Category: Warren Buffet

I cried

Few facts first.

  • I am 34. Will be 35 this year. In other words, I will be past my prime in a few months.
  • My bank balance as we speak is 39000 and change. And no, I dont own a house. Or a car. I do own some stock.
  • I have no clue what I want to do in life. At different times in life I have wanted to make software, produce movies, become a travel writer, be an investor, teach, play poker professionally, play cricket, become a politician, make documentaries, be a twitter celebrity, become a publisher author, an adrenaline junkie and I dont even recall half of the things! A bucket list is here. 
Why am I talking about all this? Because I just a documentary on Warren E Buffett and at a point in the documentary, I cried. Will come back to it in a bit. 
For the time being, if you are alive and you think you want to be a better person, you have to see it. Its on youtube here. Dont know how long its gonna stay there. Do see it while its around. Content like (expensive to produce, insightful etc) belongs in the public domain. Never know why museums are ticketed so high. In fact one of the things that I want to do in life is to create such things. That allow humans to learn more. 
Am digressing. 
Coming back to the documentary. I’ve known of WEB since 2004 (atleast) when Prof. Bakshi first talked about him at MDI. And since then I have consumed numerous pieces of text about him. I am, what they say, a fan. And I adulate him all the time. 
So, when I heard about the documentary, I did not think much of it. After all whatever WEB says can be easily summarized in few lines. I was half-expecting it to be boring and yet another “fan” made documentary that will recycle facts and snippets from other previously published pieces of text. 

But I couldn’t be more wrong.

The documentary had original footage and interviews with the most important people in his life – Charlie, Melinda & Bill, his children and couple of friends (including Carol Loomis). I got the rare look into his office. There were pics from his family album, footage from his personal archives and above all – interview with him, on things that are important to him. For the first time, I saw WEB as a human being. I saw his private life like I’ve never seen before.

It just made the demigod more human.

So, in the documentary he talks about things like Coke, Float, Bill Gates, Philanthropy, Moats, See’s Candies, his family, his team, various companies that he’s bought and most importantly, about himself.

While watching and I could be wrong here, I realised that the relationship with his wife probably was strained. After all he was busy reading all the time. And she admits that she and WEB differed on their respective approaches towards philanthropy. She believed that she had to give more money, sooner. He believed in the power of compounding and wanted to wait out as long as he could, before he gave it away. In the end, he got what he wanted, like he has always had.

And when the documentary talks about his decision to give his wealth away. And when they showed that press conference when he signs those letters to give away his wealth to his children and Bill Gates, I broke. I cried. With tears and flowing nose (despite my nasal polyps) and all that.

I dont know why I ended up in tears. Probably the gravity of the decision? The impact that his life would have on the world? Probably it was his greatest gift to his wife (that I think came too late and WEB would say, came just at the right time)? Probably because his life is in contrast to mine and Ive been thinking a lot about mine lately.

This is where I talk about me. Rant.

Compared to WEB who is super-focused at what he does, I am all over the place. And not that I havent tried to come back to one thing, its just that it feels stuffy when I do that. I am not myself. May be I am not supposed to be focused. And like Sheldon says, “we will never know.”

I dont know what I want to do. I am competitive but I am not like WEB. I want to make the money – to use it as a tool to work towards making the world a better place. And how do I make the world better? I dont know yet. Neither did WEB. But WEB had the tools – reading and focus – and the understanding of things like reputation, compounding and other things. And most importantly he was in the game to come out a winner. And he knew what game he wanted to play. So, he played the game. And everyday he trained himself along the way (and continues to do so, even at the age of 86). And eventually he reached a point where money became unimportant. And then he figured (thanks to his wife and other things in his environment) how he planned to make the world better. Wow! What a life! What a person! 
For me, it I need to know the game I ought to be playing and then honing the skills till I have a superior, unfair disadvantage over others. So that I can make money.

Except that I am 35 and I have bills to pay. 

