BC BOOKS
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1/ There are a ton of books about Financial & Fundamental Analysis, Scuttlebutt and Technical Analysis. But there aren't many books 'taking risk'.

Among the few that exist, 'Zurich Axioms', written in 1985, is the best. Here are my key takeaways from the book.

 2/ A bit about Max Gunther's (The Author) background. He was an Anglo-American journalist and writer, who wrote 26 Books.

His father, Franz Heinrich, was the New York Head of Schweizerischer Bankverein, which later merged into the famous Union Bank of Switzerland (UBS).
3/ The 'Zurich Axioms' were a set of unwritten rules followed by a informal group of Swiss Bankers and Traders who used to socialize around Wall Street after World War II. Mr. Heinrich was one of the founding members.

Max Gunter formalied these 'Axioms' by writing about them.
4/ There are 12 'Major Axioms' and 16 'Minor Axioms' (Corollary to the Major Axioms) in the book.

But remember, this is MY key takeaways from the book and not an exact summary. So you might find quotes, phrases and links inserted here and there by me (Not from the Author).
5/ Axiom #1: In order to earn returns, you must take risk. Risk will make you worry.

Risk-taking and worrying go hand-in-hand. If you're not worried about an investment, you're not taking risk.

Spend half your energy towards earning an income and the rest towards speculation.
6/ “Every occupation has its aches and pains. If you keep bees, you get stung. Me, I get worried. It’s either that or stay poor. If I’ve got a choice between worried and poor, I’ll take worried anytime.”

— Jesse Livermore.
7/ Minor Axiom #1: Bet meaningful stakes.

Bet big, but not so big that one unlucky turn can wipe you out. Also, betting too little would lead to mediocre returns.

Bet enough to make you worry about a loss, but in an opportunity whose potential gain would make you very happy.
8/ This thread written by me on 'Kelley Criterion' and Capital Allocation might be a useful reference point for Minor Axiom #1.

Alright, back to it.

https://t.co/vzUSnjYgdr
9/ Minor Axiom 2: Resist the allure of Diversification.

Putting your eggs in different baskets is fine. But it's not ideal if you have too many baskets to watch over. Diversification can reduce risk to an extent. But taken to an extreme, it can also reduce potential returns.
10/ "Diversification may preserve wealth, but concentration builds wealth."

— Warren Buffett.
11/ Major Axiom #2: Take profits sooner rather than later.

Greed will always make you 'wait for more' even if you've achieved considerable returns. Always take your profits once you have acheived your target returns or made considerable amount of money.

Don't press your luck.
12/ Minor Axiom #3: Determine what you want before entring a trade.

Answer important questions like 'What do I want from this trade?', 'How much is enough?' and 'When will I sell?' before, not after entering a trade.

This makes exiting the trade so much easier.
13/ Major Axiom #3: When the ship starts to sink, don't pray. Jump.

Things go wrong eventually and many times over. Be willing to take a loss. The fear of regret, pain and the shame of admitting you're wrong will prevent you from doing this. Overcome them as quickly as possible.
14/ Minor Axiom #4: Accept small losses.

Whether it's holding through a temporary loss on a gainful journey or exiting a bad trade permanently, learn to take the sting of a small loss. Expect them several times in your journey.

Small losses are the cost of big gains.
15/ Major Axiom #4: Distrust forecasts.

Human behaviour cannot be forecasted. Distrust anyone or anything claiming to do the same.

“It’s easy to a prophet. You make 25 predictions and the ones that come true are the ones you talk about.”

— Theodore Levitt (Economist).
16/ Major Axiom #5: Don't look for formulas to get rich.

'Get rich quick' or 'get rich easy' formulas don't exist and if they do, don't work. Luck plays a bigger role in our lives than any of us would admit. So ignore all ready-made investment formulas.
17/ Minor Axioms #5: History doesn't repeat exactly the way we expect it to be. Don't believe in conclusions rooted solely on some historical event.

Minor Axiom #6: Future price movements cannot be predicted using past price movements (Might not be the favorite Axiom for many).
18/ Minor Axiom #7: Correlation is not causation. Our minds try to find patterns where none exist. Be cautious.

Minor Axiom #8: Beware the Gambler's Fallacy. Winning streaks or strokes of luck run out. The world isn't out to make you rich magically.
19/ Major Axiom #6: Don't fall in love with a speculative idea.

Minor Axiom #9 and #10 also go on to say: Don't latch on to an investment idea emotionally (Loyalty or nostalgia). Be willing to drop an investment idea in a heartbeat when a better one comes along.
20/ Major Axiom #7: A hunch can be trusted if it can be explained.

