I liked this. Interesting data and a very good section on valuation. Lot of takeaways from subsequent panel discussion as well. Worth watching fully.
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A Dozen Things Iâve Learned from Charlie Munger (Distilled to less than 500 Words) by @TrenGriffin
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STAY IN YOUR CIRCE OF COMPETENCE: Know the edge of your own competency. It is not a competency if you donât know the edge of it.
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MAINTAIN A MARGIN OF SAFETY: Buy assets at a bargain so your investing results can be financially attractive even if you make a mistake. Price is not always the same as value. Avoid big mistakes. Reputation and integrity are your most valuable assets. Reputation earned over a lifetime can be lost in seconds.
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THINK INDEPENDENTLY AND WITH OPPORTUNITY COST IN MIND: Markets and crowds are not always wise. Allocate your time and other resources to your most attractive opportunities. The highest and best use of a resource is always measured by the next best use.
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BE INTELLECTUALLY HUMBLE: Recognize that the world is genuinely complex and that what you know is a fraction of what you still donât know. Wait for what you expect rather try to forecast timing. Think about second order and above impacts of anything.
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BE SMART BY NOT BEING STUPID: Tune out stupidity. The greatest and most important risk is permanent loss of capital, not just volatility in price. Only accept risk when you are properly compensated for assuming that risk. Activity for its own sake is not intelligent.
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BE PATIENT, BUT AGGRESSIVE WHEN IT IS TIME: Great opportunities do not appear that often, but when they do appear they wonât last long so you must be aggressive when the time is right. When the odds of success are very substantially in your favor, bet big.
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BE PREPARED: Great investments are hard to find but by consistently working hard you might find a few of them. You only need to find a few great investments in a lifetime.
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KEEP IT SIMPLE: Apply organized common sense when solving a problem or when doing an analysis of an opportunity. Think more and calculate less. Avoid false precision and unnecessary transaction costs. Try not to interrupt interest that is compounding. Focus on being a business analyst, not a macroeconomic forecaster. Pay attention to the business cycle, but donât try to predict it.
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ACCEPT CHANGE: Avoid master plans since change is the only constant in life. Adapt. Look for evidence that would dis-confirm your own ideas. Understand arguments from all sides. Face your problems.
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THINK BROADLY: Use multiple models from many disciplines in doing an analysis. Borrow the great ideas of the best thinkers in every discipline. The antidote to man with a hammer syndrome is a full set of tools.
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AVOID HUBRIS: Try to avoid fooling yourself, which is hard since it is easy to do. Understand that more of success in life is luck than you imagine.
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KEEP LEARNING: Be a learning machine. Never stop reading. Be curious. Surround yourself with smart people. Set aside time to read and think.
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Great Articles shared by all. Came across some articles giving updates on Private Funding and Amendments by SEBI in Takeover code in recent times and small update on macro view (less numbers) on the Real estate.
Absolutely stunning collection of FACTS that New York Times reported throughout 2018. A page to be bookmarked and read to learn, laugh aloud at and get amazed by.
A behind-the-scenes look at how Amazon rules work in protecting the consumer and how the system is gamed.
A very good piece on hyperinflation and how it has reared its head every few years across the globe and created social, economic and political havoc.
A peak into the new-age world of e-sports, video games as spectator sports.
More than 10 million people tuned in on streaming platforms like Twitch and legacy networks like ESPN, with a higher share of 18-to-34-year-olds than the Super Bowl or the NBA Finals.
Itâs unclear what the popularity of e-sports among younger generations will mean for traditional pro sports. A 2017 study from Street & Smithâs Sports Business Journal found that the average age of a Major League Baseball TV viewer was 57, while the average ages for NFL, NHL, and NBA viewers were 50, 49, and 42, respectively. Meanwhile, nearly 63 percent of those playing Fortniteâthe inescapable mobile game thatâs made $1 billion since being released last autumnâfall within the coveted 18-to-24-year-old demographic.
Passion for the industry runs deeper in Asia, where gaming culture is more ingrained and American sports have less of a footing. South Korea recognized e-sports as a second-level Olympic sport in 2015, and this past August, e-sports made its debut at a major global athletic event with an exhibition during the Asian Games in Indonesia.
http://whartonmagazine.com/issues/fall-2018/the-billion-dollar-business-of-e-sports/
Companies are starting to bypass the Apple and Google appstore in how users discover, download and pay for their apps. Netflix has started this with iTunes and Spotify was quick to follow suit. It could be potentially disastrous for a company like Apple, whose so-called platform business can disappear very fast, leaving it as a hardware manufacturer of phones which people donât care for any longer.
