Search

ekoshapu

Notes to Myself

Month

March 2018

Charlie Munger and Mental Models

Who are your idols? Who have had profound impact on your thinking? Who have contributed a lot in shaping up your personality, your philosophy? Who have inspired you and motivated you?

Every person would have some “idols” or influencers. That could be a single person or many people for various aspects/qualities. They could be your parents, family, friends or public figures (including “eminent dead”). How do you discover them? At what stage you “realize” that they have caused deep impact on you?

These are the questions that often fascinate me. Someone said to the effect” “Tell me what songs your youth sing and I’ll tell you future of your nation”. On similar lines I feel that one can get great insights about future by seeing who the society idolizes. If Kim Kardashian is the person you idolize, well, you are headed towards fast extinction.

And the person you idolize may change over the years, because you change and grow or the person changes and is no more relevant. The so-called “eternal” idols, or thoughts only mean that they sustain for longer period – maybe decades or even centuries.

So who are my idols – as of today? Well, I want to write about them  in detail, so won’t list all the names. But I’ll begin with the first one today.

His name is Charles T Munger, also known as “Charlie Munger” – the longtime partner of Warren Buffett and Berkshire Hathaway Vice-Chairman.

Warren Buffett is well known for his wealth and wit. But not everybody would know that one of the biggest influencers in Warren’s life is Charlie. Warren is very outspoken and you can find hundreds of interviews, books and articles on Warren. But there is not much material available about Charlie Munger. Or, it wasn’t until recently. There are four well-known books about Charlie Munger, and I possess and have read all of them.

CM_Books

There is another book I discovered recently, “On Success by Charlie Munger” which I am yet to read.

CM_On_Success.jpg

And then there are few interviews and speeches of Charlie on Youtube which I highly recommend. I will share some links at the end.

I “discovered” Charlie Munger very late in my life – when I was 31 years old. I knew Warran Buffett for few years before that and had read everything about him. I had also known Charlie as his partner, through speeches and Shareholder Letters of Buffett, but I had not “followed” Charlie much.

In general, Charlie was not very popular till 2000s (I maybe wrong on this. Maybe I am speaking only about India). But the more you read about him and listen to him, the more you crave for his worldly wisdom.

Charlie is 94 years old and still very active. Warren Buffett is 6 years younger – 88 and again, very active. The duo has now achieved a cult status (Warren had achieved it many decades ago) and people queue up whenever these two make a public appearance and talk.

What I like about Charlie and the reason I consider him as idol are two excellent qualities:

  • Charlie Munger is extremely well-read and has indulged in lifelong passion of accumulating knowledge and learning multidisciplinary skills. He quotes Confucius and Ben Franklin and Seneca and many others. To quote Charlie: “That sounds funny, making friends among the eminent dead, but if you go through life making friends with the eminent deadwho had the right ideas, I think it will work better in life and work better in education”. He also quotes contemporary thinkers and even people who were born 30-40 years after him. So he has no qualms on giving credit to whom it is due. In fact, Charlie is like a window to many other great thinkers. I got to know about many other people through Charlie’s citations, examples, quotes and then pursued these people further. In nutshell. Charlie is like an “aggregator” of all good things, knowledge, wisdom etc. You follow him as the first step and then you can follow others
  • The second reason is that Charlie has also developed his own thinking over the years. He often talks about “Mental Models” – frameworks for thinking and decision making which he has developed or compiled over the decades, and he keeps on updating and improvising them. Mental Models is a unique contribution of Charlie Munger because of which many people in investing community now rate Charlie Munger above Warren Buffett (and I don’t think Buffett would mind that. He acknowledges that often)

 

Here is an excellent article/blog on compilation of Mental Models of Charlie Munger (113 models as of today).

Mental Models: The Best Way to Make Intelligent Decisions (113 Models Explained)

I also stumbled upon a document consisting of “The Best of Charlie Munger from 1994 to 2011”. Whoever has compiled it needs a big applause! Here is the 349 page document.

