The Weekend Bulletin (Vol. 1 | Iss. 12)
A weekly digest of some interesting stuff from around the world-wide-web for the discerning investor.
Volume 1 | Issue 12 | February 08, 2020
Before we get into our usual sections, I wanted to share this quote that I thought was so profound. It captures the very essence of this bulletin.
Reading is like a software update for your brain.
Whenever you learn a new concept or idea, the “software” improves. You download new features and fix old bugs.
In this way, reading a good book can give you a new way to view your life experiences. Your past is fixed, but your interpretation of it can change depending on the software you use to analyze it.
Section 1: Investing Wisdom
This article touches upon a tenet of investing that remains highly under-appreciated. Investing is not a binary operation - either black or white. Rather, like most things in life, the best of investing lies in the gray. A good investment philosophy finds a balance between opposing forces.
What better way to learn investing than by studying the Masters. And what better investor to study than the one who is the only investor to beat the S&P 500 for fifteen consecutive years. This article provides a good overview of legendary investor Bill Miller's investing philosophy and process.
In the quest to become better investors, we have all read about the ideal investee company. Seldom, however, is something written about or sought on being an ideal investor. This post attempts to answer the oft forgotten question: how should investors engage with their investee companies?
Section 2: Mental Models & Behavioral Biases
Most of us are conditioned to prefer a bird in hand against the two in the bush. But what if there are conditions where the two in the bush offer a better deal? That's the mental model of this week: Hyperbolic Discounting.
(In some ways this mental model requires one to have a balance between greed and instant gratification - two opposing forces as referred to in the first article in Section 1.)
Section 3: Personal Development
There are positive feelings (happiness, pride etc) and there are negative feelings (shame, guilt etc). While we all like positive feelings, we detest negative ones. However, rather than detesting them, we can use the negatives feelings for positive outcomes. For instance:
Section 4: Trivia
This is interesting: the average cost of opening a fast food franchise ranges between $0.77m-$1.9mn.
While Chick-fil-A appears to be the cheapest on the above chart, it is the toughest franchise to open.
The entire article makes for a pretty interesting read, if you are a QSR enthusiast.
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Have a wonderful weekend!!
- Tejas Gutka.