From "The Big Short" to Big Insights
What you have been missing in your investments of finance and life
I never liked the idea of bargaining for a price. Whether it was with vegetable sellers or auto from Katpadi Railway Station. While I'm not sure if it was embarrassment or just wanting to avoid the process, this aversion to bargaining made me overlook something crucial: the concept of real value.
Whether you’re in college or just started your job, investing has become the new cool because your peers are doing it(wrong reason to emulate). But this post is about highlighting what often gets missed while you are investing, stock picking and contains some of the principles to ease your life. After all, investing shouldn’t be that hard right ;)
Recently I watched the movie “The Big Short” which was about the 2008 Economic Crisis. Excited like anyone and more out of curiosity I searched on topics from Michael Burry to how these crises affected India, the role of AIG, how banks like Goldman Sachs and JPMorgan could safeguard themselves and everything related.
I even read some of the letters written by Michael Burry highlighting his investment philosophy. You might think making a contrarian bet against all conventional wisdom of the housing bubble would require an incredibly complex investment philosophy. In reality, it was simple, rooted in common sense.
Identifying one such legend in my country through his interviews - Raamdeo Agrawal is a legend in the industry and is widely regarded as the Warren Buffet of the Indian stock market. He has been a significant inspiration during my investment journey, especially due to his vast knowledge and simple investment methods. Not long ago, I finished reading one of his works called Wealth Creation Thoughts.
This book is filled with many insightful quotes on investing, psychological behavior, and markets I thought to share the top 10 quotes that have impacted me a lot. I'm pretty sure I would come back here and have a glance at them frequently.
Price is what you pay, value is what you get
True value investing requires that you look stupid in the short run
When you sell in desperation, you always sell cheap
In the stock market, money is moved from active to patient investor
To the crowd, patience is madness; to the Value Investor, patience is wisdom
Value Investing is an investment framework that focuses on the process, not on the outcome
Buy a business, don’t rent stocks
Nobody has ever bet enough on the winning horse
An investor’s worst enemy is not the stock market, but his own emotions
Forecasts usually tell us more about forecasters than the future
Here are three more as a bonus :)
The secret of long-term investment success is benign neglect. Don’t try too hard
Risk comes from not knowing what you are doing
The best stock to buy maybe the one you already own
Reflecting on these quotes, I've come to a profound realization: their wisdom extends far beyond the realm of finance. Each principle - from understanding true value to managing emotions, thinking long-term, and acceptance - offers guidance not just for investing, but for navigating life's complex journey.
And this brings us to the end of this post, I hope you found some value in this.
See you soon,
Dhairya