Occasionally, I send out this special post with a few ideas I am reading and thinking about. Plus, a question I am meditating on.
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Book I’m Reading – A Few Lessons from Sherlock Holmes
This is a brilliant book from Peter Bevelin. Through this book, he has distilled Arthur Conan Doyle’s Sherlock Holmes into bite-sized principles and key quotes. In fact, this book is much more than a collection of quotes. It is a way to learn the powers of observation, understand the limits of our mind, and counter the narrative fallacy.
Sherlock Holmes is the epitome of rationality, and when it comes to making businesses decision, a rational thinking goes a long way in keeping you out of trouble.
Thinking is mostly an automatic process for everybody but while making critical decisions in life (and in business of investing) one needs to come out of the autopilot mode and learn the art of thinking clearly. Sherlock Holmes give us a framework, a blue print if you will, of thinking.
Bevelin writes in the book –
What distinguishes Holmes from most mortals is that he knows where to look and what questions to ask. He pays attention to the important things and he knows where to find them.
At the start of the book, Bevelin quotes mathematics and science writer Martin Gardner saying this about Sherlock Holmes –
Like the scientist trying to solve a mystery of nature, Holmes first gathered all the evidence he could that was relevant to his problem. At times, he performed experiments to obtain fresh data. He then surveyed the total evidence in the light of his vast knowledge of crime, and/or sciences relevant to crime, to arrive at the most probable hypothesis. Deductions were made from the hypothesis; then the theory was further tested against new evidence, revised if need be, until finally the truth emerged with a probability close to certainty.
There you have it! That’s the entire process of solving a mystery. I believe the work of an investor or an analyst working diligently through a company’s analysis isn’t any different than that of a detective in search of the ultimate truth in a crime.
A Few Lessons from Sherlock Holmes is a great guide for anyone wanting to learn how to analyze businesses to pick the right kind of stocks for long-term investment.
Illustration – How Are You Spending Your 86,400 Seconds
Imagine you have a wonderful friend who deposits Rs 86,400 into your account every morning. This happens daily, 365 days a year. The only condition is that you cannot save that particular deposit until the next day. You have to spend it that day itself. It is gone at the start of a new day, and your friend deposits a new Rs 86,400 into your account.
What would you do with this money that is handed to you every day? Would you think carefully about how you’d use it every day? Of course, Rs 86,400 is a lot of money for a day’s usage, and so a lot of people may end up spending it on wasteful stuff.
But now replace this much money with time . A day, if you survive it entirely, has 86,400 seconds for you to spend. Again, you cannot save the unused time to the next day, it’s gone at the end of every day, and a new time deposit is added to your account.
Now, does this thought stress you out? Can you see the seconds slipping away? Well, the seconds will slip away. Around 300 seconds of those 86,400 seconds have slipped away since you started reading this post.
Of course, you cannot hold on to these seconds. No one can. Even the richest in the world cannot buy a second extra. But you can use these seconds wisely. And by “wisely,” I am not talking about
something all the time. Maybe, you can change how you look at your life when you see it in seconds.
Haruki Murakami wrote, “Unfortunately, the clock is ticking, the hours are going by. The past increases, the future recedes. Possibilities decreasing, regrets mounting.”
Shane Parrish wrote, “Time is one of the most under-appreciated models that we all encounter, and yet it’s the most ubiquitous. When employed correctly, time becomes an amplifier. When spent without consideration, it becomes a persistent source of regret.”
Think about these 86,400 seconds every morning when you wake up. These will pass, so use them wisely. And please don’t let negative people and situations steal them from you.
Thought I’m Meditating On
I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain. ~ Frank Herbert, Dune
~ Haruki Murakami
Articles I’m Reading
- Lessons from History – Lecture by Mr. Durgesh Shah ( CFA Society India )
- When Dollar Cost Averaging Matters the Most ( Ben Carlson )
- The Shock Cycle ( Collaborative Fund )
- A Coronavirus Fix That Passes the Smell Test ( Bloomberg )
- How the Pandemic Will End ( Atlantic )
- They All Retired Before They Hit 40. Then This Happened ( New York Times )
- Seneca on The Shortness of Time ( Farnam Street )
Michael Mauboussin – Investing in Times of (the Coronavirus) Crisis
A Question for You
Chapter 6 of Lewis Carroll’s Alice in Wonderland carries this discussion between Alice and the Cat –
“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where —“ said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“–so long as I get SOMEWHERE,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”
All through your life, you may have wanted to be somewhere, but have you ever thought enough about where that should be. Where do you want to go? What do you want to achieve? Who do you want to become? What can you do to get there?
As of now, please don’t go out. Just go in.
Stay safe, stay sane, and be grateful for this life,