Intelsense Capital Blog: 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. If you like this collection, consider forwarding it to someone who you think will appreciate it.

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Stoicism and Investing

Stoicism and Investing

In my experience, investing is 9% theory, 1% execution, and 90% managing your emotions. That’s why I’ve been applying the philosophy of Stoicism to my investing strategy—it helps me to manage the most important part: Emotions.

At some point, you must take action. But we tend to keep searching for that special piece of wisdom that makes the difference. So we keep reading more books, listening to more podcasts, and following the different investing sages.

As a result, we never take action, and we become our own worst enemy.

Until you take your own money and put it on the line, you never know what it feels like to invest. I can say that I’ve made nearly all the investing mistakes one can make.

But Stoicism has helped me to become a better investor because it made me more level-headed.

Every time you invest in something, you’re taking a risk with your hard-earned money, which will always remain scary. But no matter what happens, don’t talk yourself out of investing. You can’t afford it.

In the long term, markets still move in one direction: Up. You either take the ride up, or you stay where you are.

https://dariusforoux.com/stoic-path-to-wealth/

The history of memes

Richard Dawkins, the evolutionary biologist, coined the term “meme” in his 1976 book The Selfish Gene, likening discrete bits of human culture that propagate between people to genes. Dawkins shortened the ancient Greek word “mimeme” – with an apology to his classicist colleagues – to meme, to rhyme with “cream”. He suggested that memes were melodies, ideas, catchphrases or bits of information that leap from brain to brain through imitation, expediting their transmission.

He coined the term to highlight just how human culture can replicate itself. And in that sense memes have been around probably since humans have had cultures they have shared. But we can also see the kernels of what makes modern internet memes so successful in ancient forms of popular culture.

https://www.bbc.com/future/article/20220928-the-surprising-power-of-internet-memes

Incentives are the most powerful force in the world

No matter how much information and context you have, nothing is more persuasive than what you desperately want or need to be true. And as Daniel Kahneman once wrote, “It is easier to recognize other people’s mistakes than our own.” What makes incentives powerful is not just how they influence other people’s decisions, but how blind we can be to how they impact our own.

A big thing here is recognizing that people are not calculators; they are storytellers. There’s too much information and too many blind spots for people to calculate exactly how the world works. Stories are the only realistic solution, simplifying complex problems into a few simple sentences. And the best story always wins – not the best idea or the right idea, but just whatever sounds the best and gets people nodding their head the most. Ben Franklin once wrote, “If you are to persuade, appeal to interest and not to reason.” Incentives fuel stories that justify people’s actions and beliefs, offering comfort even when they’re doing things they know are wrong and believe things they know aren’t true.

https://collabfund.com/blog/incentives/

Quote of the Week:

“In our view, there is no such thing as a value company. Price is the essential determinant in every investment equation. At some price, every company is a buy; at some price, every company is a hold; and at a still higher price, every company is a sell. We do not really recognize the concept of a value company.”

~Seth Klarman

Audio/Video of the Week: Practitioner’s Insights: Forensic Accounting