The Joys of Compounding: The Passionate Pursuit of Lifelong Learning

Heilbrunn Center for Graham & Dodd Investing Series

by Gautam Baid

In The Joys of Compounding, Gautam Baid integrates the wisdom, strategies, and thought processes of over 200 preeminent figures in history whose teachings have stood the test of time. Distilling generations of investment and life lessons and compiling it with his personal experiences into a comprehensive guide on value investing, Baid demonstrates their practical applications in the areas of business, investing, and decision making.

The Joys Of Compounding is a celebration of the value investing discipline. It takes investors beyond stocks and business fundamentals to give them a valuable and compelling life philosophy. All lifelong learners will find this book immensely useful as a timeless source of insight and inspiration.

Genres: Finance, Business, Nonfiction, Self Help, Personal Finance, Philosophy, Economics

534 pages, Paperback

First published January 1, 2019

Reviews

[Milan · Rating 4 out of 5]

In the Joy of Compounding, Gautam Baid synthesizes the best learnings of investors and other people. I don't think he says anything new but the way he explains what he has learned over the years about investing and life is quite remarkable. The influence of Warren Buffett and Charlie Munger among others on the thinking process is quite evident. The contents of the chapters on investing and portfolio management were something any serious investor should already be familiar with. An investor should approach life with humility and try to expand his knowledge about different subjects (mental models) in order to grow his wealth and seek wisdom. One also needs to follow a process and know his circle of competence. I enjoyed the parts where he talks about learning, work and ethics. “Many people achieve success, but to sustain the same (and potentially build on it) over an entire lifetime requires humility, gratitude, and a constant learning mindset.”

***There is one annoying thing about this book. This book is full of quotes and the author keeps emphasizing parts of the quote. So after every quote it is mentioned (emphasis added). I wonder if the book was edited properly.***

[Jacob Taylor · Rating 5 out of 5]

Great aggregation of knowledge--takes a lot of effort to sweep this much insight into one pile. Buy it for all of the great quotes alone.

[Rob MacKenzie · Rating 5 out of 5]

“The Joys of Compounding” by Gautam Baid is a fantastic and valuable read. He takes huge and far-flung concepts, practices and data and funnels them into digestible, understandable chapters spanning philanthropy, market efficiency, diversification, history and beyond. Baid is a master “distiller,” and he puts a fine point on topics that seem too complex to get to the heart of – but he does get to the heart of them.
Over the last 15 years I have read close to 90% of the sources Baid cites (books, journals, papers, etc.) and I was astounded by how well he parsed those sources and really dug down to explain the subjects. He took a very intelligent and focused approach, which has a great pay-off for the reader. I would recommend not only “The Joys of Compounding,” but also the works Baid references throughout; taken as a whole, it’s a masterclass in value investing and beyond.

[Paul Blinder · Rating 3 out of 5]

I gave up half way. Its basically a collection of quotes from Buffet and Munger. Book starts out fine with some motivational advice to keep learning, but as you start hitting the investing sections its just poorly written. He contradicts himself several times, discussion doesn't keep to title of chapter; tangents. The buffet quotes get old, as you want some variety. I wanted to finish this book, but 200 pages in the book is getting irritating.

[John McLachlan · Rating 5 out of 5]

This is a remarkable examination of investing wisdom revealed by the best (and wealthiest) minds of our time. While investing writing and theories can be arcane, the writing of this book is neither ponderous, boring nor so complex it can only be understood by professionals. Gautam Baid condenses the worldly wisdom of Buffett, Munger, Graham and many other leading investors into an easily readable and informative collection of essential concepts investors need to understand if they are to survive and thrive while investing their money to improve their futures.
The Joys of Compounding is a book for the rest of us, (although I suspect it will be a useful tool for professionals as well). It is a rich and understandable explanation of what is required to develop the discipline, flexibility and patience necessary to make the most of whatever store of wealth each of us has. This book is well worth reading. In fact, if you read only one book about investing in your lifetime, this is the book you should read -- over and over.