The other thing. Do I even need to do this? Do I really want to do this? Why do I even want to make money? If my memory serves right, I have always wanted to be the richest man in the world. I wanted to be a dollar millionaire at 25 and a dollar billionaire by the time I am 35. I actually told this to a friend at MDI (Saumya J – hope she remembers). Another 5 odd months to go. I am worth about 15000 dollars. About a gazillion times less than what I had planned. 

Compare me to 2 of the 5 people that I spend most of my time with. Last night I went on a drive with them. Both are pretty successful, on all counts. Happily married (to two wonderful women), each(family) has a kid. Both own cars, properties that run into crores (almost dollar millionaires), they have fulfilling careers, are reasonably fit and suffer from no large, life-threatening ailments to speak of. Days are full of mindless action that a high-performing naukri entails and weekends are spent with family and watching movies and running errands and there are holidays twice a year. And they both seemed pretty oblivious to fact that life could mean more (they are, as WEB says, “sleepwalking through life” – which is not wrong, but that is not for me). And I seemed lost for words to explain what that more could be. 

I saw this glimpse into WEB’s life and I immediately knew what that more is. More is spending time doing things that you are uniquely positioned to do – outcome of Ovarian Lottery. In my case, more time I spend with life and things, more I realise that my purpose is teaching. Its mentoring. Its entertaining. Getting people to achieve their dreams. Ideally a combination of all four. I just need to find a way to reach a point where I could do it at a scale that impacts billions of people. Lately, I have started saying that by the time I die, my work has to impact a billion people. I dont know the shape of my work and I hope I will find it as I go along. Just that it sucks that I am 35 already and there is that looming threat of an unpredictable end. Often when you expect it the least.

Anyhow, a few other things that I am taking away from WEB and the documentary are:

  1. Health. He gives an analogy that if you could get just one car for the rest of your life, how will you take care of it? Your body is that car. Will you not take care of it? 
  2. Focus. Though I am not sure I best exemplify this. So I am going to leave it at that.
  3. Relationships. I need to have a Susie around. Though I am not sure about kids. 
  4. Compounding. If there is one thing that you could take away from his life, it would be compounding. Not just in terms of money but other things. You write everyday. You workout everyday. The key is everyday. Build on top of other work.  I dont know if there is anything that I own that is compounding. 
  5. Reputation. Enough said. 
  6. Purpose. WEB made all the money in the world that he could. And then he gave it all away. Why was he doing it? What made him tick? I think the answer is that he was super competitive. More than anyone else. And he enjoyed it. And thats what made him do what he did. And when he gave it all away, he would have thought of no other, better way to use that money. The best part? Rather than he getting into things, he gave it to people he thought were best suited to use it! (circle of competence).
  7. Death. Mortality is a very very real thing. And with each passing day, we are getting closer to it. And that means, each passing day, you have to try harder. And we ought to do things that make us happier, better and more fulfilled. 
That’s it.

Do see the documentary. Its worth its weight in gold. 

So Long, Coke!


Dear regular readers of my blog, regular audience of my sob stories, Warren E Buffet, Neo, sgMS (remember those coke walks?), Ronald, friends and family,

Over the past few years (read ever since I can remember), you would have observed (and in some cases, tolerated) my addiction to a certain beverage and its various variants. Better known as Coke, Diet Coke and Coke Zero, this is a cola beverage. Made from water, sugar and some mystery ingredients (that apparently just two people know in the world), coke sells at about 1000 times the cost of its ingredients. Awesome business to in!

Anyways, so coming back to the point, I have finally quit drinking coke. At the height of my addiction I would drink upto 4 litres of coke and innumerable cans of DietCoke a day. Ofcourse it left a funny aftertaste on my teeth and tongue but I think I can live without it. I quit because as I grow old, I am trying to outlive myself and trying to get fitter et al. Am I saying coke is bad for health? I may be. May not be. Lets not get judgmental here.

So, with the benefit of the hindsight, I think I owe a lot to coke. The long list starts obviously with sgMS. I dont remember much now but I think she and I started bonding over coke and walks. Apart from her, coke got me access to so many other places and people that otherwise would have been difficult. Coke also gave me an escape route and a reason that I could use to avoid alcohol. Then coke gave me my sense of style (huh?) – imagine a bald guy holding a whiskey glass topped with ice cubes and coke!. Any armchair freudian analysts here?

