Book Review – Modifying Investor Behavior – It not a Number Game It’s a Mind Game

My good friend – Hemant Beniwal of the The Financial Literates recently published a new book, and I just finished reading it this morning.

This is a fantastic book, and I can whole heartedly recommend it to anyone interested in improving their finances.

Hemant has written an easy to understand book with powerful concepts that are very important in your journey to invest better, and be financially secure.

The book is divided into ten messages and Hemant provides commentary on all of his messages and I can say that I agree with every one of them.

Here is a picture from his book about his commandments.

I will write about numbers 1, 2, 6 and 8 here just because they are closer to my heart than the other topics.

Equity is the best asset class: From my own experience I can say that I agree very much with this statement. If you are investing in equities for a long period of time then they will in all likelihood exceed returns from every other asset class. Understanding equity in the sense of buying a business, and then holding on to it makes it easier to own stocks for very long, and in this manner you can emulate some of the top investors in the world.

Hemant has written a very nice chapter on why you can’t imitate a Warren Buffett or Peter Lynch, and I agree with that too. You won’t ever have the same access to a float that Warren Buffett had or the ability to pour through annual reports, but by modeling your thinking on the way he thought you can certainly benefit from investing the way he did.

Timing is impossible: This is also an important subject, and Hemant has captured it quite beautifully and simply. It is just not humanly possible to time the market, but the good news is that you don’t need to. You need to invest for the long term and do it consistently. That will be the key to returns, not buying on dips, and selling on highs.

Bear markets are a true friend: People who don’t invest consistently or who haven’t seen bear markets often panic when the markets crash, and sell out everything at a loss. This is the opposite of what you need to do if you need to make money in the market. Don’t Panic is the mantra.

Investing is simple, but not easy: I think this is the essence of the book. Hemant propounds principles that have been known to us for decades, and have proven to work. You don’t need to be an astro physicist to understand them. Why then do so few people follow it? Because they aren’t easy. When every ‘expert’ on TV is talking about crashes and panics how can you hold on to your stocks then? Some things about investing are counter intuitive until you internalize them and see them work in your own portfolios, and at that time it becomes second nature to you.

Conclusion

This is a very good book written by an honest, and sincere professional that everyone can benefit from. The book resonates with me deeply because I have seen these principles work in my own investments over a decade through even the great recession, and countless crashes before and after that.

Please spend the few hours needed to read Modifying Investor Behavior – It not a Number Game It’s a Mind Gameand apply it to your own investing life.

Book Review – A Bed of Red Flowers: In Search of My Afghanistan

I recently finished reading A Bed of Red Flowers : In Search of My Afghanistan, and I was deeply moved by this book.

This book is written by Nelofer Pazira who lived for ten years under the Soviet occupation in Afghanistan, escaped to Pakistan and emigrated to Canada from there.

The book is her story about growing up in Afghanistan, and I can’t recall reading anything sadder or more powerful in recent times. What strikes me most about her story is the drastic change that has come about in Afghanistan in just thirty or forty years, and how some parts of the story are so relatable because we have all experienced 9/11 and its after effects, but other parts of the story shock you, and surprise you.

 

For instance, at one point in the story Nelofer Pazira speaks about how her father saw her mother the very first time, and how she was wearing a mini skirt at the time. I was frankly quite surprised at that because I never knew Afghan society was like that at any point in history. I think a lot of us assume that Afghanistan was always the way we are used to seeing it now, but that is far from the truth. The book does a great job of presenting this contrast and giving you a good history lesson about Afghanistan written in a beautiful manner.

I will quote a couple of passages from the book to show what I mean. The first one is the passage I referred to earlier.

My father still fondly recounts their first meeting as if it were yesterday, his story like a script from a romantic movie. A young woman with long blonde hair, dressed in a miniskirt with a stylish sweater over her shoulders, smiled at him, and Habibullah’s heart was bound up with the ringlets of her hair—as he made clear in a verse he composed to mark the occasion.