A hunch is something you know, but you don't know how or why you know it. So dig deeper and find out. If there is substance, you can go ahead with it.

But Minor Axiom #11 warns, don't confuse a hunch with hope.
21/ Major Axiom #8: God isn't out to make you rich.

God isn't out to make you rich, neither is a supernatural evil bent on making you poor.

Minor Axiom #12 and #13 dismiss Astrology and Superstitions. The major point is that you shouldn't take financial decisions based on them.
22/ Major Axiom #9: Differentiate between Optimism and Confidence.

Optimism means you expect the best to happen. Confidence means you're prepared to handle the worst. Know the difference.

Sucessful betting is all about being 'confident' and not merely 'optimistic'.
23/ Major Axiom #10: The popular opinion is wrong.

Disregard the opinions of experts, gurus, brokers, bankers and forecasters. In order to know something, you must analyze and understand it yourself.

As the Russian proverb goes, 'Doveryai, no proveryai' (Trust, but verify).
24/ "Nullius in verba." (Take nobody's word for it).

— The Royal Society's Motto.

This is one of my favorite quotes and it's also on my Twitter profile description. Very fitting when it comes to the world of investing.
25/ Minor Axiom #14: Stay clear of fads. The best thing to buy is something nobody wants.

This shoud have been a Major Axiom. The best time to buy something is when it's unpopular and vice versa while selling.

Basically 'buy low, sell high', but it's challenging to do it right.
26/ Major Axiom #11: If a bet doesn't pay off, let it go.

"If at first you don't succeed, try again" might be a good idiom for life, but not so much when it comes to investing.

Minor Axiom #15: Never average down on a trade you're convinced is bad. Cut it short.
27/ Major Axiom #12: Plan, but not too far out into the future.

Long term plans have the drawback of ignoring the role of unexpected events on your outcomes. Make sure your process is right and you're ready to take decisions on time, but never settle on a single plan for life.
28/ Minor Axiom #16: Shun 'buy and hold' investing.

This Axiom warns against 'buy and hold' type of investments. The future it unexpected. So expect things to go wrong often. Be ready to react quickly when they do.

Don't assume investing for the long term takes out all risks.
29/ That's the thread.

If you liked this, then you will definitely like the original book. Find it, buy it, read it.

I also loved this look-back on the Book by Philip Ryland for the Investors' Chronicle in 2014. Perhaps you will too.

https://t.co/oAINAZTdoB

More from Dinesh Sairam

Dinesh Sairam
Dinesh Sairam
@Dinesh_Sairam
This thread is for investors or those who are interested in CDSL as an investment. Often the central reason quoted for an investment here is the gush of FCF the business produces and some float money also to boot. But this argument ignores a central problem as well. (1/11)

I completely agree that CDSL is a business that produces ample amount of Free Cash. So, it begs the question: "What are they doing with all that cash?" Generally, firms can utilize the cash on their books in 4 ways: Dividends, Acquisitions, Capex/Investments and Buybacks. (2/11)

CDSL does have a Dividend Payout Ratio of ~35-40%. But Dividends are the least efficient way of utilizing cash, due to the Triple Taxation on Dividends. More

Handled well, Inorganic Growth is so lucrative that some companies build their business models around acquisitions (Say, MSSL or Cyient). However, CDSL literally CAN'T be one such company. Read 7 (c) of the below regulatory document to know more:

https://t.co/071lwnnwJ4

(4/11)


CDSL can also reinvest cash into their own business, like most companies do. But CDSL (And most Exchanges) have little need for Capex/Reinvestment. CDSL's IPO came in at Rs. 523.99 Crores. Two years in, the Cash and Investments on their books stands at Rs. 650 Crores. (5/11)
IDEAS
Dinesh Sairam
Dinesh Sairam
@Dinesh_Sairam
1/ Since "liquidity" has been the buzzword these days, here's an anecdote and a powerful lesson from history about printing unlimited amounts of money. Story time. #fintwit

2/ Our story begins with Mansa Musa or Musa I of Mali, an African king who consistently figures in the list of richest people in the world (Inflation-adjusted). One of his given names was 'Lord of the (Gold) Mines of Wangara'. Lest we forget, Gold was the 'Money' in those days.


3/ One fine day in 1324, Musa decided to go on a pilgrimage to Mecca. Of course, it was easier said than done. Mecca was ~8,500 Kms away from Timbuktu, Mali. Ultimately he did make that journey and it has been recorded in the script "The Chronicles of the Seeker" by Mahmud Kati.


