Richer Wiser Happier --W Green

 REVIEW of RICHER, WISER, HAPPIER—W Green

Interestingly, I thought this book was a self-help book, and I suppose in the broadest sense of the word it is. The author I had come across on various podcasts and thought he talked about himself too much. I read that Munger liked this book, and knowing how discerning CM is I thought I would give it a whirl. The book is beautifully written and speaks to the author's writing skills (I wish I could write that well). The book is based on a series of interviews and commentary about famous investors. The difference from other books that do similar things is that the commentary peels back the human side, strengths, and weaknesses of the subjects. There can be some constructive criticism as well as old-style criticism, lol. That makes it quite interesting, especially to me, who comes from this industry.

The Man who cloned Warren Buffet-M Pabrai

Humans have something weird about them that prohibits them from adopting good ideas easily.

Investing is about waiting for those rare moments when the odds of making money vastly outweigh the odds of losing it. Then be decisive.  Insto investors feel they need to show activity. Extreme patience is required.

Really successful people say no to almost everything.

13F filings of Buffet, Einhorn, Weschler, Klarman are studied.

Business must be simple and understandable. No IPO’s or start ups. If too hard pass.

Judge yourself by an inner scorecard. Don’t worry about what the world thinks of you.

What investors really care about is having independence.

 Hang out with people who are better than you.

Treat life as a game, not a survival contest or a battle to the death.

Be aligned with who you are. Live by an inner scorecard.

Too often we encounter a powerful principle or habit then discard and forget about it, consume and live by it.

The willingness to be lonely-J Templeton

Being unemotional and numerate is a great combination for investing.

For a contrarian investor, it would be catastrophic if you were constantly burdened by the awareness of what everybody else was thinking about your decision.

Everything changes – H Marks

Judge the amount of optimism that is in the price.

Market euphoria, the extreme brevity of the financial memory. History counts for so little in finance.

The importance of admitting that we can’t predict or control the future.

The inevitability of cycles. The possibility of using cyclicality to our advantage.

Need for humility, scepticism and prudence.

Both in markets and in life, the goal is not to embrace risk or eschew it, but to bear it intelligently while never forgetting the possibility of an unpleasant outcome.

Build unfragile portfolios and lives, that are unlikely to collapse even in dire conditions.

The level of risk you take on must be in accordance with your emotional resilience.

Freedom comes from clearly knowing that everything is ephemeral and training ourselves to stop grasping at what is inherently unstable.

What you accomplish is not the only important thing, it's also important how you do it.

You have to break the chain of getting and wanting, an aimless cycle of craving that leads inevitably to suffering.

The resilient Investor –JM Eveillard

Worked alone for years, he enjoyed from critical advantage: he had the institutional latitude to go his own way.

Because  the world is uncertain, you want to minimise your risk

Buffet – What is needed for long-term investment success is a sound intellectual framework for making decisions for making decisions and the ability to keep emotions from corroding that framework.

To lag in performance is to suffer psychologically. Investing is hard, it is infinitely harder if you are also barraged by external pressures from shareholders jumping ship, colleagues with their own commercial agenda, and bosses who lose faith in you at precisely the wrong moment. –lol

Individual investors have the advantage of not being answerable to the above.

Preserving capital and making reasonable returns over the LT will surpass any gamblers.

Explaining investment success is more fun than telling tales of bold bets that paid off rather than droning on about accidents that never happened.

Build a portfolio that can endure various states of the world. Beware of “return envy” and FOMO as clouding your judgment.

Patience and humility are required as well as risk mitigation.

Fives rules. 1. Respect uncertainty, 2. Achieve resilience by less debt and low expenses, 3. Withstand shocks, 4. Beware of complacency and overconfidence. 5. Do not allow awareness of risk to make us fearful, pessimistic or paranoid.

Simplicity is the Ultimate Sophistication—J Greenblatt

Figure out what something is worth and pay a lot less. Once you realise that is your entire mission its incredibly liberating.

JG uses 4 standard valuation methods, 1 DCF, 2. Relative value versus peers, 3. Acquisition value, ie what an informed buyer is willing to pay, 4. Liquidation value. Im a firm believer that in 90% of the cases the market will recognise that value within 2-3 years.

Weigh the odds on each investment upside v downside. JG makes money from asymmetrical bets.

JG has concentrated in corporate restructures, spin-offs, bankruptcy re-emerging companies.

I don’t buy the ones that I can make the most money on I buy the ones that I cant lose money on.

Buy good businesses at a bargain price—stick to this strategy. High ROE, low PE. You not only need a strategy you need to apply it consistently even when that is uncomfortable. No strategy works all the time.

The greatest enemy of a good plan is the dream of a perfect plan. Your strategy should be simple and logical so that you understand it, believe it to your core, and can stick with it even in the difficult times when it no longer seems to work.

