“Art is pleasure but invention is treasure. What is more important to society: a sheep in formaldehyde or a paper clip?”
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Good Process Delivers Good Performance
Many investors mistakenly establish an investment goal of achieving a specific rate of return. Setting a goal, unfortunately, does not make that return achievable. Indeed, no matter what the goal, it may be out of reach. Stating that you want to earn, say, 15 percent a year, does not tell you a thing about how to achieve it. Investment returns are not a direct function of how long or hard you work or how much you wish to earn. A ditch digger can work an hour of overtime for extra pay, and a piece worker earns more the more he or she produces. An investor cannot decide to think harder or put in overtime in order to achieve a higher return. All an investor can do is follow a consistently disciplined and rigorous approach; over time the returns will come.
– Seth Klarman, Margin Of Safety
Look Up At The Stars, Not Down At Your Feet
Remember to look up at the stars and not down at your feet. Try to make sense of what you see and wonder about what makes the universe exist. However difficult life may seem there is always something you can do and succeed at. It matters that you don’t just give up.
– Stephen Hawking
Technological Deflation and Structural Reform
I wrote a piece for Mint on how structural policy reforms have a similar effect to technology-driven deflation. The thesis for this article came from a tweetstorm: If your existing asset base achieves 30% output increase, you defer capex, recruitment….
Good Research Requires Being Underemployed
The secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.
Making Something Truly Different
Do something all of your own, and you can make something truly different.
– Charanjit Singh, music innovator and acid house pioneer
On Measurement
Measurement is not an alternative to judgement. Measurement demands judgement – judgement about whether to measure, what to measure, how to evaluate the significance of what’s been measured, whether rewards and penalties will be attached to the results, and to whom to make the measurements available.
– Jerry Muller, The Tyranny Of Metrics
The Absence Of Talent As A Gift
Imagine having no talent. Imagine being no good at all at something and doing it anyway. Then, after nine years, failing at it and giving it up in disgust and moving to Englewood, N.J., and selling aluminum siding. And then, years later, trying the thing again, though it wrecks your marriage, and failing again. And eventually making a meticulous study of the thing and figuring out that, by eliminating every extraneous element, you could isolate what makes it work and just do that. And then, after becoming better at it than anyone who had ever done it, realizing that maybe you didn’t need the talent. That maybe its absence was a gift.
– Alex Halberstadt, on Rodney Dangerfield
The Human Introspective Blind Spot
Human beings are primates, and primates are political animals. Our brains are therefore designed not just to hunt and gather, but also to get ahead socially, often by devious means.
But while we may be self-interested schemers, we benefit by pretending otherwise. The less we know about our own ugly motives, the better. And thus we don’t like to talk — or even think — about the extent of our selfishness. This is “the elephant in the brain,” an introspective blind spot that makes it hard to think clearly about ourselves and the explanations for our behavior.