The-Best-of-Charlie-Munger-1994-2011

Lastly, I will end this post by sharing few Youtube videos which I particularly liked:

 

 

 

Advertisements

Thought of The Day

31st March 2018

Thought of The Day

30th March 218

Chanda Kocchar, Videocon case and test of “ना खाऊंगा ना खाने दूंगा”

Some interesting stories have unfolded in the Indian Banking and Financial Sector in last 1-2 months. First, there was the Nirav Modi and Punjab National Bank scam, and since then many Banking frauds or scams are coming in light.

But there is one peculiar story that is still not being seriously pursued. Few days ago there was a news that the Top two ladies at the two leading private banks in India have been summoned by SFIO (Serious Fraud Investigation Office). Usually the bank officials from the concerned branch are called for such questioning. So it was a bit surprising to see that the CEOs were called. One of them happened to be ICICI Bank’s CEO Chanda Kocchar.

Then last week some stories broke out in few lesser known media, individual blogs that Chanda Kocchar was caught in a dubious deal involving Videocon group and her husband’s joint venture where ICICI Bank (headed by Chanda Kocchar) lent large sums of loan, and eventually Videocon was declared as Non Performing Asset (thereby helping her husband’s JV).

The story was not picked up by any major newspaper or TV media until this week. It was said in hush-hush manner that the case has been referred to the Prime Minister’s Office (PMO) and the PMO is sitting on the file but not willing to act. Some suggested that it is going to be a major test of Prime Minister’s motto, which he used to brag about often (but not much of late!), “ना खाऊंगा ना खाने दूंगा” – Won’t take bribe myself and won’t let others take

It is indeed a sad situation that such high profile cases are not pursued in transparent manner and politics and electorate convenience always takes over.

You should remember that Chanda Kocchar was among the top bankers who had praised the monumental blunder of Demonetization. She had called it a “gamechanger” !?

Just yesterday the ICICI Bank board announced that they back Chanda Kocchar amid nepotism rumors. See how conveniently the case has been transformed from a fraud to a nepotism issue!

Let’s see how the case unfolds and who pursues it. I have a major investment in ICICI Group companies, mainly because of their track record and sound corporate governance. But now I am not sure if they do have such high standards – in fact, does anybody else in India can claim to have highest Corporate Governance standards? We have seen the mighty fall of Satyam Computers. We have seen internal squabbles at Tata Group (Mistry vs Ratan Tata), we have seen similar power struggle in Infosys (Narayana Murthy vs Vishal Sikka). All these were reputed firms/groups who seemed so fragile once these issues came to surface.

So now one cannot be 100% sure that any business house or company or person is infallible.

In my view the Chanda Kocchar “scam” or “nepotism” issue is going to blow into a major controversy soon, and the Prime Minister Narendra Modi will be under pressure to act in this matter. Not sure if he is willing to…given the fragile state of Indian Banking Sector and the reputation of Chanda Kocchar.

Update: 31st March 2018:

CBI has registered preliminary inquiry into the Videocon-Kochhar case. Let’s see how this shapes up. How much of politics and how much of genuine inquiry/investigation…

Updae_ICICI

 

Fabiano Caruana (The Challenger) vs Magnus Carlsen (The Defending Champion) in World Chess Championship 2018

So it’s American Fabiano Caruana (The Challenger) vs Norwegian Magnus Carlsen (The Defending Champion) in World Chess Championship in November 2018 in London!

The American won the candidates match in style on 27th March to qualify as the Challenger.

Caruana2.jpg

This is the first time since 1972 when an American challenger will challenge the World Chess Champion. The last one was the legendary maverick Bobby Fischer who went on to become the world chess champion.

Caruana seems to be more popular and perceived to be friendly and likable guy compared with Magnus Carlsen who is perceived to be rude, arrogant or less friendly.

Many people are saying nice things about the new Challenger.