The second is a passage from the time of the Taliban occupation, and reading that just leaves you aghast.

Hygiene is a problem in Niatack. None of the mud houses I’ve been to has a bathtub. Women complain that they don’t have enough water to wash their children, let alone themselves. “Could we build a couple of public bathhouses?” I ask. The Iranian authorities show us a public bathhouse. It’s for men only. “Our women don’t go to public baths,” says a man, fixing his square hat over his curly hair. “It is a question of our honour.” But no one can see them inside a closed bathhouse, I say. “No, they can’t, but knowing that women are inside the bath, other men—men who are not their husbands—can imagine that they are naked. It’s a dishonour.”

What happened in Afghanistan is a tragedy, and one that is usually viewed from the events of 9/11 and after. This book is a great story about the Afghanistan that existed before Taliban, and also of a young girl and her family that suffered through all of this.

The other thing that strikes me about the book is the author’s love for her country, and her childhood friend who she has to leave behind in Afghanistan. The stories of individual atrocities fill you with horror, but there is a sadness in the words that don’t describe an atrocity but just the passage of time and change in the course of lives of the characters. It is hard for me to describe this but you develop such an empathy with the characters in the book knowing that they are all real and have suffered through this that it has the powerful effect of making you stop and think about how those people must have felt like how the author would have felt when she didn’t receive a letter back from her friend, what were her fears, what did she do to overcome them, what was her friend thinking, was she saddened by the fact that someone was waiting to hear from her and could not. It is all very powerful.

Nelofer Pazira also actually travels back to Afghanistan in search of her childhood friend, and there is a movie called Kandahar which is inspired by this. The move is quite popular apparently, but I didn’t know about it, and have still not seen it.

All in all, A Bed of Red Flowers is a great book, and I would definitely recommend it to all of you except the ones who think they may not be able to handle the sadness that the book will fill you with.

Disclosure: The link to Flipkart is an affiliate link which means I’ll get a small commission if you buy the book from this link.

Book Review: Animal Farm

I’ve recently finished reading Animal Farm written by George Orwell, and it is quite an extraordinary book.

It is a classic and I won’t be surprised if a lot of you have already read it, but if not, please pick it up and give it a read. It is brief, thought provoking and although it is an allegorical novel about the Stalin era in Soviet Russia, I’m sure you will be able to relate to the characters and see some of that behavior around you even today.

The story is about a farm in England where animals are fed up of the tyranny of their human lords, and overthrow their rule in a revolution. The animals come up with maxims to govern themselves, and pigs being the smartest animals take the leadership position and govern the farm.

As the story progresses, the pigs become more and more authoritarian, and flout all of the initial maxims established at the time of founding of the Animal Farm.

There are different animals in the farm, and each is used quite cleverly to display certain innate traits that in most cases you can identify with as well. For example, there are sheep who bleat a certain slogan to brainwash the other animals, there is a donkey who is very stubborn and cynical, but perhaps the best of all and my favorite character is the horse named Boxer.

Boxer is a strong horse who works harder than anyone else, and is loyal to a fault. I was very moved with how his character is developed in the story, and how it ends. Boxer is extremely hardworking, loyal and naive. He works harder, and harder throughout the story, is blind to all the injustices around him, choosing only to believe in his simple maxims of hard work, and their leader Napoleon always being right and in the end is met with a cruel fate.

I felt that Boxer’s character correctly represents a lot of us today who work hard, have good intentions, desperately need a leader, and when we find that leader whether he be Kejriwal, Modi or Salman Khan, we are impervious to their flaws, and defend their actions blindly to a fault.

This is quite a quick read, and a wonderful story, I would definitely recommend that all of you give it a try.

Book Review: Game of Thrones Series

(There are no spoilers in this review)

A lot of you must have seen the hit TV series – Game of Thrones, and most people who see the TV series absolutely love it. I’m a big fan of the TV series myself, and it is easily the best thing I’ve ever seen on TV.

