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June 8 - July 1, 2021
philosopher Blaise Pascal: “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.”
“The difference between successful people and really successful people is that really successful people say no to almost everything.”
He has never sold a stock short because the maximum upside is 100 percent (if the stock falls to zero), while the downside is unlimited (if the stock soars). “Why bet with those odds?” he asks. He also largely ignores the infinite complexity of macroeconomics, focusing instead on a handful of critical microfactors that are likely to drive a specific business. In short, simplicity rules.
Be patient and selective, saying no to almost everything. Exploit the market’s bipolar mood swings. Buy stocks at a big discount to their underlying value. Stay within your circle of competence. Avoid anything too hard. Make a small number of mispriced bets with minimal downside and significant upside.
“Munger says he doesn’t care about being rich. What he really cares about is having independence. I fully endorse that. What the money gives you is the
ability to do what you want to do in the way you want to do it.… And that’s a tremendous benefit.”
“You can’t get away with lying to other humans,” says Pabrai, “and that’s a very profound idea.”
Buffett’s advice that the ideal amount to give your kids is enough so they can do anything, but not so much that they can do nothing. Buffett had pledged to give the bulk of his billions back to society, so Pabrai decided to “clone the giving.”
Rule 1: Clone like crazy. Rule 2: Hang out with people who are better than you. Rule 3: Treat life as a game, not as a survival contest or a battle to the death. Rule 4: Be in alignment with who you are; don’t do what you don’t want to do or what’s not right for you. Rule 5: Live by an inner scorecard; don’t worry about what others think of you; don’t be defined by external validation.
“Take a simple idea and take it seriously.”
“The border between brilliance and stupidity is hard to discern.”
Pabrai’s strategy of “extreme concentration” is influenced by Munger, who has said that “a well-diversified portfolio needs just four stocks.”
“On my gravestone, I want them to write, ‘He loved to play games, especially games he knew he could win.’
Templeton spent millions funding scientific research at Harvard Medical School and elsewhere on whether prayer works. He excitedly listed for me some of the many questions he hoped to answer: “Do the people who are prayed for get well quicker? Does the prayer work only if the person who is sick does the praying, or can it be done by somebody else? If it’s done by somebody else, is it important that the person praying put his hands on the person prayed for? Do you pray for the cancer to disappear, or do you pray that God’s will be done?”
Templeton also funded scientific studies that investigated the benefits of virtues such as forgiveness, humility, honesty, and love. He provided financial incentives for university professors to teach courses on “how science reveals more about God.” He also funded the Templeton Prize for Progress Toward Research or Discoveries about Spiritual Realities, which rewarded “entrepreneurs of the spirit” for “expanding our vision of human purpose and ultimate reality.” Eager
to emphasize that these ethereal matters are more important than worldly concerns, he structured the annual award so that it would always be more lucrative than the Nobel Prize. These days, t...
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They thought it would help me to become self-reliant and self-confident if I had to do everything myself. And, boy, was that a marvelous education.… It’s the greatest gift, having to rely on yourself.”
“You have to buy at a time when other people are desperately trying to sell.”
“Most people get led astray by emotions in investing. They get led astray by being excessively careless and optimistic when they have big profits, and by getting excessively pessimistic and too cautious when they have big losses.”
Second, said Templeton, beware of your own ignorance, which is “probably an even bigger problem than emotion.… So many people buy something with the tiniest amount of information. They don’t really understand what it is that they’re buying.”