However shunning coke creates a huge problem for me. What about all the craving for something liquid the entire day? I drink oodles of water but then there is a limit to tastelessness. While travelling, I get my fix of liquid with VitaminWater but here at home?

And since I dont really booze and I dont like citrus drinks (read fresh lime water, sodas and other assorted variants) my escape route was coke on the rocks. With coke out of the scene, I would be left sipping water and eating onto ice at parties, dinner dates and other social gatherings where you are expected to hold a glass. I need to find a replacement.

For the record and posterity, I stopped drinking coke on 15th of this month. Been 8 days and I am still going strong (despite repeated attempts of DJ Killa at corrupting me with offers to have coke at 3 in the morning). Hopefully the resolve will last for a meaningful period. Wish me luck so that I may pass through this life without another sip of coke.

And oh, one last issue! Now that I am no longer a coke aficionado, what do I do about all those coke fridge magnets, empty bottles, posters, tabs from cans, images that I have collected over the years? Any takers?

P.S.: I have made an attempt to shun coke in past as well (Feb this year). It dint last long. Lets see how long this one lasts.

Warren Buffet’s 2008 Letter to Shareholders: Notes

WEB released his 2008 letter for shareholders. Download it here. 

Following are the things that I underlined while reading the letter. Samples of his gift of the gab at play. 

  • By yearend, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.
  • Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.
  • When investing, pessimism is your friend, euphoria the enemy.
  • sucking my thumb
  • Long ago, Ben Graham taught me that “Price is what you pay; value is what you get.”
  • Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
  • As we view GEICO’s current opportunities, Tony and I feel like two hungry mosquitoes in a nudist camp. Juicy targets are everywhere.
  • A promise is no better than the person or institution making it.
  • If merely looking up past financial data would tell you what the future holds, the Forbes 400 would consist of librarians.)
  • We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.
  • Approval, though, is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

Is Warren Buffet wrong about newspapers?

Warren Buffet has always been critical of the newspaper industry. Oen of his all the famous quotes is

every time an elderly person dies, newspapers lose a reader they will never get back

He is of the opinion that newspaper as an industry thrives on revenues from advertisements and with competition and alternative access modes of information, these revenues would fall.

According to this latest article on PSFK,

the paper’s online advertising revenue is now sufficient to cover the cost of the LA Times’s editorial team – for both print and online.

May be its time to revisit few predictions. Could Warren Buffet be proved wrong by the New Media?

P.S.: Another article by Seth Godin on future of Newspapers.

Lessons from Warren Buffet for Start-Ups

Lessons for startups from WEB’s Letter to Shareholders.

Warren E. Buffet is one of the most celebrated men in the modern history. Better known as WEB, he is a self-made billionaire made most of his money from investments. His flagship holding company, Berkshire Hathaway has stake in more than 70 businesses. WEB believes in taking a controlling stake in companies and chooses a company because of the business value and the kind of people running it. Any mention to WEB is incomplete without talking about Benjamin Graham – WEB’s mentor and Charlie Munger – WEB’s partner at Berkshire Hathaway.

I would look at his few nuggets of wisdom and look at their implications for start-ups from his 2007 letter to shareholders.

People
There could not be a better starting point than Charlie Munger. They are one of the most celebrated teams in the financial world. Everyone knows that we need to select business partners very carefully. All partners should trust the judgments of other partners and should stand behind every decision.

Most of the managers at Berkshire have “… no financial need to work“. This simply means that the people who are working are working because they love working. Rewards for them are not economic in nature but are psychological – of taking their company to a new level, of becoming leaders in what they do and pushing the limits.

WEB further states that “these managers is that they have exactly the job they want for the rest of their working years“. This is probably the most important line for a startup. Have people who like what they are doing rather then employing people.

Business Decisions
A lot of startups assume that once they reach a user base, they can sell out to a bigger player. This approach can take them only so much far. They should take a cue from WEB. He has been advocating the importance of a long-term time horizon for businesses. In my opinion, selling out is ok but only after reaching a point where you think that the other party can contribute more meaningfully to the business and its shareholders.

