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Quote of the week:
“Inspiration does exist but it must find you working.” – Pablo Picasso
What it takes to beat the market
“If I were to teach a ten-class course on investing,” says the investor Rob Vinall, “the first nine classes would be about how the market and other factors mess with your ability to think clearly. In the tenth, I would say: ‘Oh by the way, this is how you build a DCF model, and this is what constitutes a moat’.” Rob’s retrospective essay was written on account of his 15th anniversary running RV Capital’s Business Owner Fund. But beyond a simple retrospective, the piece offers deep and timeless wisdom about market psychology, how to actually take a long-term view, and my favorite: the purpose of doing research. “The purpose of research is to have the emotional fortitude to stay the course when an investment is going against you,” Rob says. (Sign up here to read the memo online.) He continues:
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Speculation vs. investing
I always liked Annie Duke’s book Thinking in Bets. It’s not exactly about investing—Duke is a poker pro—but it’s about the art of making the best decisions with imperfect information amidst an uncertain future. (Which is, arguably, the nature of investing.) In a similar vein, Conor Mac explores this notion of speculation through a related, but perhaps more critical perspective: Why do smart investors seemingly make the same bone-headed bets over and over? Conor hypothesizes that a few enduring human traits—boredom, greed, amnesia—explain why cycles tend to repeat (and how to recognize them early).
A few more links I enjoyed:
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