New year note. Evolution

Natural progression /evolution of a person.

Regardless of the field, our evolution goes through 03 distinct phases. You cross a phase as you evolve and master your chosen vocation.

Phase 1. What to Avoid.

I will be honest, I use to think Vishal Khandelwal of Safal Niveshak talks about very basic, mundane, worldly wisdom jibber-jabber which is good for SEO and clicks per page but very little value when it comes to actual returns.

But when I looked at the world within the bigger context of Phases of evolution, I realized that almost 90% of the world is in phase 01 of their evolution and that is where everyone starts from.

And a good start is of paramount importance. A solid foundation on which you build your empire.

Tell me where I would Die and I won’t go there.

Charlie Munger.

In this part of your evolution, you learn (unfortunately mostly by your own mistakes and not vicariously) that

Leverage is a Bitch.

If you are good at stock picking, you don’t need leverage as power of compounding is such that you will become insanely wealthy anyways and god forbid, if you are not good, leverage is the last thing you need. Read this article where i substantiate that almost 90% of retail using derivatives is under capitalized

Charlie Munger in his speech psychology of human misjudgement explained what pitfalls to avoid.

One of which is addiction. Here, I wrote about FNO gambling addiction you should avoid

Second thing to avoid is Business channels. Its Ok if you are watching them for entertainement, actually, NO. Its not OK even for that. I am sure Netflix will take offense. Read this article where we discussed a study how and why all fucked up stocks have maximum retail shareholders.

What Not to do is such a POWERFUL maxim that it cuts through fields and professions. for example, if you want to live long(er) eat less(er).

A lot of times (most), Via Negativa is the only way you learn as positive stories suffer from survivorship bias.

Phase 2. What to do.

Find a Niche.

Do not be a jack of ALL. Mastery of a field requires focused attention on a narrow, small and exclusive field of study. Know everything that needs to be known in your chosen field rather than being a general manager. Barring a few exceptions, Niche gets rewarded far better than jack of alls.

I know people within the Value investing domain who have mastered the micro cap segment and have made a killing doing that over and over again.

Our Dayanand Deshpande who manages MWV (MysticWealth Value) has made a fortune (he is financially independent) investing in Spin-offs and demergers.

Phase 3. How

Eat less to live more

Carbs = sugar

Binge watching netflix is bad for sleep

Ride the trend, cut your losers

Save 50% of your income

Don’t take Credit.

पता तो सबको है, करता कौन है।

After crossing phase 1 and phase 2 where you know what to do and what not do, the real game comes down to routine and habits.

The actual implementation. This is where wheat gets seperated from the chaff and men are distinguised from boys.

Now, there is no 01 size fit all solution, tone down your expectations for god’s sake, I am writing a blog, not your Shiv Khera book.

But I will recommend this book. Atomic Habits by James Clear.

The essential message of the book is that power of compounding is not the sole domain of finance. The shit works like an AUXIUM every where you apply it. Miniscule, nearly imperceptible changes can make a huge difference when you factor in time.

He explains the maths

if you can get 1 percent better each day for one year, you’ll end up thirty-seven times better by the time you’re done.

The do’s and don’ts of life are daunting if you look each one them seperately. However when you make small, tiny, miniscule atomic habits around these principals, slowly and steadily your mind starts accepting the new normal.

Small, consistent changes compound and become really large massive paradigm shifting life changes.

Probably the best way to describe the whole phenomena is that daaru ad,

Small मिलाते जाओ, Large बनाते जाओ.

Sorry for gyaaning the first day of your New Year, but lets be honest, you were anyways whiling it away on twitter ;)