while reading earlier.

It is to reap these benefits that this section revisits article/s from an earlier issue. Below are articles from the tenth issue of TWB:

This article makes an important research-backed assertion in the active vs. passive argument. As per the authors of this article, it is not that active managers cannot generate alpha. On the contrary, active managers are good stock pickers. How then do they underperform? Read on to find out.
Want a great investment advice? Try SOYA - not the bean but the art of 'sitting on your ass'. Great investments are hard to come by. Therefore, when you find one, sit tight. That is the secret sauce of most great investors, as per this article.