The One Percent Almanack

Wit and Wisdom on Investing, Business, and Life

Behaviouronomics: McGurk Effect

What happens when there is a conflict between what we see and what we hear? Apparently, instead of getting confused, our brain has a strange ability to construct a story which resolves the conflict. Unfortunately, that story is usually far from reality.

Who charges a hundred bucks for a ten-second magic trick?

In my case, it was a petrol pump attendant. He turned five 100-rupee bills into four bills in under ten seconds. Interestingly, I didn’t realize that he was showing me magic and was pocketing that missing 100-rupee note for his unsolicited magic services. In other words, he cheated me.

Demonetization was still a few years away and I didn’t like paying the fuel surcharge on my credit card, so cash was my favourite mode of payment in those days. When the vanishing money incidence happened 3-4 times in a row within a span of few months, and when I read an email forward about how some petrol pump attendants were scamming unsuspecting customers with their sleight of hand, I decided that I would keenly observe my next transaction at the petrol pump.
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Spotlight: Investing and the Power of Simple Ideas

The world today is obsessed with the idea that every problem can be and should be solved efficiently and accurately. Mother nature, on the other hand, believes in simple solutions. We explore, what an investor can learn from the most successful ditching in aviation history.

Chesley “Sully” Sullenberger had 208 seconds to land his plane from the time both the engines caught fire.

On January 15, 2009, US Airways Flight 1549 took off from LaGuardia Airport, New York with 155 people on board including five cabin crew members. Four minutes after the take-off, passengers heard very loud bangs and saw flames from the engines, followed by silence and an odor of jet fuel. Apparently, the plane was struck by a large flock of Canadian geese. A Canadian goose can be as large as ten kgs, big enough to cause serious damage to the airplane engine. On this occasion, the impact killed both the engines.

Realizing that both engines had shut down, Sully assumed manual control of the plane while his co-pilot, Skiles, worked the checklist for engine restart. Twenty seconds after the bird strike, a voice crackled on the radio at the New York Air Traffic Control (ATC).

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It’s Still Day One: Lessons from Jeff Bezos’ Letters to Shareholders

In our VIA Investor Insights section, recently we started asking interviewees about their favourite business person (apart from Buffett and Munger). The last two people who we interviewed (Saurabh Madaan and Jana Vembunarayanan) unanimously agreed on their choice. Here’s what they said –

Jana: “Jeff Bezos. He’s extremely focused, super-rational, and contrarian (right more often). Some examples of being a contrarian and right are free shipping for prime, kindle, and AWS. There were times he was wrong. For example, he didn’t like the idea of launching Amazon Studios. Even though Bezos disagreed, he committed to the plan. Writing about it openly requires a lot of humility, and Bezos scores full marks on that.”

Saurabh: “By far my favourite is Mr. Bezos. If you read his annual letters, they are also just like Mr. Buffett’s letters. They have a lot of lessons about life and thinking in life in general. When he says long term, he really means long term. It’s not even five or ten years. It’s really long term.”

In fact, Warren Buffett and Charlie Munger are also big fans of Jeff Bezos. They have acknowledged that they failed to see Bezos’ genius early on. Buffett called the

Amazon CEO as the most remarkable business person of our age. Munger, in his trademark style, said, “Jeff Bezos is a different species.”

So, I pulled out all the letters that Bezos has written for his shareholders (for 1997-2016), printed them and sat down with a marker.

In 1997, Amazon did $147 million in sales and Jeff Bezos opened his letter to shareholders with: “This is Day 1 for the Internet.” At the end of 2017, Amazon closed the books with a revenue figure of $ 177 billion and Bezos his annual letter with – “It remains Day 1.”

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Lessons From Jeff Bezos’ Letter to Shareholders

In our VIA Investor Insight section, recently we’ve started asking interviewees about their favourite business person (apart from Buffett and Munger). The last two people who we interviewed (Saurabh Madaan and Jana Vembunarayanan) unanimously agreed on their choice. Here’s what they said –

Jana:

Jeff Bezos. He’s extremely focused, super-rational, and contrarian (right more often). Some examples of being a contrarian and right are free shipping for prime, kindle, and AWS. There were times he was wrong. For example, he didn’t like the idea of launching Amazon Studios. Even though Bezos disagreed, he committed to the plan. Writing about it openly requires a lot of humility, and Bezos scores full marks on that.

Saurabh:

By far my favourite is Mr. Bezos. If you read his annual letters, they are also just like Mr. Buffett’s letters. They have a lot of lessons about life and thinking in life in general. When he says long term, he really means long term. It’s not even five or ten years. It’s really long term.
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InvestorInsights: Janardhanan Vembunarayanan

Janardhanan Vembunarayanan is a Senior Director of Engineering at LinkedIn. His work involves providing economic opportunity for every professional in the world. He is an ardent believer in the quote: Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. So, Jana is also a teacher and blogger, and blogs here.

In his interview with Anshul, he talks about his journey of self-learning and investing, and his experiences in compounding and multi-disciplinary thinking.

Anshul – Safal Niveshak (SN): Tell us about your background especially your education and career path.
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