A lot of my friends who have read the books and watched the TV series tell me that this is one of the rare instances where the TV show is as good as the books so I was never that keen to read the books. That along with the fact that I don’t read a lot of fiction never got me started reading these books.

However, a couple of months ago I had a long plane ride ahead of me and I decided to pick up the third book of the Game of Thrones series, and without doubt, this is the best fiction I have ever read.

Which book to start with if you have watched the TV series?

Since I had watched the television series, and I knew that there are a number of books in this series, I wanted to pick one up that started off where the television series left. In order to do that you have to pick up the third book in the series named – A Storm of Swords, and start reading it somewhere in the middle.

The television series doesn’t follow exactly the same sequence of events as the book so at first it was a little confusing but I skimmed through the parts, which were familiar, and at about 80% of the third book, you come to a point where all events are new.

I was also a little confused as to which book to buy because the TV series is called Game of Thrones with multiple seasons as is common for any TV show.

The series of the books however is called “A Song of Ice and Fire” and within this series there are five published books and two unpublished ones.

Here are the names of the five published books:

  1. Game of Thrones,
  2. Clash of Kings.
  3. A Storm of Swords,
  4. Feast for Crows and
  5. Dance with Dragons.

Game of Thrones Storyline

The storyline of Game of Thrones is set on a planet which has unpredictably long summers and winters, and the period would be the equivalent of the medieval period on earth when there were kings, knights, castles, sieges, and so on. There is an element of magic in the story but not too much.

George RR Martin is the author of this series, and in an interview he said that magic is like salt in a stew, if there is too much salt then that is all you can taste so there has to be a balance and I think that’s a great analogy. At no time does the story become unbelievable or over the top, and most of the time you don’t even think about the magical elements as over the top even though they always have a strong bearing on the story.

What is so great about Game of Thrones?

The great thing about Game of Thrones is the conflict and unpredictability. The storyline is great, and there is nothing predictable about it. There are no heroes in the story, and the leading characters can be killed off any time. There is no clear distinction between good and evil except for a handful of characters, and there is no guarantee that the good characters will live, or even if the bad characters will live. There are plots within plots and secrets within secrets. The storytelling is amazing, and at times, it reminds me of the Mahabharata, which has got some incredible stories as well, and each story leads to another story.

Difference between the TV series and books

The TV show has a lot of nudity and violence, but the books are even more graphic. I think both are optimal in their setting. If the TV series were to follow everything in the book then perhaps it would become too graphic to show on television.

The characters are usually younger in the book, and that’s definitely no doable on television. You don’t want your heroes to actually look 16 years old.

The biggest difference to me however is the pages and pages worth of dialog that the characters have in their mind which tells you who is thinking what. This can’t be shown on television and I feel even though the TV series does a great job of showing character’s motives and thoughts, a lot of things can simply not be captured on television that are the characters are said to think to themselves in the book.

The books are longer of course, the last book is over a thousand pages, and it takes hours to read through it, the TV series is shorter with just ten episodes per season so television in this case is definitely less of a time suck than the book.

Recommendation

If you like reading novels and fiction then this is definitely worth a read for you. These are all very long reads though, and take hours to finish so if you want something quick or can’t spare the hours it requires to complete a book then you can just enjoy the TV show.

Book Review: To kill a Mockingbird

I’ve recently finished reading Harper Lee’s – To Kill a Mockingbird, and I really enjoyed this classic novel. The novel is set in a fictional small town in Alabama during the Depression, and is narrated by Jean Louse Finch or Scout who is 5 when the story starts, and is 8 when the story ends.

The story is about Scout and her older brother Jem growing up to witness the injustices and wrongs in the world, and their relative reaction and adjustment to it.

Most of the first half of the book revolve around the children playing, and giving a glimpse into their world, and while the story is interesting, I wasn’t sure what to make of it till the second half of the book starts.