WEB says, “as with Berkshire, a deal is a deal.” A lot depends on the way your word is taken in the market. Especially when you are starting, a lot of reputation is on stake. As it’s said, reputation once gone is gone forever.

Businesses
WEB says, “A truly great business must have an enduring moat that protects excellent returns on invested capital“. Most of the startups are engaged in reinventing the wheel. I can recall just two Indian innovative products. For a country of a billion, just two innovative ideas? Need of the hour is to look at businesses that are different, can not be copied easily and havhttp://www.blogger.com/img/gl.link.gife a moat round it. The moat could be because of the scale (IRCTC), technology leadership (Zoho), people (??), knowledge of markets (Future Group?), low cost of operations (?) and many other factors. Startups need to identify their moat and build their company around it.

Realistic Assumptions
It’s always recommended to fly high. But the feet should be well grounded for that. Like in the report, WEB says, “Berkshire’s past record can’t be duplicated or even approached. Our base of assets and earnings is now far too large for us to make outsized gains in the future.” It would have been easy for WEB to paint rosy pictures but he chose otherwise. Startups should be realistic when they set their goals and get down to implement them.

To end it on a light note, WEB says, “Just as Adam and Eve kick-started an activity that led to six billion humans, See’s has given birth to multiple new streams of cash for us. (The biblical command to “be fruitful and multiply” is one we take seriously at Berkshire.)“. Startups need to identify a business that can grow organically and can operate for a long time.

Although WEB says “Start-ups are not our game”, I could still find these nuggets of wisdom. Anyone wants to share more?

Happy Birthday Shahrukh Khan

SRK turns 42 today. Happy Birthday.

He is one of the few celebs that I want meet and talk and understand. Other ones being Steve Jobs, Bill Gates, Charlie Munger, Warren Buffet.

I dedicate the following Apple Computers advert to him …

Here’s to the crazy ones.
The misfits.
The rebels.
The troublemakers.
The round pegs in the square holes.
The ones who see things differently.
They’re not fond of rules.
And they have no respect for the status quo.
You can quote them, disagree with them, glorify or vilify them.
About the only thing you can’t do is ignore them.
Because they change things.
They push the human race forward.
And while some see them as the crazy ones,
We see genius.
Because the people who are crazy enough to think
they can change the world,
Are the ones who do.

This is not the complete text. There is more.

And here is the complete text of the advert

Here’s to the crazy ones.
The misfits.
The rebels.
The troublemakers.
The round pegs in the square holes.
The ones who see things differently.
They’re not fond of rules.
And they have no respect for the status quo.
You can praise them, disagree with them, quote them, disbelieve them, glorify or vilify them.
About the only thing you can’t do is ignore them.
Because they change things.
They invent.
They imagine.
They heal.
They explore.
They create.
They inspire.
They push the human race forward.
Maybe they have to be crazy.
How else can you stare at an empty canvas and see a work of art?
Or sit in silence and hear a song that’s never been written?
Or gaze at a red planet and see a laboratory on wheels?

We make tools for these kinds of people.
While some see them as the crazy ones, we see genius.

Because the people who are crazy enough to think
they can change the world, are the ones who do.

Source: Archive.org

Mukesh Ambani is richest in world


Mukesh Ambani, Chairman of Reliance Industries Limited is officially the richest person in the world as of 29th October. He is worth $63.2 billion.

With Indian stock index reaching 20,000, his personal wealth has peaked $63billion. He leads Carlos Slim Helu ($62 billion), Bill Gates ($62 billion), Warren Buffet ($56 billion) and LN Mittal ($50 billion). Telecom, Software, Investments and Steel have been left behind by Petrochem.

This brings me back to the question … How much is enough .. ?

Another one from WEB

This is what WEB replied to a shareholder, when she pointed that WEB has made a mistake in the annual letter.

Dear Nancy:
I enjoyed your letter. What we tell people is that we put one mistake in each annual report to encourage annual reading. But if you believe that …

Sincerely,
Warren E. Buffett

Her blog has a quick analysis on WEB’s annual letters and why they appeal to financial and non-financial world.