Curiosity@Intelsense
Weekly dose of learning
1.
Choose between defence and offense while investing
In my opinion, one decision matters more than – and should set the basis for – all the other decisions in the portfolio management process. It’s the selection of a targeted “risk posture,” or the desired balance between aggressiveness and defensiveness. The essential decision in investing is how much emphasis one should put on preserving capital and how much on growing it. These two things are mostly mutually exclusive:
Insistence on preserving capital – or, secondarily, on limiting the portfolio’s volatility – calls for an emphasis on defense, which precludes pursuing maximum growth.
Correspondingly, a decision to strive to maximize growth requires an emphasis on offense, meaning preservation of capital and steadiness must be sacrificed to some degree.
It’s one or the other. You can’t simultaneously emphasize both preservation of capital and maximization of growth, or defense and offense. This is the fundamental, inescapable truth in investing. The questions listed on page one are just details, the options available for reaching your targeted risk posture.
2.
JRD Tata’s life lessons
13th September 1965.
Dear Mr. Bhansali,
I thank you for your letter of the 6th August enquiring what have been the guiding principles which have kindled my path and my career. I do not consider myself to be an “illustrious personality”, but only an ordinary businessman and citizen who has tried to make the best of his opportunities to advance the cause of India’s industrial and economic development. Any such guiding principles I might unconsciously have had in my life can be summarized as follows:
That nothing worthwhile is ever achieved without deep thought and hard work;
That one must think for oneself and never accept at their face value slogans and catch phrases to which, unfortunately, our people are too easily susceptible;
That one must forever strive for excellence or even perfection, in any task however small and never be satisfied with second best;
That no success or achievement in material forms is worthwhile unless it serves the needs or interests of the country and its people and is achieved by fair and honest means;
That good human relations not only bring great personal rewards but are essential to the success of any enterprise.
Yours sincerely,
JRD Tata
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Thought of the Week
“Where we now are going astray and losing ourselves, other men once did the same, and they left a record of the blind alleys they went down. We are like youth that can never learn from age — but youth is young, and wisdom is for the mature. We that are grown should not find it impossible to learn from the ages-old recorded experience of the past.” ~ The Roman Way by Edith Hamilton (1932)
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Thanks a lot for another fantastic read & a lods of inspiration!!! 🙏🙏