Day: May 13, 2020

Kapil Gupta: Conquering the Mind


This post is by naval from Naval


This interview with Kapil Gupta was exclusively for my email list.

Highlights

Sincerity

Naval: People who ask for stock tips aren’t really serious about investing. People who ask for book recommendations aren’t serious about reading. People who ask, “What, what business should I build?” aren’t really serious about entrepreneurship.

How-To’s

Kapil: Take the person who “made it” and became world-class in whatever he did. If he went back and retraced his steps and did everything again the same way, but this time he did it by mimicking himself, he would fail.

Naval: I can’t watch Roger Federer play tennis and then swing the racket the same way. Nor will any description from him on how to swing the racket get me to swing it the right way. Then we go to intellectual efforts. We ask Warren Buffet why he invested in a company and he can try and create a mental construct as to how he thinks and how he invests in a company. But there are just as many details to Buffett’s activities, when he decides what to invest in and how he lives his life and how he thinks, as there are to Roger Federer’s body running around a tennis court, hitting a ball. At some level, the details are not transmissible. They’re not copyable.

Kapil: The things that you do greatest are the things that you know not how you do.

Truth

Naval: Society is a set of collective lies that we all believe so we (Read more...)

A Viral Market Update VIII: A Crisis Test – Value vs Growth, Active vs Passive, Small Cap vs Large!



In the weeks since my first update on the crisis on February 26, 2020, the markets have been on a roller coaster ride, as equity markets around the world collectively lost $30 trillion in market cap between February 14, 2020 and March 20, 2020, and then clawed back more than half of the loss in the following month. Having lived through market crises in the past, I know that this one is not quite done, but I believe we now have lived through enough of it to be able to start separating winners from losers, and use this winnowing process to address three big questions that have dominated investing for the last decade:
  • Has this crisis allowed active investors to shine, and use that performance to stop or even reverse the loss of market share to passive vehicles (ETFs and index funds) that has occurred over the last decade? 
  • Will this market correction lead to growth/momentum investing losing its mojo and allow value investors to reclaim what they believe is their rightful place on top of the investing food chain?  
  • Will the small cap premium, missing for so many decades, be rediscovered after this market shock?
I know each of these is a hot button issue, and I welcome disagreement, but I will try to set my biases aside and let the data speak for itself.

Market Action
As with my prior updates, I will begin by surveying the market action, first over the two weeks (4/17-5/1), following my (Read more...)

A Viral Market Update VIII: A Crisis Test – Value vs Growth, Active vs Passive, Small Cap vs Large!



In the weeks since my first update on the crisis on February 26, 2020, the markets have been on a roller coaster ride, as equity markets around the world collectively lost $30 trillion in market cap between February 14, 2020 and March 20, 2020, and then clawed back more than half of the loss in the following month. Having lived through market crises in the past, I know that this one is not quite done, but I believe we now have lived through enough of it to be able to start separating winners from losers, and use this winnowing process to address three big questions that have dominated investing for the last decade:
  • Has this crisis allowed active investors to shine, and use that performance to stop or even reverse the loss of market share to passive vehicles (ETFs and index funds) that has occurred over the last decade? 
  • Will this market correction lead to growth/momentum investing losing its mojo and allow value investors to reclaim what they believe is their rightful place on top of the investing food chain?  
  • Will the small cap premium, missing for so many decades, be rediscovered after this market shock?
I know each of these is a hot button issue, and I welcome disagreement, but I will try to set my biases aside and let the data speak for itself.

Market Action
As with my prior updates, I will begin by surveying the market action, first over the two weeks (4/17-5/1), following my (Read more...)