[The Weekend Bulletin] #56: Year End Reflections (Of The Philosophical Kind)
Timeless wisdom dealing not with the how, but with the why.
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.
There is an old saying that 'where science ends, philosophy beings'. Then there is the belief that what we call science today originated from philosophy. Without worrying about the order, let's just agree that both philosophy and science together help us make sense of the world.
Science deals with observable facts, while philosophy deals with the exploration of values, morals, meaning etc. Given its objectivity, science gets far more attention than philosophy in the way we approach learning. However, that does not make philosophy any less important. The two, in fact, are intertwined like knowledge (knowing facts, understanding patterns) and wisdom (knowing when and how to use your knowledge, applying first principles).
This issue is an exploration of such wisdom. The articles in this issue explore some important questions around investing; questions that deal not with the 'how', but with the 'why'. These meditations will help us make better use to the various tenets of investing that we have learnt through the rest of the year.
Section 1: Investing Wisdom
In the race to accumulate wealth, it is important to not lose sight of the finish line. Most of us get so lost in the accumulation, that we forget both, the reason we started in the first place, and the destination that we set out for. This article serves a nasty reminder that 'we may run of time, before we run out of money'.
"...how money can take control of your time and your life…if you let it. Don’t. Because you probably won’t spend all of your money, but you will spend all of your time."
The trifecta of Morgan Housel, Patrick O’Shaughnessy, and Nick Maggiulli produce some of the best investing related content there is. More importantly, they are extremely consistent, in the frequency of putting out content as well as in the quality of the content. This article discusses excerpts from four articles that have provided the most wisdom in this year. In about 12 sentences, these provide such interesting perspectives towards life in general, and investing in particular.
Speaking of the brilliance of Morgan Housel, here is one of his latest which tells us that not everything that can be counted counts. It asks us to measure what matters. Simply brilliant piece of writing.
Think of this article as a crash course in investment thinking. It is a brief summary of Yen Liow's recent talk at Value Investing Pioneer conference organised by the CFA institute. While the video has not been put out yet (we'll hopefully look at it in a future issue), this short read is a good reminder of all that matters in investing.
"Investing is like a sport. Just like any sport, one has to train hard to reach excellence. Barriers to entry are extremely low but barriers to excellence are extremely high."
Section 2: Mental Models & Behavioral Biases
Mike Tyson famously said, "Everybody has a plan, until they get punched in the face". This applies to life as much as it does to boxing. Getting punched in the face, being knocked down, these are the true tests of one characters. This article explains why. In the words of Rocky Balboa, "It ain't about how hard you hit. It's about how hard you can get hit and keep moving forward." In terms of investing, your conviction in your investment philosophy/idea matters the most when it is not working, not when it is making you good money.
"You’re only as good as your worst day. Not because what you do the rest of the time doesn’t matter. Not because you should be expected to be perfect under immense stress or to behave according to plan when everything goes awry. But because..."
Section 3: Lessons From History
This article looks at the story of A. Newton Plummer and how gullible investors lost tons of money because of him in the 1920s. You can observe glimpses of this in how a number of businesses today are dressed up on various media like whatsapp and news channels. Beware! don't let history repeat itself.
These are not really lessons from history, but from a particular year. Authored by your's truly, this newsletter is a look back at the year 2020 to draw some timeless lessons that it reminded us of.
Section 4: Personal Development
Every faith has an ascetic element - requiring one to give up on some form of pleasure for a certain time period. It's called by different names and carries different meaning in the various faiths, however the underlying principle is the same - to train your body, and your mind, to let go. Such abstinence from worldly pleasures can influence your personal finance decisions as well, as explained here using Benjamin Franklin's experiment.
We'd all have seen the below image on the internet. Ikigai is a Japenese term that means a reason for being. It is a concept that helps you to find the convergence of that which you love, that which you are good at, that which you can get paid for, and that which the world needs. The concept is so simple that it has also been called the secret to a long and happy life. This twitter thread, a summary of the book Ikigai, takes the concept and converts it into byte-sized directives that you can easily absorb and apply to your life. This can very well be the gateway to a more fulfilled life. A very well written book and summary.
Quotable Quotes
Four Basic Principles of Trading from over 300 years ago:
How to Live on 24 Hours a Day:
This reminded me of Seneca's famous letter, 'On The Shortness of Life' written over 2000 years ago on how we treat time as an infinite resource, wasting most of it.
***
This issue started and ended on the subject of time. Once again I am reminded of something that I love and that is deeply philosophical. Coming from a rock-band, this might sound unusual. However, most songs of this band are deeply philosophical and to that extent, it is more peculiar than unusual. The band being discussed here is Pink Floyd, and the song is called Time.
Ticking away the moments that make up a dull day
Fritter and waste the hours in an offhand way
Kicking around on a piece of ground in your hometown
Waiting for someone or something to show you the way
Tired of lying in the sunshine, staying home to watch the rain
You are young and life is long and there is time to kill today
And then one day you find ten years have got behind you
No one told you when to run, you missed the starting gun
And you run, and you run to catch up with the sun, but it's sinking
Racing around to come up behind you again
The sun is the same in a relative way, but you're older
Shorter of breath, and one day closer to death
Every year is getting shorter, never seem to find the time
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over, thought I'd something more to say
Home, home again
I like to be here when I can
And when I come home cold and tired
It's good to warm my bones beside the fire
Far away across the field
The tolling of the iron bell
Calls the faithful to their knees
To hear the softly spoken magic spells
***
That wraps up our last issue for this year. Here's wishing you a very Happy New Year. Let's hope and pray that the new year brings along lots of joy, fulfilment, and wisdom.
If you enjoyed reading this issue -> please hit the like button
If you have any feedback/interesting articles that you’d like to share -> simply reply to this email/leave a comment below.
Have a wonderful week ahead!!
- Tejas Gutka
[Dec 26, 2020]