[Milind Pawar · Rating 4 out of 5]

Mr Baid is one of the most well read person I have ever come across and the same is reflected into his writing style as well.
~40% of the book is quotes/summary from his favourite authors, investors - Buffet, Munger, Lynch, Fischer etc. One can find great book recommendations in every chapter.
Mr Baid has briefly covered his own investing journey in Indian markets as well (really interesting if you follow Indian markets)
Felt a little verbose at times but overall a good read.

[Karan · Rating 1 out of 5]

The book has mainly all the quotes from Buffet , Munger , Taleb etc. Very commercily written to satisfy all types of investor and trader community. It doesn't add any value and doesn't give any perspective. Lots of contradiction.

[Praveen · Rating 4 out of 5]

My key takeaways:

1. Importance of reading and making it a lifelong habit. If you read 25 pages a day, you will read 10,000 pages a year. Buffett and Munger read 500 pages on an average day. Reading helps identify patterns.
2. Importance of humility & simplicity. Character is how you treat others when you have the ultimate power
3. Importance of delayed gratification. Buffet's 90% wealth was made after he turned 50. Importance of Frugality - Wealth consists not in having great possessions, but in having few wants.
4. Intelligent investing is all about understanding the intrinsic value and the margin of safety.
5. Cyclicals and Spin-offs for value creation. The Graphite case example and how it fueled my entry My Tata steel / SAIL / Hindalco. Understanding the risks involved and how to play it safe.
6. Portfolio management. Always look at history and do not try to predict the future. Howard Marks example of a gambler who bet on a single horse thinking how he could lose? Horse jumps the fence. Learn from history.
7. Always be open to update your beliefs in the light of new evidence.
8. Assess the competitive edge/moats, pricing power, management efficiency, ROCE, and ROE of companies.
9. Acknowledge the role of luck, chance, serendipity, and randomness.
10. Compounding Wealth, Knowledge, Health, and positive thoughts.

[Deepesh Lakhotia · Rating 4 out of 5]

A great investing read overall. Could be viewed as a cocktail of all the wisdom available in other investing books around in this one book. A major part of the book is driven by learnings from the lives of Buffett and Munger and their approach to investing. The author makes his affection and the lessons he has learnt from them very obvious throughout the text.

Personally felt that there was definitely a potential to reduce the number of pages in the book but I guess in “The Joys of Compounding” the author also ended up compounding the number of pages in the book. :D

Not a page turner. Take your time to finish it. Should be in your bucket list of books to read if you are interested in the value investing world.

[raghav · Rating 5 out of 5]

One of the best books I read and Gautam has inspired me to take a path of becoming a lifelong learner. I am very much inspired by his journey and I want to thank him for sharing this wonderful masterpiece. This book will open many doors for its readers, and I will be forever grateful to Gautam. I have read this book just before my 20th birthday. I hope this knowledge that I have gained throigh the pages of this book and wisdom in its quotes, help me in my future.

[Angel · Rating 5 out of 5]

One of my new favorite books of all time. Gautam has assimilated knowledge from the world’s greatest minds (Buffett, Munger, Feynman, Einstein + more) on top of his own insights. Quite an adventure.

[Vikram · Rating 5 out of 5]

“The best thing i did was choose the right heroes” - Warren Buffet.

The book is a mandatory read for everyone who has just started earning, or aims to start earning money soon. The book is a brilliant collation of ideas and quotes from several famous, successful people and the lessons that the author of this book has drawn from them. It covers not just compounding money but also knowledge, happiness, health and gratitude.
From an investment point of view, the book lays several simple principles that one must follow to maximise from the effect of compounding.

“It is simple, but not easy.”

For a beginner stock market investor, this book has been an eye opener for me. I took my sweet time to read the book - approx 4 months! I did not realise that I had unconsciously incorporated various principles stressed upon in the book until i had reached the conclusion of the book. This only makes me more hopeful in achieving my goals.
This book gives you just the right type of positivity that you need in life and the author’s journey towards financial freedom is really motivating. The quotations from prominent works referred in the book gives you interesting material for further reading too.

