Curiosity@Intelsense

Multidisciplinary learning is one of the best ways to improve our investment acumen. Here is a summary of some of the best learnings of the week. This week onwards, I am changing the format of the newsletter. Instead of sharing 5 articles each week, now I will share 3 articles, 1 audio/video and 1 quotation of the week that I am thinking about. Do let me know our feedback on the changed content.

Intelsense Updates

I shared my thoughts with The Economic Times on the markets and the possible sectors that are likely to throw up winners in the medium-to-long term. https://economictimes.indiatimes.com/markets/expert-view/etmarkets-smart-talk-auto-ancillaries-could-do-better-than-auto-stocks-abhishek-basumallick/articleshow/93986633.cms

1. It’s supposed to be hard

Every investor knows, or should know, the truth about money management: More than 80% of professional investors underperform their benchmark (more depending on how you calculate it). Those stats are used in an often cynical way to show how the industry is broken, crowded, and ineffective.   But wouldn’t it be weirder if it were different?   Wouldn’t it be strange if every slightly ambitious investor could pick a few stocks and earn returns capable of generating dynastic wealth with other people’s money? Or even most of them? How and why could that world possibly exist? The reason Warren Buffett is interesting is because there’s only one of him.   About 1% of college basketball players make it to the NBA. That funnel doesn’t seem odd – no one would say college basketball is broken, or a scam, or ineffective at developing great players. It’s obvious that getting to the NBA is really hard, and you can be talented and still not make it. The entire reason pro sports are exciting is because the players do someone almost no one else can do. Michael Jordan is interesting because there’s only one of him. https://collabfund.com/blog/its-supposed-to-be-hard/

2. Truth-seeking is important for self-improvement

Most highly successful people have been really right about the future at least once at a time when people thought they were wrong. If not, they would have faced much more competition.   Self-belief must be balanced with self-awareness. I used to hate criticism of any sort and actively avoided it. Now I try to always listen to it with the assumption that it’s true, and then decide if I want to act on it or not. Truth-seeking is hard and often painful, but it is what separates self-belief from self-delusion.   This balance also helps you avoid coming across as entitled and out of touch. https://blog.samaltman.com/how-to-be-successful

3. A little inefficiency is wonderful

Psychologist Amos Tversky once said “the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.”   A successful person purposely leaving gaps of free time on their schedule to do nothing in particular can feel inefficient. And it is, so not many people do it.   But Tversky’s point is that if your job is to be creative and think through a tough problem, then time spent wandering around a park or aimlessly lounging on a couch might be your most valuable hours. A little inefficiency is wonderful.   Nassim Taleb says, “My only measure of success is how much time you have to kill.” More than a measure of success, I think it’s a key ingredient. The most efficient calendar in the world – one where every minute is packed with productivity – comes at the expense of curious wandering and uninterrupted thinking, which eventually become the biggest contributors of success. https://collabfund.com/blog/inefficient/

Audio/ Video of the Week

The metaverse explained in 14 minutes.

The metaverse explained in 14 minutes | Matthew Ball

Thought of the Week

Huge sums have been lost by investors who have held on to securities after the reason for owning them is no longer valid. In investing it is never wrong to change your mind. It is only wrong to change your mind and do nothing about it. ~Seth Klarman