Investors often get caught up in short-term market fluctuations and noise. The Stockdale Paradox underscores the importance of maintaining faith in the long-term prospects of your investments. This perspective can help prevent knee-jerk reactions to market volatility. By confronting the brutal facts of the market, investors can avoid the trap of overconfidence and make more measured choices.
These choices include investing with a margin of safety, not succumbing to FOMO, and avoiding bad businesses that may be benefitting from short-term tailwinds.
As S Naren mentioned in his presentation the right allocation strategy now is to focus on your debt portfolio and shift some corpus from equity, to lock in the high rates that might last a few quarters more.
Measuring some of the downsides of wealth is so much harder and more nuanced. They can be so nuanced and hard to measure that many people won’t even believe they exist.
When the benefits of money are so obvious but the downsides are so subtle, the downsides you didn’t anticipate can be more jarring than the benefits you expected.
Losing money, or losing happiness when you have money - those stories tend to have common denominators. They are so common you can call them laws.
Most of what makes you happy in life has nothing to do with money, and realizing that once you have money can be a painful admission.
What you think is admiration of your success may actually be envy.
The richer you become, the less likely people around you are to tell you when you’re wrong, crazy, mean, or oblivious.
Sometimes what made you successful was worry and anxiety, and you can’t let go of that when you’re rich.
There is no easy way to manage wealth and kids.
Quick wealth is fragile wealth.
Reputations have momentum in both directions because people want to associate with winners and avoid losers.
Expectations can rise faster than income, so a higher income sends expectations spiraling out of control.
I hope you are able to access the presentation from the link above. The 8 megatrends are clearly listed out in the deck each having a separate section of its own.
I would recommend to open the presentation in a separate screen(if feasible) while watching the video session in parallel and pause to reflect on the data points in each slide and their implications. One needs to really absorb and connect the dots here.
Great post from @sahil_vi on the must-have tenets for each investment candidate.
While this is good for someone in the capital building phase to be more aggressive, the approach (especially Points 4. and 5.) changes a bit towards capital preservation with a larger corpus.
In the case of large investments, when one is comfortable knowing the business and management over time, a few quarters of underperformance don’t matter as long as the broader compounding theme and long-term high ROCE are intact.
Nitin Bhai and Paresh Bhai have been doing a great service in helping connect the most promising SMEs to the broader investment community.
It was really generous of them to share all the live sessions for the broader investor community as well.
Although a lot of these stocks have a run up post the event in the last month, still there’s a long runaway in select names.
Event day market cap for the SME companies is captured here
In our capitalist society, where do virtue, moral responsibility, truth-seeking and public service
fit in? Charlie Munger answered these questions through his long exemplary life. He insisted on
making money in the most morally sound way, entering transactions only when, if positions
were reversed, he would comfortably take the other side. He sought worldly wisdom through
life-long learning. He guided life with ratonality devoid of mental deficiencies such as envy,
resentment and self-pity. He faced and persevered through countless adversities with stoicism and equanimity. As he gained in wealth and stature, he showed litle appetite for the trappings of that success, and instead spent his wealth on worthy causes and tirelessly spread his worldly wisdom to those who would listen, often with humor. He remained deeply engaged with family, friends, partners and the broader world with loving assiduousness through his last days.
In his later decades, Charlie Munger’s ideas began to spread across the world, particularly in the most populous countries of China and India.
Charlie’s teachings will continue to spread, inspire and impact the world even more profoundly. That will be his eternal.
Averaging down on a losing position is perhaps the most common yet the most dreadful sin investors keep committing as they surrender to their psychological selves over their rational selves.
A good read on the common pitfalls, invert and you arrive at when to actually average down
You should only average down when:
The business is accelerating.
The business is profitable with no financing risk.
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