Nick and Zacs Excellent Adventure—N Sleep, Q Zakaria

Zen and the art of motorcycle maintenance: an inquiry into values.

If management is thinking rationally and thinking about the long term, you can subcontract the capital allocation decisions to them. You don’t have to be buying and selling shares.

Pursue quality in life and in investing.

Focus on whatever has the longest shelf life and down play the ephemeral.

Shared-scale economies can generate sustainable wealth over long periods.

Mistakes in life and in the market come from instant gratification, checking impulses is a superpower.

They have focussed on clients with a long-term perspective. Shunned sell-side analysts and consultants.

Systematically resist the external and internal forces that push us to act impetuously.

High Performance Habits—T Gaynor

Extreme changes are not sustainable, moderate incremental changes are.

Look for good returns on capital with little leverage, and management that is talented and has integrity. Opportunity to reinvest at handsome returns. Available at a reasonable price. Outstanding businesses with leaders who are creative, adaptable, visionary and have enormous courage.

Make your mistakes non-fatal. You don’t need extremes to achieve exceptional results. Take the middle ground in everything.

The Middle Way -Finding happiness in a world of extremes—L Marinoff

You cannot control the outcome, you can only control the effort and the dedication of putting 100% in, whatever happens, happens.

Ed note do you more like evolve your investing style over time rather than change it

Good investors focus on what they are best at and what is most important to them.

It is worth writing down a list of beneficial habits that should be part of our daily routine. But its equally valuable to compile a Do Not Do list, reminding us of all the ingenious ways in which we habitually distract or undermine ourselves.

 

Don’t be a Fool- C Munger.

Sometimes its easier to invert the problem, ask what would guarantee a poor outcome and don’t do those things rather than ask what would likely give a good outcome.

Prescriptions for guaranteed misery in life, being unreliable, avoiding compromise, harbour resentments, seeking revenge, indulging in envy, ingest chemicals, becoming addicted to alcohol, neglecting to learn vicariously from the good and bad experiences of others, clinging defiantly to their existing beliefs, and stay down after struck by the first, second or third severe reverse in the battle of life.

Imagine a dreadful outcome and work backwards by asking yourself what misguided actions might lead you to that sorry fate, and then scrupulously avoid that elf-destructing behaviour.

Don’t pay too much, don’t go for businesses that are prone to obsolescence and destruction, don’t invest with crooks and idiots, don’t invest in things you don’t understand. Stay away from your ignorance. Refrain from being too public with your holdings because that makes it harder to change your mind and admit you are wrong.

You are left with a portfolio of undervalued, understandable, financially stable, profitable, and growing businesses run by honest people.

Acknowledge errors, learn lessons and move forward without wallowing in regret.

Know what you own, and avert obvious errors with the potential for catastrophic consequences.  Always think about your limitations.

Adopt for few standard practices and unbendable rules for reducing stupidity.

Our judgement is frequently torpedoed by emotions such as greed, fear, jealousy, and impatience; by prejudices that distort our perception of reality; by our susceptibility to serpentine sales pitches and peer pressure; and by our habit of acting on flawed or incomplete information. –articulating these issues is east internalising is not, but essential, because the most enduring advantages are psychological.

The reluctance to re-examine our views and change our minds is one of the greatest impediments to rational thinking. Instead of keeping an open mind, we tend to prioritise information consciously and unconsciously and reinforce what we believe. Seek out disconfirming evidence. The willingness to seek out the discovery of our errors is an inestimable advantage.

1.      Rewrite cognitive errors in your own words.

2.      Checklist of past investing errors highlighting the tendencies to which you are especially vulnerable.

3.      Strive to disprove your hypothesis, certain evidence can support multiple hypotheses. Devils advocate reviews, premortems, engage sceptics

4.      Adopt systematic analytical procedures.

The scientific literature shows that hunger, anger, loneliness, tiredness, pain and stress are common preconditions for poor decision-making. Brain health and function can be improved by sleep, meditation, exercise and nutrition. We also need to construct lifestyles that are conducive to calm resilience.

 

Beyond Rich -summation

One aspect of a successful and abundant life is the self-respect that comes from trying consistently to behave decently and avoid harming others.

The freedom to construct a life that aligns authentically with your passions and peculiarities may be the single greatest luxury that money can buy.

Resilience is a prerequisite for success in markets and life.-learn to cope with adversity

Disturbance only comes from within - from our perceptions, choose not to be harmed and you won't feel harmed. It can ruin your life only if it ruins your character.

Basically, you can't control what happens to you, you can only control your attitude towards it. Whether it is good, bad, indifferent, fair, or unfair, you can choose the attitude you take to it.

You can't control what other people are going to say about you or think about you. You can control your reactions.

It is within you that both your destruction and destruction deliverance lie.

No longer allow negative thoughts about yourself or others to linger in your mind and drain you energy.