4/ Famously, he took a ton of 'money' (Gold) with him to aid in his journey (Well in his defense, it was ~8,500 Kms). About 60,000 laborers and soldiers carried 2 Kgs each and their camels carried 13 Kgs each, bringing the tally to an estimated ~1,30,000 Kgs of Gold.

5/ Being a generous King, he donated Gold left and right to every poor person he saw on the way. Regions of Cairo, Medina and Mecca became instantly 'rich'. The estimated donation is ~32,000 Kgs of Gold or ~$2 Billion in today's estimate.
ECONOMY
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Dinesh Sairam
Dinesh Sairam
@Dinesh_Sairam
1/ I've Valued 150+ companies using the Discounted Cashflow (DCF) Model. Far be it for me to say I am an expert. But if you've done this as much as I have, you start noticing certain patterns.

Here are 10 lessons I've learned from using the Discounted Cashflow Model.


2/ Every investment decision you make follows a Discounted Cashflow calculation.

You let go of X today to earn Y in the future. You wouldn't do that if you didn't expect to earn an expected amount of returns (r).

Nobody wants to let go of X and get back X years down the line.


3/ When you invest in a company, you hold claim over the Assets and the Profits of a Company. Without diluting your ownership, Assets and future Profits are generated out of one thing and one thing alone: Free Cash Flow to Firm.

FCFF is the treasure at the end of the rainbow!


4/ Combining the above two observations, a company may not always make Profits in the present. In fact, if it's a young company or in a new market, losses are a given.

Eventually though, future profits should be large enough to offset or overtake all the past losses in PV terms.


5/ For most companies, generating Returns falls in a spectrum: Have high Margins and generate lower Sales in relation to Capital Employed Vs. Turn Assets faster but have low Margins (Or somewhere in between).

For Indian context, compare the Business Models of D-Mart Vs. NESCO.
ALL , DCF
Dinesh Sairam
Dinesh Sairam
@Dinesh_Sairam
@abhishec_s @Sanjay__Bakshi The most rational course of action is to buy below your expected value, hold when it's between your expected value and overvalued zone and sell above overvalued zone (No in-betweens or holding extra cash).

But there are many impediments in executing each step.
WISE INVESTING
Dinesh Sairam
Dinesh Sairam
@Dinesh_Sairam
1/ Howard Marks once said that before buying an asset, above anything, he wants to know “the amount of optimism that’s in the price.”

All investors can do this with a handy tool: The Reverse DCF.

I'll also leave a download link to my compact DCF Model at the end of this thread.

2/ We all know a regular DCF. But's what a "Reverse DCF"?

If we consider that a DCF is a Linear Equation, we could say the 'X' (The unknown variable) is the Intrinsic Value.

In a Reverse DCF, we start with the Market Price and try to find some other variable, say Sales Growth.


3/ Let's start by taking an example: VST Industries, a Cigarette-maker based in India.

I valued them on my blog a while ago. I'll be retaining the old assumptions, but using the latest financials.

So please note that the Valuation isn't accurate

4/ This is a "Regular DCF" of VST Industries. The Assumptions I've made indicate an Overvaluation.

The Intrinsic Value is Rs. 3,012, but the Market Price is Rs. 3,492.

Let's not dwell on whether this is correct, since we discussed earlier that this isn't an accurate Valuation.


5/ If we want to do a "Reverse DCF" instead, we need to pick a different variable to 'find'. Say, I will pick the Sales Growth numbers.

I will now remove the Sales Growth numbers from the Model and assume that Sales Growth is the same across the years for ease of calculation.
VALUATION

More from Books

Deep Note
Deep Note
@1DeepNote
10 Incredible Lessons From the Book “Zero to One”

⚡️Book Review⚡️


1. Focus on One Thing

👉 The truly successful ones will put all of their effort behind one unique idea or business plan and throw all of their weight behind that effort.

2. The 80/20 Rule

80% of your profits or yield will be produced by 20% of your customers or products.

👉This fact is also true for most of the other topics.

3. Invest Early

Maximizing retirement savings should be a key interest to any successful entrepreneur.

👉It will lead to greater dividends as you age and will generate wealth much more quickly than you might think.

4. Ignore the Common Wisdom

To be successful, to truly create a 1 from 0, you’ll need to:

👉 think for yourself and come up with a new product or solution that people don’t already know that they need.
BOOKS
Deep Note
Deep Note
@1DeepNote
10 Key Lessons From the Book “Black Swan” By: Nassim Taleb

⚡️Book Review⚡️


1. Don’t chase black swans, instead, let them permeate your life.

👉You can do this by experimenting, cultivating serendipity,

🚫not taking bell curves too seriously, and investing in lots of small outlier but high-risk opportunities.

