How to be Happy & Successful in Life?


By Charlie Munger

If all you succeed in doing in life is getting rich by buying little pieces of paper, it’s a failed life. Life is more than being shrewd in wealth accumulation.

A lot of success in life & business comes from knowing what you want to avoid.

Develop good mental habits. Avoid evil, particularly if they’re attractive members of the opposite sex.

If your new behaviour earns you a little temporary unpopularity with your peer group, then the hell with them.

Beware of Envy

The idea of caring that someone is making money faster (than you are) is one of the deadly sin. Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain & no fun.  Why would you want to get on that trolley?

How to Get Rich

Spend each day trying to be little wiser than you were when you woke up. Discharge your duties faithfully. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts.

The Importance of Reading

In my whole life, I have known no wise people who didn’t read all the time. You’d be amazed at how much Warren reads.

I think when you’re trying to teach the great concepts that work; it helps to tie them into the lives & personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend. That sounds funny, making friends among the eminent dead, but if you go through life making friends with the eminent dead who had right ideas, I think it will work better in life & work better in education. It’s way better than just being given the basic concepts.

Reduce Material Needs

Most people will see declining returns (due to inflation). One of the great defences if you’re worried about inflation is not to have a lot of silly needs in your life. You don’t need a lot of material goods.

Avoid Debt

Once you get into debt, it’s hell to get out. Don’t let credit card debt carry over. You can’t get ahead paying 18%.

The Decline of Public Schools

You could argue that (the decline of public schools) is one of the major disasters in our lifetime. We took one of the greatest successes in the history of earth & turned it into one of the greatest disasters in the history of the earth.

Our Behaviour

Our Behaviour towards Life, makes a lot of difference while Investing.

Investing Today & Investing Later are different scenarios.

Time Value of Money never stops for any one.

Change your behaviour early.

Untill then, enjoy with today’s image.

Kaustubh Deole

Instant Gratification (तुरंत संतुष्टि)

Instant gratification is one of the most brutal enemy of an investor.

People always look for instant solutions to their problems. Everything cannot happen instantly like 2 minute Maggie Noodles.

Let’s take an example of Indian economy, the dynamics are entirely different. Imagine, a fully loaded 60 wagons goods train. Now to start and take this train to 50 kmph would take plenty of time. Similarly the case would be the same while stopping it.

Our economy is also like this locomotive. Any decision taken will take 2-8 quarters to play out. So one needs to wait patiently.

Too much of data, information these days is proving harmful to investor’s wealth and health.

Instead focus on what matters and have Faith and Patienceश्रद्धा एवं सबुरी.

Kaustubh Deole

Weekend Reading

Are you misbehaving with your money?

If you are of the opinion that you are behaving cordially and appropriately with your money, you are probably wrong. Given the way our brains are wired, it is impossible to not let our emotions overpower logical reasons. In the academic arena this is known as behavioural economics or behavioural finance. We can look at some routine day to day examples to prove this fallacy.

1. Neha had parked 5 lakhs Rs. in a fixed deposit at 8℅ p.a. and she is also serving a 3 year personal loan of Rs. 4 lakhs at 15℅ p.a.
Now logically it makes so much sense to close the personal loan as Neha has adequate surplus available with her. But by behaving irrationally she stands to lose. Having her money parked in fixed deposit gives Neha tremendous sense of comfort.
Wrong comfort zone, wrong investment decision.

2. Mr. Aggarwal is a so called intelligent investor. He follows Warren Buffett’s maxim, “Buy low and sell high.” He always buys stocks which have hit their 52 week lows and sells the ones that have hit 52 week highs.
However, Mr. Aggarwal has not made money. What is an issue? Choice of an arbitrary reference point. The company which has hit 52 week low may be in the downtrend due to some big problem and may go down further. Likewise, 52 week high does not stop the stock to go up as the company may have produced outstanding results and holds terrific potential due to some discovery.
Wrong reference point, wrong investment decision.

3. Wasim started Investing in ABC mutual fund via SIP 10 years ago. The fund performs exceptionally well and gives Wasim 20℅ compounded returns over 10 years. Wasim is happy as he is able to meet his goal of making down-payment for buying a house and is also able to prepay his car loan.
However, Wasim gets disappointed when he comes to know that his friend William has got 23℅ return during the same period.
Well, fund manager does not ideally aim to generate best returns but the returns should ideally be enough to meet investor’s goals. But Wasim started comparing his returns with William’s fund. However, what was the risk taken by William’s fund manager to generate extra 3℅ returns???
Wrong comparison, wrong investment decision.

4. If you analyse the stock portfolio of a large number of investors, you will notice the following.
a. There are few multibaggers.
b. There are quite a few failed stocks.
This happens because people hate losing money. They are affected by loss aversion. Similarly when the stock appreciates they are eager to book profits. Selling early denies investors huge amount of potential profits. Peter Lynch rightly said, “If you cannot imagine to see your investments going down 50℅ you should not be in the market. You are not yet ready.”
Wrong timing, wrong investment decision.

These stories amply prove that humans are emotional fools. Remember how companies shape our behaviour to make more profits.


Kaustubh Deole

Fixed Deposit = MASK


Last week i visited a prospective client through a reference. He shared his idea of saving & preserving money. He shared his details & my goodness; he is sitting on worth 30 lacs in Fixed Deposit!

The emotion of preserving money is great but the question is is it increasing as compared to inflation?

Obviously not.

People still think FD as a superior option to preserve money. I would rather say, the person who has invested in FD is an utter loser.

FD should ideally contain only the amount which can be used in emergency situation.

Kaustubh Deole