A small thread on "common sense investing" with the recent case study 📝 ( Writing a thread after a long time 😊)
"People calculate too much but think too little" ~ Charlie Munger.
What is common sense investing? How can we benefit from it? (1/n)
"People calculate too much but think too little" ~ Charlie Munger.
What is common sense investing? How can we benefit from it? (1/n)
It is simply observing the world with a curious mind & without any prejudices and think about the impacts: Best, most likely and worst.
Don't forget the "Inversion" mental model.
We exposed to various news every day which would impact the market
(2/n)
Don't forget the "Inversion" mental model.
We exposed to various news every day which would impact the market
(2/n)
But our thinking is limited to its impact on the market for day/ week or few weeks, but rarely think about the impact of the news beyond that ( yes, some people are the exceptions)
Mostly we ignore it because of too much noise, or we do not think in that aspect (3/n)
Mostly we ignore it because of too much noise, or we do not think in that aspect (3/n)
Charlie Munger always advocates "multidisciplinary thinking" by applying different mental models which would help us in making better decisions.
"Multidisciplinary thinking" gives a different perspective and minimises our errors (4/n)
"Multidisciplinary thinking" gives a different perspective and minimises our errors (4/n)
As I tweeted yesterday, in the current age, information is not the edge, how we interpret it from various angles by applying our common sense matters a lot and cutting the noise is most important these days (5/n)
Almost all market participants were read this news a year ago, right?
But reading is different & thinking its impact is different, better thinking leads to a better decision.
Well, for many it was fun or sarcasm or someone might have ignored it (6/n)
But reading is different & thinking its impact is different, better thinking leads to a better decision.
Well, for many it was fun or sarcasm or someone might have ignored it (6/n)
But as an investor, we should think from the investing perspective.
How this would impact on few stocks/ sectors.
What will be the "probable" outcome, what is the best & worst-case scenario?
We need not required to be a genius to study all these things (7/n)
How this would impact on few stocks/ sectors.
What will be the "probable" outcome, what is the best & worst-case scenario?
We need not required to be a genius to study all these things (7/n)
All we need a little common sense, okay after reading the below news a year ago it was easy to guess this would positively impact brokerage and related industry for the next 1-2 years and it'll boost their earnings and cash flows (8/n)
Whether the market will recover with high speed or not but these businesses will do better, and the probability of losing is very less in these businesses irrespective of market conditions, right? ( at that point of time)
(9/n)
(9/n)
But the price of ICICI securities 🔼 from 230+ to 500+ within 2-3 months, so one should look into other players in the same sector or related sector where the market ignored at that point of time ( 10/n)
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