Thread by @dpk2m

Hey everyone, today I'm excited to write a short review "Joys of Compounding" by Gautam Baid, Fund Manager at Stellar Wealth Partners India Fund. This book is all about the power of compounding and how it can help you achieve your financial goals.

The book is divided into 5 sections with various chapters filled with essential life & investing wisdom, quotes from various investors, engineers, entrepreneurs like Warren Buffet, Charlie Munger, Leonardo Da Vinci and Elon Musk.

In the intro, @Gautam__Baid says "The key to successful investing is not predicting the future, but learning from the past and understanding the present."

Chapter 2 - Becoming a Learning Machine

The way to achieve success in life is to learn constantly. And the best way to learn is to read, and do so effectively. @Gautam__Baid explains how a small initial investment can grow into a significant amount over time if we let it.

He further explains about how to read a book. There are various ways of reading like Elementary reading, Inspectional reading, Analytical reading and Synoptical reading. And Synoptical reading is the highest level of reading.

@Gautam__Baid explains about First Principles Thinking and Feynman Technique. "knowledge is overrated. Wisdom is underrated" This stuck me hard.

Chapter 3: Mental Models

Investing requires a certain mindset and approach. @Gautam__Baid shares different mental models to help us think clearly about our investments. "The best investors are those who can think independently, deeply, and clearly."

Chapter 4: Harnessing the Power of Passion and Focus through Deliberate Practice

Knowing our own strengths and limitations is crucial for successful investing. @Gautam__Baid emphasizes the importance of staying within our circle of competence when making investment decisions.

"The greatest edge an investor can have is a deep understanding of the companies they own." In this chapter, @Gautam__Baid explains about Ikigai, a Japanese concept meaning "a reason for being"

Chapter 5: Choosing the Right Role Models

"To be a winner, work with winners"

Chapter 6: Humility

@Gautam__Baid explains how the size of an investment position can greatly affect our returns. He shares different ways to determine the optimal position size for each investment. "Position sizing is the cornerstone of risk management."

Chapter 7: Virtues of Philanthropy and Good Karma

This one image sums it up.

Chapter 8: Simplicity is the Ultimate Sophistication

"If you eliminate the downside, then all that remains is the upside. After that, the key is to keep emotions in check and be patient. It really is that simple." - Warren Buffet's key takeaway from The Intelligent Investor

Three steps to simplification:
1/ avoid wasting time on things that are unknowable and unimportant
2/ focus
3/ reason backward

I will leave the rest of the book for you to read. My book is filled with bookmarks which I visit regularly.

My biggest takeaway from this book is that investing is a long-term game that requires patience, discipline, and a clear mindset. Self Improvement is the base. I recommend this book to anyone looking to improve their investment approach and learn from the best in the business.

To apply these learnings in real life, start by setting clear financial goals and investing in companies that you understand and believe in. Remember to stay patient, stay within your circle of competence, and always think long-term.

Thanks for reading my review! I'd highly appreciate a like, retweet of this thread. And follow me for more book reviews and insights on personal finance and investing.

#JoysOfCompounding #GautamBaid #Investing #PersonalFinance #CompoundingIsKey

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