15 Resources For Intelligent Investing

I remember the amount of time it took to discover resources on investing when I started investing. The problem was further amplified by the analysts’ noise on TV and stock market exuberance in the surrounding. Since I would be taking break from active investing for some time, I thought of putting down some resources for budding value investors. Feedback is always welcome. Here is a list of resources that might give a head-start to young investors –

Books

Books are investor’s best friends if one does not have enough people to talk around about investing.  Spending more time with books would also help you cut your time watching CNBC and stock market levels. There are many interesting books on investing and the more books you read, the more you would want to read. Here are few good books to get started –

1. The Intelligent Investor

The book is written by Benjamin Graham, the teacher of the investing God Warren Buffet. Although Buffet himself does not follow the quantitative framework provided in the book, it is a good book to start primarily to get into value investing school of thought – paying cents for a dollar and understanding Mr. Market.

2. Annual Letters to Shareholder from Mr. Warren Buffet – Berkshire Hathaway

Investing is best done when it is done like business. And nobody understands business better than Mr. Warren Buffet. Every year Mr. Buffet writes letters to Berkshire’s shareholders and each one of these imparts immense wisdom. Must read for anyone who wants to learn investing or learn business. There is also a book covering the lessons from these letters – The Essays of Warren Buffett: Lessons for Corporate America – a quicker read if you don’t want to download each letter and go through details of Berkshire’s businesses.

3. Buffet: The Making of an American Capitalist / The Snowball

Now since we are learning from the writings of the great man, we can also read more about his life from either of these two books – Buffett: The Making of an American Capitalist by Roger Lowenstein or The Snowball: Warren Buffett and the Business of Life by Alice Schroeder. I would recommend both. Continue reading “15 Resources For Intelligent Investing”

Letter to School Students – Making It Successful

Letter to School Students – Making It Successful.

The Story of Success
Outliers - The Story of Success

[The school, where I studied, turned 25 years last year and this article was published in the special magazine to commemorate the silver jubilee. Hope others find it useful too. This article is inspired from the book by Malcolm Gladwell]

Warren buffet is the richest man in the world with an estimated net worth of $62 billion. But that is not exactly what my point is and what I am going to write about. The fact that stands out is that he has donated more that 85% of his hard earned money of his entire life without any pains to Bill & Melinda Gates Foundation making it the largest charitable donation in history. He is a happy man living in a modest apartment with a very constrained lifestyle. He has what he needs. He has fulfilled his duties towards fellow human beings. In other words he is successful.

Similarly there are people like Vishwanath Anand, Ratan Tata and Sachin Tendulkar who have been successful in their respective domains. With a population of over 6 billion people in this world, I am sure, there are thousands, if not millions of people with similar abilities as these people. What is it that makes them more successful than rest of the people? I think the three main factors that make the difference are luck, grit and ability. We do not have much control over the first factor but let us be optimists and believe the wisdom words “fortune favors the brave”. I am going to discuss about the other two factors – grit and ability – and converge upon a very simple theme of connecting the these dots.

Ability is one’s personal trait that gives one an extra edge in achieving something. For example, a person with muscular physique will have a competitive advantage in boxing or weight lifting against a person with a lean frame like me. On the contrary, a person who is good with numbers will do better than an average in engineering. I believe that everyone in this world is born with at least on exceptionally good ability. The key is to find those set of abilities what you are good at. Next comes the grit.

One needs to nurture the ability to make it extra ordinary. Sachin Tendulkar had an ability to hit the ball at the right time with right force. He honed his skills with thousands of hours of practice and became what he is today. Buffet started investing when he was eight [some say he started when he was just five which is little hard to believe] and has been practicing for whole his life. Bill Gates, the founder of Microsoft, started doing his practice in programming when he was in eighth grade. Here’s what he says “It [programming] was my obsession. I skipped athletics. I went up there at night. We were programming on weekends. It would be a rare week that we wouldn’t get twenty or thirty hours in”. Twenty or Thirty hours a week in eighth standard! Abraham Lincoln practiced law for twenty-five years and handled an average of more than two-hundred cases a year. These people did not give up when problems came but faced it with courage and conviction. Steve Jobs, the founder of Apple, was sacked from the very same company he founded. He did not give up – he worked hard and returned again to helm of Apple. He was also diagnosed with cancer once but he again fought back and is now celebrated as an icon for introducing his design innovations [much famed iPods, iPhones, Macs etc] to this world.

In summary, I think these successful people identified their strengths and goals early and worked very hard to connect their strengths with their goals. Luck favored them. Let us all define the terms of success and start working towards it studying the footsteps of these wise people. However, we should also remember one important thing – we should define criteria for our success based on what we want to do and not what others expect us to do. So, although we should study the lives of these great people, we should create the path of our own. My best wishes to all the students for a successful future and everybody associated with Jude’s on completing glorious [and successful] 25 years!!

Three people to have lunch with

Three people I would choose to have lunch with

First would be Ratan Tata and there are multiple reason. Almost everyday, while driving from home to office and vice versa, I see a two kids hanging on to a bike. One of them sitting on the fuel tank and another one sand-witched between his/her parents. Add to that occasional rains in Bangalore. And this I see this while sitting in my car comfortably enjoying the AC. While I just thought about this, there is one man who is doing something about it. I wish that his vision of a successful Nano come true.

Secondly, If would like to talk about his daily schedule and how does he afford to do it. I don’t have a count of how many companies belong to Tata’s chairmanship. And if he gives just an hour of his day talking to each of his companies, it would take considerable amount of his time just for that. And as far as I think he involves himself in all the strategic decision making in these companies.

I would also like to discuss with him about life of JRD and Jamsetji and running the business ethically in this environment of corruption and companies like Reliance.

Second person would be Warren Buffet and this one is no brainer. I know it costs a lot to have a lot of money to have a lunch with Buffet and only likes of Pabrai can afford to do this. But since this is just a wish-list, I can take the liberty of including his name. Although I want to get rich like him but this lunch will not be for tips of stocks or fundaes about businesses. This would be about his guts. Guts for donating more that 80% of his billions of dollars to charity. How much does it take to give it away when accumulating it was the main task that you did for your entire life?

Narendra Modi would be the third person. And this one would be to learn something about influencing people and task execution. However, I have got other choices too for this spot like Obama, Guy Kawasaki and many others. May be I should think if there is a unique person like the first two guys.