Curiosity@Intelsense
Weekly dose of learning
1.
Think exponentially
You also want to be an exponential curve yourself—you should aim for your life to follow an ever-increasing up-and-to-the-right trajectory. It’s important to move towards a career that has a compounding effect—most careers progress fairly linearly.
You don't want to be in a career where people who have been doing it for two years can be as effective as people who have been doing it for twenty—your rate of learning should always be high. As your career progresses, each unit of work you do should generate more and more results. There are many ways to get this leverage, such as capital, technology, brand, network effects, and managing people.
It’s useful to focus on adding another zero to whatever you define as your success metric—money, status, impact on the world, or whatever. I am willing to take as much time as needed between projects to find my next thing. But I always want it to be a project that, if successful, will make the rest of my career look like a footnote.
2.
Is a bubble brewing?
A bubble not only reflects a rapid rise in stock prices, but it is a temporary mania characterized by – or, perhaps better, resulting from – the following:
highly irrational exuberance (to borrow a term from former Federal Reserve Chair Alan Greenspan),
outright adoration of the subject companies or assets, and a belief that they can’t miss,
massive fear of being left behind if one fails to participate (‘‘FOMO’’), and
resulting conviction that, for these stocks, “there’s no price too high.”
“No price too high” stands out to me in particular. When you can’t imagine any flaws in the argument and are terrified that your officemate/golf partner/brother-in-law/competitor will own the asset in question and you won’t, it’s hard to conclude there’s a price at which you shouldn’t buy. (As Charles Kindleberger and Robert Aliber observed in the fifth edition of Manias, Panics, and Crashes: A History of Financial Crises, “there is nothing so disturbing to one’s well-being and judgment as to see a friend get rich.”)
So, to discern a bubble, you can look at valuation parameters, but I’ve long believed a psychological diagnosis is more effective. Whenever I hear “there’s no price too high” or one of its variants – a more disciplined investor might say, “of course there’s a price that’s too high, but we’re not there yet” – I consider it a sure sign that a bubble is brewing.
Pic of the Week
India’s services exports are now inching above its goods exports. This shift has happened over three decades and is what I term decadal-changes.
Thought of the Week
“All courses of action are risky, so prudence is not in avoiding danger (it's impossible), but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.” ~ Niccolo Machiavelli
Video of the Week
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