Wit and Wisdom on Investing, Business, and Life
As an eventful 2018 winds to a close, it’s a good time to reflect on the investment principles/lessons that turbulent markets this year have once again reminded us of. Towards this, we picked the brains of a few experienced investors on these two questions –
Let’s read out their replies below.
This is the Part-3 of the Peter’s Principles series. You can read Part-1 here and Part-2 here.
In this series, we are discussing Peter’s Principles as described in his book Beating the Street.
To say that Peter Lynch beat the market would be a severe act of discounting his performance. Lynch managed Fidelity’s Magellan Fund from 1977 to 1990 and clocked a CAGR of 29.2%. Every US$ 1 invested in his fund in 1977 grew to more than US$ 27 by 1990. Lynch retired in 1990 at the age of 46.
[Read more…] about Special Report: Peter’s Principles – Part 3
In 2014, JPMorgan Asset Management did a study and discovered that the 40 best days accounted for more than the entire S&P 500 return from 1993–2013. In other words, if someone traded only on these specific 40 days, i.e., invested his money in S&P 500 in the morning and sold in the evening then he would have the same returns as someone who stayed invested for 20 years.
[Read more…] about The Risk of Being Out of the Game
Before we begin, let me dazzle you with my secret superpower — the ability to assess people’s personality without meeting them. In other words, even though I don’t know you personally, I can make a reasonably accurate prediction about your personality. I just need one thing from you. Think of a number between 5 and 10 and keep it at the back of your mind while I recite the results of your instant personality assessment test.
Here we go —
[Read more…] about Behaviouronomics: Barnum Effect
The greatest injustice you could do to yourself is to read a good book only once. If a book is good, its author had undoubtedly spent a lot of time thinking deeply about the ideas expressed in his book. The insights that emerge from deep thinking are usually not easy to grasp in the first pass.
In fact, most readers who aren’t very familiar with the topic, absorb less than 50 percent of the book the first time. And it’s not because of any shortcoming or lack of intellectual power on the reader’s side. Learning from a good book is very similar to loading a high definition image. Initially, the whole image appears on your screen but it looks blurred. The pixels are large and only give you a vague idea. Give it some time and more pixels load and the image becomes sharper and clearer.
Some books are so dense and rich in knowledge that every time you read them, it feels you’re reading an entirely different book. And that happens because the previous reads prepare your brain to receive the insights from subsequent reads.
[Read more…] about Bookworm: Revisiting Zero to One by Peter Thiel