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A great long read on the effect of operant conditioning on market participants.
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Written by our own : @basumallick
Learnings from year when even Warren Buffett took big blows
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Failure of value investing?
The company was trading for 1000 crores and had recieved a cash of 1550 crores. Simple value buying opportunity, right? But you should be most careful when the opportunity is too easily visible. There is always a catch. Like in this case, markets were predicting promoters intentions that even the best of investors could not forsee. Money is claimed to be siphoned off through write back of profit, loans to promoter entities. At present, a complaint is pending for forensic audit, so that siphoning of wealth can be proved
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Missed the point. What happened to 1500 cr cash
Worth a look.
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http://www.mydigitalfc.com/fc-supplements/invest/pv-penetration-rate-increasing
Some great insights on the current state of Indian auto ( 2 wheelers and PVs ) industry.
Disc: invested in Bajaj Auto, Maruti and Hero Motocorp
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Frightening analysis by Prof Bakshi on NHAI Debt (and how this does not appear as Govt debt!)
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Well, I respect the prof. but I donât think this is so scary for the following reasons:
- Most of these assets will remain with NHAI for perpetuity so they can raise finances whenever they get to own it themselves.
- The country needs this infra so somebody has to pick the tab and none better than govt since it has cheaper way of financing the same. Pvt. guys are simply unable to finance the same.
- Lot of HAM projects will start generating funds for NHAI very quickly compared with BOT projects and they would pay the road contractors in 15 installments.
â This analysis will not be complete without forecasting revenue from these projects.
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I donât disagree with your second point and yes at the end of the day the money raised is being put to productive use which the country needs desperately. Your second point actually also highlights a separate concern given how the ILFS saga is unfolding and the fact that the alternative PPP model is failing and the banks and NBFCs will be reluctant to lend to the sector. On the 3rd point, analysis I suspect becomes difficult since the disclosures are poor which is one of the concerns.
The frightening part for me is the fact that the Rs 148,276 cr (as on September, 2018) is not consolidated as Govt Debt despite investors and rating agencies treating this as having government guarantee. This number is large enough to move the needle on the fiscal deficit number we are currently struggling with.
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Insightful Conversation.
Key Highlights:
- The most important thing is: Risk
- The most important thing is: Understanding Market Cycles.
- It is not the return you make, it is the risk you take to make the return; ie: risk adjusted return.
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How did you figure out that it is not consolidated as government debt? How is something like Air India different?
Budget Thought?
If I have to play one sector for this budget, it will be country liquor. 6k is not big enough to help deleverage but takes care of small ticket consumption like daily quota of liquour.
Found this a Good Read. It is about the ideas of experience and knowledge, two words that are related, but often misused. The article quotes an example of a company which gave satisfactory dividend, acceptable Return on Equity, impressive profit margins, low debt but still gone out of the business due to changing behavior of targeted audience.
In Authorâs word , Investing is not just products and numbers, you are a part owner of a business, and businesses only exist in marketplaces, and marketplaces are always changing. Plus competitors come at you from places you do not expect.
Humility really matters in investing, investing is about the future, and the future is unpredictable. Staying humble means understanding that no matter how hard you crunch the numbers, this isnât calculus class, and the answer you derive is never perfect. One day, it is kids playing with dolls, and the next day some California guy in a black turtleneck puts a piece of metal in everyoneâs hands, and a 60 year old toymaker goes poof.
P.S: The article is by a 16 Year old Girl.
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Latest memo from Howard Marks: Political Reality Meets Economic Reality
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There is a saying âold water goes way with the arrival of new waterâ, automobiles swallowed carts, ballpoint pens made fountain pens disappear etc. These disruptions were always there, except that the speed at which the change is happening is bothering. And from the perspective of consumers, these changes are good, you get more for your money, more utility, more longevity, more satisfaction. From an investorâs perspective, it is hard to imagine and counter the ever-changing world filled with innumerable technologies.
Like Jeff Bezos said, the question should be what will not change in 10 years. But then again, if everyone takes shelter in such companies, their valuations will be always high. Also, I donât think many investors are afraid of these changes, rather they embrace them, as they have their edge, they can take risk as they can afford losses and when they are rewarded, it is worth their effort.
Just my thoughts.
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