Special Report

Seth Klarman is one such super investor and his book Margin of Safety is that super text which needs to be read every year (at least). And every time I read it, I discover a fresh insight and wonder how I missed it during my last read. It happens because once I get a grip on one idea, it increases (slightly) my mind’s ability to receive another idea. And bit by bit, over a period, brain muscles become stronger to imbibe the deeper wisdom.

I would go as far as saying this – if an investor hasn’t read a super text multiple times, he’s as uninformed as the guy who hasn’t read it at all. Warren Buffett’s letters, Benjamin Graham’s The Intelligent Investor, Poor Charlie’s Almanack are some super texts that demand revision multiple times.

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I knew his work ethics and diligence in studies so his academic performance wasn’t a surprise. Getting up at 4 am for studying and attending all the classes regularly came naturally to him. Maybe he made it look that way. But there was one thing very unusual about him. On the day of the exam, he always used to wear his favourite pink shirt. People admired him for his intelligence, hard work, and focus but his superstition about pink shirt just didn’t make sense. It even earned him a nickname – Pinky.

Not to mention, there were few other, less irritating, peculiarities about him. For example, both his table-clock and his watch were set 15-minutes ahead of the actual time. He couldn’t tolerate seeing a footwear upside down. And he never missed his 30-minute afternoon nap, come what may.

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However, the above accolades pale in front of his real accomplishment. His investment firm has averaged a whopping 40% annual return from 1985 to 2016. Just to give you an idea, Rs 100 compounded at the rate of 40% for 20 years turns into Rs 83,600. In the investment world, where 100-baggers are extremely rare events, Greenblatt has turned his investor’s corpus to 800-bagger.

Returns like that don’t come with plain luck. At least not for such a long time. I am sure you are excited to know about the tricks that Joel Greenblatt has up his sleeve that has enabled him to create such an enviable long-term record. You can learn all about his secrets and investing methods in his books but what’s more important to first learn are the basics that underlie his investment process.

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Earlier I used to respond to these trolls with clarifications and counter-arguments. As I realized, that was useless and disturbing, especially for all others who were also hearing the noise coming out of my home (where these trolls had barged into).

Then I stopped replying to such criticism and kept quiet till people got personal – like someone recently calling me “grossly overrated value homeopathic quack.” 😉 And then I started blocking people sending such stinkers. In fact, I used the blocking tool generously.

Now, I realize even that tool does not serve much purpose. This is because even when I block people sending me negative criticism (and that too personal), I am still giving them and their thoughts some importance.

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