The Weekend Bulletin (Vol. 1 | Iss. 23)
A digest of some interesting reading material from around the world-wide-web. Your weekly dose of multi-disciplinary reading.
Volume 1 | Issue 23 | April 25, 2020
'Investing Is Simple, But Not Easy' is one of my favorite quotes about investing. For in five simple words it captures the entire essence of investing. Simple as there are a few basic tenets that have stood the test of time, that if followed will provide the best possible gains with the least possible stress. Not easy as the long term is made up of a lot of short terms. Short terms that will tempt you to give up at least one of the tenets of investing. Short terms that will not only test your patience, but also your belief. For instance, after seeing the charts below (source), one may indeed question the validity of 'investing for the long-term'.
These charts, and the current environment, are proof of why investing is simple, but not easy. Events such as these are the proverbial Menaka that seduces investors into breaking their long term focus (dhyaana).
It is purely coincidental, and some what circumstantial, that a large part of this week's issue is focused on the above.
Section 1: Investing Wisdom
This slightly dated presentation sets the context of why investing is simple, but not easy. Aptly titled 'Investing is Hard' it walks you through some real life situations of companies like Apple, Valeant, Altria, Softbank etc, to demonstrate why it is so.
Unpredictability of stock price movements in not the only reason that investing is difficult. It is also difficult because MOAT - regarded as one of the more important factors in fundamental investing - is not always reliable. For, as this article highlights, seemingly infallible moats can be filled, or an altogether new fort with different moat may come up elsewhere, leading to investors completely bypassing your fort.
Don't let the above two posts dishearten the long term investor in you, for not everything here is gloomy. The two articles below may be a ray of sunshine cutting through clouds of gloom:
This article summarizes a study of investing during crises, and provides a possible framework to deal with the current situation.
Don't like to invest on your own? Prefer to outsource it a professional. This article may provide some guidance in choosing a good one. It looks at the kind of managers that do well during volatile times and why.
Section 2: Mental Models & Behavioral Biases
If you were to call the current pandemic is a 'black swan' event, then an irritated Nassim Taleb would quickly correct you that it isn't. His ideas, while profound, and providing a good model to understand complex systems, are sometimes a little hard to understand fully for us mere mortals. Therefore, someone took the efforts of simplifying them - for a 11 year old. Wisdom, and simplicity!!
Section 3: Lessons From History
A little humor from history to lighten up the mood. The first totally honest stock market report ever.
Remember the recent Hermes episode in China? Apparently, it was not a one off; it had a historical precedence. One that led to the establishment of the fashion industry. How the worst pandemic in human history prompted the birth of Italian luxury - Bonkers!!
Section 4: Personal Development
In a casual conversation about work from home, someone recently mentioned to me that his days are now longer than usual. The boundary between work and home have blurred and he is often working the graveyard shift. A number of research suggests that drawing lines between our professional and personal lives is crucial, especially for our mental health. But it’s difficult, even in the best of circumstances. This article has some advice for you.
Section 5: Trivia
When shit hits the fan, help comes from unexpected quarters. Two seemingly unrelated idioms are brought to life by a company selling Steaks. Yes you read that right. Frozen meat product company Steak-umm’s official Twitter account has taken to philosophy so as to bring cheer amidst the virus scare. Below are some interesting tweets from the account:
Bonus Section
Have a lot of free time on hand and don't know what to do? The following are some high time-involvement activities that you can take up to fill the void. Under normal circumstances, you'd always find the 'too busy' excuse to take these up.
In light of the world book day, here is a list of some wonderful books, and why you should read them.
Social distancing can be daunting. Isolation can drive many crazy. A lot of things can help soothe nerves during such testing times - music, reading, binge-watching, gaming, or writing. While each one of us have our own preference, if your's is writing, then here is an interesting project that will keep your creativity high each day. “The Isolation Journals” a project by Suleika Jaouad is intended to be “a 30-day creativity project to help make sense of challenging times.” Everyday, you receive a prompt from some of Suleika’s favorite writers, artists, and musicians about a topic that you can then journal about. While this project was meant to run for the month of April, you can join it posthumously by checking out the past prompts here.
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Have a safe and secluded weekend!!
- Tejas Gutka.