Symmetry in Thinking

When I first started going to the stock brokers office, my idea of investing was closer to value investing. But at the brokers office, all I encountered were people who were trading. In due course of time, that is where I ended up as well.

Trading regardless of whether you are profitable or not can be very addictive. The ability to see gains coming in based on a simple positioning one has taken is seductive. More so when one’s capital is small and limited. Yes, it’s nice to think that with compounding, even a small sum of money can end up being a significant sum in the long term, but one wants it today not tomorrow. 

Data suggests that most trading is a negative sum game. Add taxes and it becomes a deeply negative sum game. Ed Thorp won money on a consistent basis in the Casino, but the Casino owner knows that at the end of the day, the house always wins.

Most of us wish to be rich and yet very few actually achieve it. When you study the ones who have achieved success, there are virtually none who have achieved from speculating. But speculating is as old as the hills and it keeps beckoning.

Children learn the most from their parents because their parents are with whom they spend the majority of time. In stock markets, I feel that the best ideas come when surrounded by people who are not only as knowledgeable as you but also as curious about the world as you.

I have been around folks in the investment business from around 1996 onwards. But when I look back, the period when I learn the most comes down to just 4.5 years. This mostly due to 2 friends who have helped and influenced me a lot.  Surprisingly both are not full time market professionals.

When one looks back on the career of Warren Buffett, the few things that really stand out are the company he kept. Before starting his partnerships, he worked under Benjamin Graham. Then at more or less the right time, he came in touch with Charlie Munger. Oh, he is also friends with Bill Gates.

Luck and Serendipity I think plays a large role in one’s career. Also, being open to change. This I think is different from thinking oneself as open minded. People claim to be open minded but only open to spilling out ideas for others and never accepting that any other way can exist. Tough to learn from those.

On Finance Twitter, Influencers with their mindless ideas make the most noise. That noise in many ways overwhelms the excellent views expressed by others who may not be as articulate but know their stuff. Whom you spend time with matters a lot in the long term. Choose Wisely 🙂