Caruana1.jpg

And there have been few kind persons who have helped him anonymously. This is from a profile of Fabiano Caruana on page B6 of the May 17, 2003 edition of @nytimes: “…the family has found a sponsor, who insists upon anonymity, who provides a jet for travel and money for coaching.”

Caruana.jpg

In fact Caruana’s story is interesting. You should read this interview from November 2017 to know more about his upbringing and chess journey.

Fabiano Caruana Tells Us What The Life Of A Chess Grandmaster Is Really Like

Let’s hope that we see a good contest in November 2018 when Caruana takes on Magnus Carlsen in London. I definitely want Caruana to beat Carlsen – because he snatched the World Chess Championship from my favorite Vishwanathan Anand 🙂

But the twitter poll and the current form/record of Magnus suggests that he would win comfortably.

Caruana3

Let’s see…November/December is not far away, winter is coming!

 

 

Good Read: How a blind artist is challenging our understanding of colour

A friend of mine shared this very interesting article today:

How a blind artist is challenging our understanding of colour

Source: https://scroll.in/article/873377/how-a-blind-artist-in-turkey-is-challenging-the-understanding-of-colour


I have thought about this and discussed this with friends several times before in various context. And here are my thoughts on this:

The question that still remains is:

Does the painter understand colors through his own perception? Or has he memorised them (as he mentioned at one point). Likening Red with Hot is good…but was that his own discovery or was it told to him? If it was told then he has accepted established world view of colors.

A study showed that blue color evokes friendship, socializing. Hence logos of FB, Twitter, Linkedin, WordPress, Telegram, Dropbox, Naukri, Paytm, Outlook, Google Duo and so many other Social Media Apps have Blue as prominent shade.

Now this is (or could be) induced expression (Cultivated by constant hammering of this association Blue = Friendly) or is it really there? Difficult to tell even for a person with vision. At best, it is statistical conclusion (which can be conditioned).

For example, association of saffron and renunciation/sacrifice/detachment would be natural for those who know about Hinduism and Buddhism…but does it come naturally to others? Do we know what is “saffron” equivalent for Zulu or Eskimo or some other tribes and civilizations (if they have such association)?

So my Question is: If such associations of color and emotions were told to the painter and he memorized them then what does it show – beyond the obvious that he has memorized and imbibed the color understanding of person who told him about it. And if he has developed that understanding by himself then it opens up far too many questions/ possibilities. My hunch is that it is the former…

Thought of The Day

29th March 2018

Quick Thoughts: Skin In The Game and Facebook

Since Jan 2018 I have temporarily stopped buying books. This was a harsh but much-needed decision bacause I realized that I was only buying new books without finishing the earlier ones, and in some rare cases, not even opening the books bought earlier.

Looking forward to finish the books in shelf soon and start with “To Read” list which is also piling up – with some exciting additions.

One of the books on Top of “To Read” list is the new book by Nassim Nicholas Taleb, “Skin In The Game”.

I have read book reviews and also watched several interviews of Nassim Taleb about this book. So I know the broad theme. In fact I wrote a blog post earlier on this theme and “Vested Interest” which you can read here:

The reason I remembered this was because of a note by Kotak Equity Research on “Uncanny parallels between Facebook and sell-side research. Here is the note:

Will write a detailed blog on this soon…

Quick Thoughts: Infosys and the Art of Business Transformation

Read this news about Infosys and thought of sharing Quick Thoughts (Mini-Read).

Here is the Infosys news in today’s Times of India.

So Vishal Sikka wanted to position Infy as a Product company and the rest of the management/owners didn’t. Interesting…this is a huge strategic shift and will define in couple of decades who was right.

I feel Infy present management is right. You cannot transform and position a Services org as a Product based company after 30+ yrs and after attaining huge size.

But I agree with Sikka’s vision in principle. So maybe he should have created new org for Products.

We should learn from IBM, Google (Alphabet) and Apple how they manage massive transformations successfully.

Create a free website or blog at WordPress.com.

Up ↑