The second half of the book is where the story picks pace, and where the main incident takes place. As you read further in the book, the more sense the previous pages start to make, and you begin to appreciate how the characters have developed, and how the outlook of the children have changed based on the events unfolding around around them.

I think this is a good story, especially for all parents because it shows how Scout and Jem’s father – Atticus Finch, who is a respectable lawyer, and moral compass of their town brings up his children and teaches them about morality, and the co-existence of good and bad in people.

I also think this is one of the best titles that I’ve ever come across. Killing a mockingbird symbolizes killing innocence, and destroying something which has caused you no harm.

Throughout the book, several characters are introduced who symbolize the killing of a mockingbird in varying degrees, suffering caused to them because of no fault of their own.

The book is beautifully written, and all the characters develop wonderfully, and the contrast between how they react to the injustices in the world around them is quite moving.

Although not a parent myself, I feel that parents will especially enjoy this book because of the connection between Atticus Finch and his children, how he raises them, and how that influences their outlook of the world as they grow up.

I couldn’t put this down once I started reading it, and highly recommend it.

Book Review: The Power of Full Engagement

I have recently finished reading The Power of Full Engagement by Jim Loehr and Tony Schwartz and found it quite useful.

The main idea behind the book is that you should focus on managing your energy, and not your time to excel in your professional and personal lives.

The authors train with athletes to manage their performance, and they have used the same principles to train corporate executives to better perform in their work.

The comparison with athletes is an interesting one and they speak about how athletes train 90% of the time to perform the remaining 10% time, and how this number is so skewed for corporate executives who probably work 90% of the time with just 10% time off.

This was a very interesting concept to me and while most of us may never feel the same performance pressure as an athlete; we also never get the same luxury of training and rejuvenating that they do.

The authors build on this concept of training the mind and body like athletes and talk about four different types of energies that you need to build in order to excel:

Physical: The foundation of success and well being is good health and they talk about the importance of building your physical energy reserves and how you can do so. There was a section here that spoke about how your physical capacity diminishes if you don’t exercise and I felt that although it is an easy to understand concept, it is not very intuitive. Before I started working out regularly, I never stopped to think that by not working out, I’m losing strength and my body is atrophying. While at the gym, I saw people much older than myself work out much harder, and while it is embarrassing, it is quite eye opening and inspiring to think that you can be that fit even decades from now.

Emotional: Emotional energy is the range of positive or negative emotions you experience, and the authors speak about doing things for the sake of doing them in order to renew your emotional energy. I could relate to this as I had stopped reading Mahabharata some time ago due to my busy schedule, and I felt that this is something I just can’t spend time on right now. The authors say that when you do things just because you like doing them, and not because they are required of you, those things renew your emotional energy and help become more focused in your professional and personal lives.

Mental: Mental energy is your power of concentration, ability to remain focused, creativity, activities that challenge your brain like solving a puzzle or playing a game of Chess. I see this as anything that pushes you out of your comfort zone intellectually, whether it be a game of Scrabble or in my case, trying to read a map!

Spiritual: Frankly, I had thought that I would just skip this section of the book as I’m usually not very keen on matters of religion, or spirituality but I found this part of the book most interesting.

The way they have defined spirituality is really in terms of virtues and values that are most important to you. And what is sometimes frustrating and even somewhat depressing is that you can’t name the values that are most important to you.

One of the things I liked best about this section was where they asked you to think about people you admire and then think about the qualities that you admire the most about them. At first I started thinking of public figures and leaders, and their qualities but then my mind wandered to people I knew in real life, and the qualities that I admire in them and that make me go wow, and lo behold these are your own personal values. What you admire in others is what you wish to see in yourself.

So, I realized that when I praised someone’s frank and straightforward attitude, that is the quality I want to see in myself as well. Doing this exercise was very meaningful and revealing for me.