2. Black swan events Key attributes:

- Extremely impactful
- Are outlier events
- Are retrospectively predictable, not prospectively predictable

🚫Try to avoid situations that can fool you in a huge way, and avoid depending on huge, and potentially harmful predictions.

3. Randomness mainly comes from lack of knowledge

Surviving until tomorrow could mean that you’re either more likely to be immortal, or closer to death.

👉Both of these conclusions are based on the same exact data.

4. Unknowns are more important than the knowns

👉We can master things in one field and fail to transfer the same to another.

Everyone has their own limitations when it comes to learning from experience or observation.
BOOKS
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Thomas Chua
Thomas Chua
@SteadyCompound
Marathon Asset produced several iconic investors such as Nick Sleep and Jeremy Hosking.

Their letters from 2002 to 2015 provided a treasure trove of insights into their investment frameworks and how they look at the capital cycle.

Here are my main takeaways:


1/ Periods of high profitability leads to reckless investments.

When profits are high:

-Boost CAPEX with little regard for ROIC
-Competitors will follow suit to avoid losing market share
-CEO's incentives aren't aligned with shareholders

It's a race to the bottom.


2/ The capital cycle will swing down when investments are taken too far.

Forecasts that were reasonable will now look overly optimistic.

Profits collapse, management teams are changed, CAPEX is cut, and consolidation begins.

This will pave way for a recovery of profits.


3/ Asset growth matters

Consider both asset growth at the company and industry level.

Avoid industries where assets are growing rapidly.


4/ We tend to extrapolate

When overdone, investments that appear logical at first can become disastrous.

We have a tendency to forecast linearly when many things are cyclical.

Examples: trade cycles, credit cycles, etc
BOOKS , FINANCE
Zain Kahn
Zain Kahn
@heykahn
I have a $100,000 business degree.

But I've learned 10x more by reading books.

10 business books that will change your life:

Getting to Yes by Roger Fisher

Lessons:
• You can negotiate anything you want.
• The best negotiation tactic is to first offer the other side something they want.


Drive by Daniel Pink

Lessons:
• Money alone isn't enough to motivate us.
• We are most motivated when we can also achieve control and freedom.


The Almanack of Naval Ravikant by Eric Jorgenson

Lessons:
• The most effective way to get rich is to learn how to build and sell a product.
• The only real test of intelligence is if you get what you want out of life.


Atomic Habits by James Clear

Lessons:
• Habits compound to produce huge results.
• The best way to build habits is to make them easy, attractive and rewarding.
ALL , BOOKSTOREAD , BOOKS
Book Quotes
Book Quotes
@Strong_Mindd
7 Powerful Lessons from the Book "Skin in the Game"

By Nassim Nicholas Taleb

| Thread


1. "You will never fully convince someone that they are wrong; only reality can.

To be precise, reality doesn’t care about winning arguments; survival is what matters."

2. "Focusing on just words put us at a dangerous path since we are much better at doing than understanding. Doers win by doing and not by convincing."

3. "Don’t take advice from people who don’t have skin in the game, i.e., be aware of the person who gives advice, telling you that a particular action is good for you and while it’s also good for him or her. While the harm directly affects you and not him."

4. "You don’t want to win an argument; you want to win whatever you’re after money, goals, convertible car."
BOOKS

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George Mack
George Mack
@george__mack
THREAD: 15 of the most useful razors and rules I've found.

Rules of thumb that simplify decisions.

Bezos' Razors:

• If unsure what action to take, let your 80-year-old self make it.

• If unsure who to work with, pick the person that has the best chances of breaking you out of a 3rd world prison.

Skinner's Law:

• If procrastinating on an item, you only have 2 options:

1. Make the pain of not doing it greater than the pain of doing it.

2. Make the pleasure of doing it greater than the pleasure of not doing it.

Luck Razor:

• If stuck with 2 equal options, pick the one that feels like it will produce the most luck later down the line.

I used this razor to go for drinks with a stranger rather than watch Netflix.

In hindsight, it was the highest ROI decision I've ever made.

Bragging Razor:

• If someone brags about their success or happiness, assume it’s half what they claim.

• If someone downplays their success or happiness, assume it’s double what they claim.

