The Weekend Bulletin (Vol. 1 | Iss. 11)
A weekly digest of some interesting stuff from around the world-wide-web for the discerning investor.
Volume 1 | Issue 11 | February 01, 2020
Section 1: Investing Wisdom
Time and again, a fundamental principal of investing gets broken. And time and again, an old lesson is repeated: An obsessive focus on the upside eventually leads to downside, as risk-management takes a back seat. Here is a recent example of highly regarded business facing the consequences of it's aggression.
On the other hand, excessively fearing the downside, to the extent of sitting on the sidelines, waiting for a correction can be a nerve wrecking experience too. Investors pay a very high opportunity cost by staying out of markets waiting for a better entry point, argues this article.
Section 2: Mental Models & Behavioral Biases
In the time that will take you to read this sentence, 10,000 new tweets will appear on Twitter. If this pace of information broadcast overwhelms you, then this article will provide an interesting perspective to you: Information overload is not as big a problem as we seem to feel it is.
Section 3: Lessons From History
A form of confirmation bias is easily connecting with people who hold views that confirm with ours' - on politics, religion, future etc. This kind of a confirmation bias, however, can prove to be extremely dangerous in the world of finance. Since financial industry largely operates on trust, easily trusting someone with similar views can lead to catastrophic outcomes, as this story about the sale of Eiffel tower suggests.
Section 4: Personal Development
The following quote carries the weight of an entire article:
"You are only as mentally tough as your life demands you to be.
An easy life fashions a mind that can only handle ease. A challenging life builds a mind that can handle challenge. Like a muscle that atrophies without use, mental strength fades unless it is tested.
When life doesn't challenge you, challenge yourself."
Approaching the above concept in a slightly different manner is Carol Dweck's fixed vs growth mindset. A fixed mindset looks at tasks as doable or impossible. On the other hand, a growth mindset seeks to operate just outside the boudaries of current abilities, thereby stretching the boundaries over time. This seven minute read is a good place to start understanding this concept.
Section 5: Trivia
In light of India's republic day that was celebrated last weekend, here is a collection of some interesting trivia on the country (twitter thread below).
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Have a wonderful weekend!!
- Tejas Gutka.