Blog – Value Investing Almanack – Safal Niveshak

Bookworm: The Devil’s Financial Dictionary By Jason Zweig

February 12, 2019

Jason Zweig, a WSJ columnist, is famous for writing the commentary for the most popular edition of the investment classic — The Intelligent Investor by Benjamin Graham. Warren Buffett claims that when he read Graham’s book in 1949, it changed his life forever.

With his unique writing style, Zweig made Graham’s book doubly valuable by bringing in the perspectives from today’s market. In his commentary, Zweig drew parallels between Graham’s examples and today’s financial headlines, which gives readers a deeper understanding of Graham’s principles in the modern context. Zweig is a history buff and his genius is in bringing in historical perspectives on today’s seemingly important financial news.

In Sept 2016 issue of VIA, I had written about Jason Zweig’s other book Your Money Your Brain which was based on insights from the field of behavioural finance. The one I am going to talk about in this edition of Book Worm is Zweig’s latest piece of artful work — The Devil’s Financial Dictionary.
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Special Report: Let Me Convince You to Start Teaching

January 31, 2019

The 50-year-old partnership between Warren Buffett and Charlie Munger is well known to the world. During initial years of their friendship they would spend hours every day on the phone discussing investing and business.

So when Munger told Mohnish Pabrai that he always had someone to talk to about investments, Mohnish guessed, “You mean Warren Buffett?”

“Well, it wasn’t always Warren. But I’ve always had someone to talk to.” Charlie replied. In a recent DJCO meeting, Munger mentioned that even Einstein needed someone to talk to.

Let’s unpack Charlie’s insight.
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Investor Insights: Saurabh Mukherjea – Part 2

January 31, 2019

Saurabh Mukherjea is the founder of Marcellus Investment Managers. He is the former CEO of Ambit Capital, prior to which he co-founded Clear Capital, a London-based small-cap equity research firm.

Saurabh has written three bestselling books: Gurus of Chaos (2014), The Unusual Billionaires (2016) and Coffee Can Investing: The Low Risk Route to Stupendous Returns (2018). He is a CFA charter holder with a BSc in Economics (with First Class Honours) from the London School of Economics.

How to Go from Riches to Rags

January 24, 2019

Richard Branson is a British business magnate, investor, author, and philanthropist. He’s the founder of the Virgin Group, which controls more than 400 companies.

When someone asked Branson how to be a millionaire, he replied, “Start with a billion dollars and invest in an Airline.”

Vijay Mallya would probably be questioning Branson, “Aisa tha to pehle kyun nahi bataya?” (translation: why didn’t you tell me this earlier?)

So that’s the first way to go from riches to rags — buy an airline. Now, I don’t know of a way to verify if Branson actually said that. So let me tell you another story which is true, verifiable, and recent.
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Behaviouronomics: Hanlon’s Razor

January 12, 2019

In philosophy, a razor is a principle or rule of thumb that allows one to eliminate or shave off unlikely explanations for a phenomenon, or avoid unnecessary actions. Occam’s Razor is one such well-known heuristic. I had written about it a few years back. You can read it here.

When it comes to reasoning, elimination is a more robust strategy than adding. Sherlock Holmes famously said, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”

Shaving off the untrue guarantees to leave you with the most probable version of the truth. From that logic, investigating any phenomenon using razor like thumb rules is a very efficient way of better thinking. Better thinking leads to better judgment and decision making. Better judgment and decision making result in better action.