The map is not the terrain.
ALL , BUSINESS , PRINCIPLES
Dr Fish Philosopher Todd (Dr FPT)\U0001f41f
Dr Fish Philosopher To...
@ZoeSTodd
1. I was walking in the woods yesterday and I had an epiphany. It wasn’t one I wanted to have. I was thinking about today’s class, where we are reading Kimmerer’s ‘Gathering Moss’. I’ve taught Braiding Sweetgrass in multiple classes every year since 2016. It’s eminently teachable

2. Both books are beautifully written. Students uniformly enjoy them as assigned reading. They do a great job communicating to non-Indigenous folks the contours of basic Indigenous relationships to more-than-human beings. They’re wildly popular with white readers.

3. I’ve found Braiding Sweetgrass to be a great entry point for non-Indigenous folks to Indigenous scholarship. But this is where yesterday’s epiphany comes in. Neither Braiding Sweetgrass or Gathering Moss tends to the deep deep lineages of Indigenous scholarship in Canada or US

4. As the popularity of ‘Braiding Sweetgrass’ has soared, I’ve seen more and more white folks wax on about ‘braiding knowledge’. But they often don’t know any of the lineages of these concepts beyond what is presented in this one book. They confidently run with this.

5. Kimmerer does a commendable job of weaving in her own experiences, her family stories+nods to some very important knowledge keepers who deserve to be celebrated for their work. But Braiding Sweetgrass does not tend to the citational politics Sara Ahmed & others teach us about
SOCIETY
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Jaya_Upadhyaya
Jaya_Upadhyaya
@Jayalko1
SRI MOOKAMBIKA DEVI, KOLLUR (KAR)

There was an Asura, Kaumasura, who was doing penance to please Shiva and get a boon. To prevent him from asking for a boon, Devi Saraswati made him dumb (hence called Mookasur)
Later, Adi Parashakti slayed him and came to be called Mookambika.


It is said that Adi Shankaracharya had a vision in which Devi agreed to follow him provided he did not look back. He kept walking and was assured of her presence due to the sound of anklets. When he reached here in Kollur, he turned back as the sound of anklets had stopped.


So Devi stayed here and merged with the lingam. The place came to be called Mookambika Kshetram.
The linga has integrated on it’s left side MahaKali, Maha Lakshmi and Maha Saraswathi and on the right side- Brahma, Vishnu and Shiva.


A swarna rekha (gold line) divides this linga into left and right portion. Adi Shakthi in this Udhbhavlinga form appears only here.
Devi sits in padmasana and has 4 hands.
Adi Shankaracharya installed the Sri Chakra in front of Devi and also composed the Soundarya Lahiri here.
ALL
Antonio Garc\xeda Mart\xednez
Antonio García Martíne...
@antoniogm
Ok, I'll hop on this Elizabeth Warren/Native American testing bandwagon (gently and non-politically).

I've been a @23andMe customer for a while, and have followed their ancestry updates closely.

All is more or less as expected....except for this bit about Native American.


The family is almost completely composed of Spanish peasants (from various regions) who emigrated, along with a massive wave in the late 19th-cent./early 20th-cent., to Cuba back when it was a booming economy (richer than Spain's) and worth emigrating to (Communism killed that).

Also, the native population of Cuba was annihilated early on---was the first place the Spanish colonized after all. Having a native background in Cuba would be like having the same in, say, Massachusetts, particularly if you're (say) mostly Irish. Just really, really unlikely.

(Note: the North African/Arab background is less mysterious. The Iberian peninsula was part of the Muslim world for centuries. It would be odd *not* to have some Arab/Middle Eastern background coming from Spain. Given the family is mostly from Northern Spain, it's small though.)

I have a Spanish passport, have been back to the ancestral villages in Spain, seen the church where my grandmother was baptized, my grandfather told me stories about growing up as the child of Spanish colonists in rural Cuba. The native bit just clashes with all the family lore.
ALL
Anastasis
Anastasis
@OrdersofM
https://t.co/6cRR2B3jBE
Viruses and other pathogens are often studied as stand-alone entities, despite that, in nature, they mostly live in multispecies associations called biofilms—both externally and within the host.

https://t.co/FBfXhUrH5d


Microorganisms in biofilms are enclosed by an extracellular matrix that confers protection and improves survival. Previous studies have shown that viruses can secondarily colonize preexisting biofilms, and viral biofilms have also been described.


...we raise the perspective that CoVs can persistently infect bats due to their association with biofilm structures. This phenomenon potentially provides an optimal environment for nonpathogenic & well-adapted viruses to interact with the host, as well as for viral recombination.


Biofilms can also enhance virion viability in extracellular environments, such as on fomites and in aquatic sediments, allowing viral persistence and dissemination.
ALL