Conclusion

I really liked The Power of Full Engagement and I think this is definitely a book that you should add to your list in this new year. Some of the concepts discussed are new and novel, while some others are refreshing reminders of what you may know already, all in all – very useful.

Disclosure: The links to the book will take you to Flipkart and if you buy the book from that website I will get a commission. 

Book Review: How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life

I finished reading “How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life” written by Dilbert creator Scott Adams today, and I enjoyed it very much.

I have been reading Mr. Adams’s blog for several years now, and I have also read most of his earlier books, so it was no surprise to me that the message in the book resonated with me, and I was able to finish the book in a few hours.

The book is about how Mr. Adams achieved success, and he lists down the factors that contributed to his success. This may sound like a self help book, but is very different from any other self help book because of its unconventional message.

I will talk about three specific points from his book that I found particularly interesting and will sum up the book after that.

System versus Goals

One of his key ideas is that people shouldn’t have goals but instead rely on a system to achieve success. An example of a difference between a goal and a system is that a goal can be losing 25 kilos by the end of the year while a system can be getting into a routine of exercising 15 minutes every day.

For me a good example is the difference between having a target in terms of subscribers – say 15,000 OneMint subscribers by the end of the year or a system where I say I will set aside an hour for blogging every day.

The latter is a system whereby I am telling myself that I need to get in the habit of blocking an hour for blogging every day. If I’m not able to finish a post in that time, or I’m not able to answer all comments that is still fine because I was dedicated to the blog for that one hour and what you achieve within the hour will always vary.

This type of thinking is good for motivating me to write because often the idea of finishing a post is a lot more daunting than the idea of spending one hour on blogging.

I think this is a useful way to look at things, and I’m trying this idea out with blogging and a few other things.

Maximizing Energy

Another interesting idea in the book is about maximizing energy and doing things that make you feel positive and get your energy up which rubs off on other things that you do in your life.

This is something I can easily resonate with in terms of blogging. Many times I have thought that the time spent on blogging is better spent doing something else that has more tangible and direct rewards. But every time I take a break from blogging to focus on such a thing I fail. I don’t see any gain in my productivity in other aspects of my life and I feel that I’m just frittering away the time that I would have used for blogging. Blogging energizes me in a way that no other thing does, and that is then reflected in other things I do.

Affirmations

Affirmation is positive reinforcement by writing down your wish a few times every day. An example from the book, “I, Scott, will become a syndicated cartoonist.”

Mr. Adams state that these have worked for him, and this is perhaps one of the more controversial parts of the book which a lot of people will question, and a few may have just stopped reading the book altogether after coming across the part where he claims affirmations have worked for him.

My own view of these things is that our knowledge is so limited that we can’t rule anything out. Our minds are simply too small to comprehend the workings of the universe, so I have a healthy and distant respect for anything that sounds mysterious or magical. There is simply no way for me to say affirmations don’t work, and if they have worked for him, they may work for others as well.

Conclusion

I think everyone should read this book at least once to get exposed to the ideas in it because I think they are truly useful. Not everything may be acceptable to you, and everything needn’t be to be your time’s full worth. Even if you like one or two ideas and are able to implement them I think that will change your life in meaningful ways, and you shouldn’t deprive yourself of that opportunity.

Budgetonomics Review

Deepak Shenoy and Dheeraj Singh have teamed up to write a short ebook on the recent budget called Budgetonomics: Demystifying Budget 2013, and the result is great!

It is short at 40 pages, and it took me less than ten minutes to breeze through the ebook yesterday.

It costs Rs. 99 or $2 and was well worth it as far as I am concerned. At this point, I should note that I’m not a typical reader, and while I appreciate having a PDF in my Google Drive that I can use to look up how the composition of government revenues changed in the last few years, I’m not sure how many others are interested in this information. (Here is a chart from the book)

Composition of Government Revenues

I bring up this point because the macro level statistics and graphs were the most valuable part of this book as far as I’m concerned, and not all regular readers will be interested in that kind of detail.