[Michael Cluskey · Rating 5 out of 5]

This is an amazing book - I picked it up at the Berkshire Hathaway AGM this year - it’s one of the best books on investing out there - a true gift to the world

[Bharat Rathi · Rating 5 out of 5]

This is not a core finance book. It is a self help book with its theme based on finance.
The author is well read and has an understanding of how the connect the numerous ideas he has.

[Shabarish V Nair · Rating 5 out of 5]

I picked this up thinking it's a book on investing and it turned out to be a philosophical journey of not just about how to invest money but also investing in the most important thing of all - investing in ourselves

[John · Rating 5 out of 5]

The Joys of Compounding is an excellent book for the new & wise investor.

The important concepts of investing are summarized, but more importantly: the value of continual learning is stressed.

This book is well worth your time if you have committed to or want to explore the idea of becoming a “sage” earlier in life. That’s my opinion.

The values & principles of Charlie Munger & Warren Buffett are discussed.

I encourage all people from all walks of life to explore this wonderful book. 5/5

[Cyrin · Rating 5 out of 5]

There is a reason why this book is sold only as a hardcover copy and that becomes evident on nearly every page. The breadth, width and depth of knowledge in this book is immense and is transferred to the reader effortlessly.
This book is a collection of knowledge from the giants of value investing such as Warren Buffett, Charlie Munger, Benjamin Graham and many more. Like true value investing it explains how to live a genuine and fulfilled life.
After having read many value investing books the information becomes repetitive from one book to another, but that is not the case for this book. Even though the underlying information is the same, Gautam tells us which companies he invested in and the reason for his decision. It's a great genuine book built from years of experience.

[Ramaswamy · Rating 3 out of 5]

I spent a lot of time reading this book (from January 8th when I started to February 17th when I finished). There is a lot of curated work - mostly quotes from Munger and Buffett and a lot of advises and suggestions, unfortunately original ideas are few and far between. I wish Mr.Baid had focused more on detailing his experiences, him being an accomplished investor. The book sparkles in the few areas where he addresses his experiences in investing in Indian market.

Mr.Baid had a great opportunity - a confluence of knowledge, experience and communication skills, where he could have written a book on investing in India. The country has evolved significantly over the last twenty years, and Mr.Baid was in the market in almost 15 of them. The last twenty years has seen a mega crash and multiple mini bull markets. There is a lot of human interest stories out here many of which he will be privy to.

That would have been a heck of a book.

Mr.Baid read and referred a number of books and articles while researching this book. The bibliography is impressive. I have read some of the books that he refers in the book, most of them over the last two years. So the only areas that added value to me are his personal experiences. I found the section on 'being an empathetic investor' very useful.

There is no doubt that Mr.Baid writes well. I hope he writes the next book from his heart rather than from his head....

[Akhil Jain · Rating 3 out of 5]

Mish mash of other books:
My fav quote:
This focus on achieving excellence and enjoyment (even more than a focus on the realization of potential) prioritizes well-being and shows the relation between self-actualization and positive psychology.

[Asif · Rating 4 out of 5]

I have read a lot of investing books in the last decade. As a result, I am very picky about reading further books on investing as often time there is repetition.

I think I was pleasantly surprised reading this book. Somehow Gautam managed to put a lot of useful material that was new for me. Whenever I find myself highlighting large parts of a book I come to the conclusion that it was worthwhile reading the book.

He has borrowed heavily from Munger, Buffett, and other knowledgeable people but meticulously gave references to the sources.

Overall a strongly recommended book for avid investors.

[Alejandro Hardziej · Rating 3 out of 5]

This book mainly focuses on the principles and thinking behind two of the most successful value investors of all times, Warren Buffett and Charlie Munger. I found it easy to read because chapters are relatively short and cover everything, from having the right character and the importance of continuously learning, to portfolio management and decision making. There is nothing new in this book (there are plenty other good Warren Buffett books similar to this one) but it still made for an enjoyable bedtime read.

