Thread by @abhishec_s

Excerpts from "The Joys of Compounding" - @Gautam__Baid

I am firmly in the camp of the philosophy Mr. Baid expounds. A good read. Lucid. Eloquent.

I differ on how that philosophy has translated into some of the portfolio ideas mentioned.

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When evaluating new ideas and keep a very high hurdle rate for incoming investments. Be unreasonable.

Ability to Take Risk = Assets − Liabilities + Time

It is better to be an average guy on a star team than a star on an average team. The former will be better for you in the long term; the latter is just an ego trip.

Here is my exhaustive list of black swan risks for the coming year:

1.
2.
3.

Progress happens too slowly to notice; setbacks happen too quickly to ignore.

—Morgan Housel

True expert knowledge in life and investing does not exist, only varying degrees of ignorance. This is not a problem to solve; it is simply how the world works.

Don’t make this life all about you. Be happy when other people are doing well and encourage their success.

Frank Wells was president of the Walt Disney Company from 1984 until his death in 1994. After Wells died, his son found a little piece of paper in his wallet that read “Humility is the essence of life.” Frank Wells had carried that note with him for thirty years.

A tree that wants to touch the sky must extend its roots into the earth.

Doubt is not a pleasant condition, but certainty is absurd.
- Voltaire

Becoming rich often becomes the biggest obstacle to staying rich.

There are a million ways to get rich. But there’s only one-way to stay rich: Humility, often to the point of paranoia. The irony is that few things squash humility like getting rich in the first place.

In life, relationships, business, or investing, nothing will work unless you do.

"You can’t live a perfect day without doing something for someone who will never be able to repay you. The most meaningful way to succeed is to help other people succeed."

Knowledge comes from experience, but it doesn’t have to be your experience.

“Curiosity is antifragile, like an addiction; magnified by attempts to satisfy it.”

What does not work (i.e., negative knowledge) is more robust than positive knowledge.

- NNT

It’s not the answers that make you good in the investing business; it’s the questions you ask.

"Using precise numbers is, in fact, foolish; working with a range of possibilities is the better approach".

There is nothing more dangerous than an idea if it’s the only one you have.

Be wary of industries that are characterized by high levels of investment banking activities.

You just need to keep playing your own game, regardless of the game others are playing.

Peter Lynch's “bladder theory” of corporate finance: “The more cash that builds up in the treasury, the greater the pressure to piss it away.”

Intensify your research activity during times of correction, as most of your demotivated competition will want to just “wait it out".

Very few people have gotten rich on their seventh best idea.

- WB

Few earn alpha in bear markets, whereas all earn beta in bull markets.

Cash is a much-underappreciated asset. It’s one of the only price-stable assets that is simultaneously highly value-elastic: cash increases in value as other asset prices drop. The more they drop, the more valuable cash becomes.

It’s a funny thing about life; if you refuse to accept anything but the best, you very often get it.

—W. Somerset Maugham

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