Reading
across disciplines is one of the best ways to improve our investment acumen.
Here is a summary of some of the best articles I read this week.
The last decade in pictures
A peek into the
happenings of the last decade through the lens. Some stunning pictures remind
us of the good, bad and ugly events that shaped the world.
Zanshin - Focus on the process more than the results
We live in a world
obsessed with results. Like Herrigel, we have a tendency to put so much
emphasis on whether or not the arrow hits the target. If, however, we put that
intensity and focus and sincerity into the process—where we place our feet, how
we hold the bow, how we breathe during the release of the arrow—then hitting
the bullseye is simply a side effect.
The point is not to
worry about hitting the target. The point is to fall in love with the boredom
of doing the work and embrace each piece of the process. The point is to take
that moment of zanshin, that moment of complete awareness and focus, and carry
it with you everywhere in life.
It is not the target
that matters. It is not the finish line that matters. It is the way we approach
the goal that matters. Everything is aiming. Zanshin.
The wisdom of Nemish Shah
Investing, according
to him, is simple and complicated at the same time, in a sense a lot like art.
He says while investing in India follows the same rules as elsewhere, there is
one crucial difference—here, the quality of the management has to be considered
closely. “Abroad one can go by what is there in the books, but here you have to
add one additional layer—the management,” says Shah. But as long as the
management is focussed and understands allocation of capital, he is comfortable
with the business. What he isn’t comfortable with are companies that are hasty
and raise capital regularly. In fact, Shah has ignored many companies where the
management did not give him the right vibe.
How to read news
Rather than reading
less, portfolio managers must learn to rapidly detect what is nonsense and move
on. It’s a necessary skill when confronted with the hype and sensationalism now
masquerading as news. Pseudo news and pseudo analysis clutters the web, making
it harder to stay well informed.
Turn off your
political bias when you read and interpret the news, and be wary of
commentators who have political agendas.
Before you read the
news, you must have your own framework in place for decision-making. Otherwise,
you’ll be unduly influenced by what you read. As Ed Stavetski, founder of PCM
Partners LLC, put it, “You must have an independent view of the markets or the
media will force a view upon you.”
How to Read: Lots of Inputs and a Strong Filter
Most books don’t
need to be read to the end, but some books can change your life – means you
need two things to get a lot out of reading: Lots of inputs and a strong
filter.
If you only pick up
books you know with certainty you’re going to like you’ll confine yourself to
reading the same authors on the same topics. It gives fresh oxygen to
confirmation bias and limits your ability to connect the dots between different
fields and different cultures. It’s better to have a low bar in what books
you’re willing to try, and even the faintest tickle of interest should be
enough to make the cut. Kindle samples are free so excuses are minimal.
Once you’ve flooded
your desk with inputs comes the filter. It should be ruthless, taking no
prisoners and offering no mercy.
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