[Tirath · Rating 3 out of 5]

A great beginners book on value investing and its various facets.
In fact, it's quite a good book that compiles a lot of models and disciplines that need to be worked on when one is on the journey of long term investing.

[Eswar · Rating 5 out of 5]

This isn't just a book, it's a textbook for living a rich life (wealth, knowledge, humility, and happiness). I've highlighted and written in it as if it was a college textbook - I don't think I've done this since graduate school...

This book popped out through an Amazon referral, the sample was captivating, while also being full of quotations by other people. Yet, the curation of the quotations and the lessons that it reaffirmed were powerful enough to motivate me to become better. This is a book about value investing but the point is not just to make more money. It is to lead a richer, happier, healthier life that is aligned to your values. It's a lifestyle, a way to own your pension, and ensure that you are healthy and happy to enjoy it. A life that is aligned to your values, measured by your own inner scorecard rather than competing with others or for vanity. A life of unbridled curiosity where you grow by asking questions. You learn through research, testing, failing, and succeeding. Learn, learn, learn. Read more - be an avid student of history. Draw parallels, as history rhymes. People reacted to this pandemic similarly throughout centuries. People react to financial crashes in the same way year after year, especially the investors who should be more resilient. The book extols the virtue of equanimity, which I have also found can be cultivated through meditation, as long as you can reserve your willpower for key decisions.

Buy on the dip, but make sure you are never too long cash. Target great industries and great companies. The darling (and potentially the nemesis) will provided long term gains. Refine your process over and over, don't take shortcuts to investing or foolishly do other people's investments.

You willingly learn if you put 8in the hard work, then you need to reflect on the outcome to close the loop. You need to create your own checklist and only follow it. Always follow it. No exceptions. Otherwise you won't be able to gain the feedback from your own process to better it. It is always about the process, not the goal. Process > Goal. A lifestyle of value investing > money gained.

Key tips:
(1) Create your own checklist - for your stock picks and also for your behaviour (take away emotion)
(2) Live life by your inner score card - investing is for you (learn from your own mistakes, that will create success). Also create an inner score card for your growth that will make you happy and healthy through the ups and downs.
(3) Distinguish Uncertainty and Risk - figure out what probabilities you can allocate to outcomes and define the Expected Value of a trade. Keep learning more to refine the probabilities and the outcomes of each node in your decision tree.

[Himanshu Upreti · Rating 4 out of 5]

"The best investment you can make is an investment in yourself."

Investing has always been an enigma of sorts to most of us. Throw financial jargon and numbers at a person and rest assured, he'd get scared. But worry not, akin to The Psychology of Money, "The Joys of Compounding" is not another finance book filled with FOGs (Fact-deficient, obfuscating generalities). Instead, the book will make you appreciate investing more and more & see it in a different light as a field interconnected with other fields such as human psychology, philosophy, social science & history.

The author is Gautam Baid, CFA, who is Founder of Stellar Wealth Partners Private Limited, a SEBI-registered smallcase manager for investors in Indian stock market. But more than a finance manager, I found him to be a philosopher cultivating and communicating his life learnings out of the field of value investing.

While the book contains a lot of mental models and life learnings in the first half, the second half is more finance-esque & focuses on common stock investing, portfolio management, and decision-making. If you follow Indian markets, then you are in for a treat as author covers his own investing journey highlighting his fair share of successes and failures.

One of the biggest lessons I learned from the book related to improving my decision-making skill is to maintain a decision journal - a log that contains honest feedback on every single decision of yours and which will stop hindsight bias & can be your greatest teacher. Another big lesson was about reading more about history and less about "forecasts."

The only complaint that I've from the book is that it'd have been shorter by reducing quoted content from other eminent personalities. But aside from that fact, it's a nice concoction of finance with learnings pertaining to personal growth, & I'd highly recommend this book if you are looking to live rent-free for a few hours in the minds of finance legends such as Warren Buffett and Charlie Munger.