All the charts in the ebook:

  • Government revenue composition
  • Tax collection under major heads
  • Expenditure growth and their composition
  • Fiscal deficit over the years
  • Effective tax rate and share in total taxes
  • Number of companies by effective tax rate

After dealing with numbers and charts, the book takes a look at the highlights of the budget and then deals with the more specific matters that affects individuals.

I would say that the utility of this book is to have a small PDF that has most key features and statistics from the budget in one place that’s easily accessible and not looking to learn new things about the budget itself.

There has been such wide media coverage of the budget that I would argue that everything pertinent about it has been written already, and you will be disappointed if you are looking for something new.

However, if you look at stats about deficits, spending etc. from time to time and would like to have them all at one place, then this little book is very handy.

You can purchase it here. Budgetonomics: Demystifying Budget 2013

Disclosure: I am in no way related to this book, and don’t stand to gain financially or otherwise from its sales. 

My interview in a book about blogging by Deepak Raj

Deepak Raj who runs the extremely popular blog: BikeAdvice approached me a few months ago as he was writing a book on blogging and wanted to do an interview with me.

He interviewed 4 other popular bloggers from India, and created a mini book called BLOG ROCKSTARS – 5 Bloggers Reveal Their Secrets to Successful Blogging.

The other 4 bloggers he interviewed were:

  1. Shabbir Bhimani – IMTips
  2. Faisal Ali Khan – Motor Beam
  3. Manish Chauhan – JagoInvestor
  4. Raag Vamdatt – RaagVamdatt.com

He had sent all of us a questionnaire which we filled up and sent back to him, and then based on that he asked some follow up questions as well.

Here are a few sample questions that he asked:

  • How do you define the success of a blog?
  • What has been your most effective marketing method so far for bringing new readers?
  • In your opinion, what are the most common mistakes new bloggers make?
  • What is the biggest opportunity that has come your way through blogging?

It was interesting to see that people had a lot of varied answers to the questions and if you are familiar with any of these other blogs then you would know that each of the bloggers have very distinct styles.

Deepak runs a million pageviews per month blog which is huge, and I thought he asked some good very good questions.

If you are interested in blogging, and want to get a glimpse of how bloggers from India have approached this then I believe this book will be useful for you.

This is a digital book that you can buy on Amazon for $2.99 and then read on your Kindle or the Kindle app on your PC, Mac, iPhone or Android phone as well as tablet.

And I’m sure some of you are wondering if I get anything financially from the sale of this book, and the answer is no, I don’t get anything from the book sales.

Book Review: Makers: The New Industrial Revolution

Makers is the most amazing book I’ve read in recent times, and I’m not surprised that I liked this so much because it is about one of the things I’m quite fascinated with viz. 3D printing.

The book is by Wired editor Chris Anderson who is actually in the process of quitting Wired and doing his startup which is around 3D printing full time.

Chris Anderson takes a look at the current state of 3D printing, traces its history and talks about how this is changing the way manufacturing is done currently, and what it means for the industrial economies of the future.

For a long time now, people have been saying that the future of manufacturing is no longer assembly lines, and this book does a lot more than that in terms of showing what people are currently doing with this technology and how much it could potentially change our lives in the future.

I learned about a lot of new things from the book in terms of things currently done like the Kickstarter project, 3D printing in biology, how cheap 3D printers were, additive and subtractive technologies, CNC machines, laser cutters etc. but most of all the macro view on how all this is changing our lives and what manufacturing could look like is very insightful and I don’t think it has even been written before.

It shouldn’t surprise you then that Makers also figures in FT’s list of best books of 2012. I highly recommend this book and will end this short review with small passage from the book that sums it up nicely.

the Third Industrial Revolution is best seen as the combination of digital manufacturing and personal manufacturing: the industrialization of the Maker Movement.