[Michelle T · Rating 5 out of 5]

“We spend a lot of time focusing on compounding our financial capital, but we overlook the fact that social and intellectual capital also compound. Investing in yourself, in your relationships, and in your understanding of the world pays massive dividends over time.”

It feels like this book came to me at a very appropriate time of my life. Inhale blessings. Exhale gratitude. I learnt a lot here about how to look at businesses and investing (some good reminders about key metrics, transaction and business types), but most importantly, how to translate these practices into the core of life. I enjoyed the use of quotes and the concise synthesis of some of the greatest thinkers and leaders of the world as well. Finding myself often nodding, highlighting and sharing excerpts with friends and family, I definitely hope to share this book with more people.

(My only caveat that is that, if you are already very familiar with the works of Marks, Munger, Buffet, then this may be too elementary or too much of an introductory / beginners module for you.)

[Chris Reynolds · Rating 5 out of 5]

I'm frequently asked for book recommendations, probably more frequently on learning than on investing. This book is a masterpiece of both. I absolutely love the way it is structured. First, Baid builds the method for compounding knowledge, which is not only a prerequisite to be a great investor, but also a prerequisite for a great life. The quotations, book citations, and brilliant one-liners left me with a book that had highlights, underlines, and bookmarks all over it. Furthermore, after finishing the book a few weeks ago, I've already pulled it off the shelf to look up certain sections about three times. To me, this is the sign of a truly great book. On the investing side, the examples are fresh and poignant for today, which is sometimes hard to find in good books on investing. When I am asked by young investors, what book they should start with, I will now be suggesting The Joys of Compounding. Absolutely incredible.

[Lever1 · Rating 5 out of 5]

What a joy to read this book! The vast but carefully compiled variety of topics, ranging from the foundation of successful investing (the investment in oneself), to common stock investing, portfolio management and decision making is just a true pleasure to read and great help to explore topics of interest further. In Addition, it is a marvelous collection of guiding quotes put in context which not only summarize many business school lectures but also serves as a great guide to reflected decision making, building on empathy, patience, humility, and appreciation of delayed gratification. „Work hard today to let good luck find you tomorrow.“ I highly recommend it to anyone interested in lifelong learning and value investing!

[Ankita Ojha · Rating 3 out of 5]

This book is power packed with direct quotes and concepts from Warren Buffet and Charlie Munger to the point that it seems like the book is written by them and not Gautam Baid. It talks majorly about the psychology behind investing, which can be easily extrapolated to life as well. I loved the nuggets from these greats that the book offers and the 1st chapter itself left an impression on me. However, as the book progressed, it became too technical for me. Someone who understands financial jargon or has the patience to understand it might find the book useful but I'm not there yet. Maybe I'll revisit this book again in 10 years. As of now, I would definitely recommend it to anyone who is a fan of Warren Buffet and Charlie Munger.

[Tag · Rating 5 out of 5]

While this is a book focused on investing, the principles of compounding apply not just to wealth but also to your health, knowledge, positive thoughts and this book is fulsome in that respect. Gautam reads widely and draws inspiration from Buffett and Munger which appealed to me. His ideas are not new - mostly a culmination of the best bits he learnt from his experience and reading, synthesized into easy chapters. Reading this book gives you a strong book list to pursue further personal development. It’s similar to Peter Bevelin’s “All I Want To Know Is Where I'm Going To Die So I'll Never Go There” which I’d strongly recommend too.

[Reddy Lakshminarayana · Rating 5 out of 5]

The Joys of Compounding is a must-read for every value investor in the making.
Gautam has done an extraordinary job in putting together the timeless wisdom in value investing and the impact of human behaviour and temperament. He has quoted ample sources from the masters and shaped it with his personal experiences. Not only the positives, but he has also genuinely shared his past mistakes in his investing career and the lessons learnt. It is super relatable.
I believe the book genuinely compounds the knowledge and there is ample wisdom in it. Probably it takes multiple reads in different stages of investing journey to fully discover.