Notes to Myself



Good Read: Zen and The Art of Bookselling

There are many booksellers who sell books on pavements, or road-side, but very few do it passionately. I know few such people in Pune and visit their stalls often and also get good books at bargain price.

Recently one such person – Sameer featured in a Marathi newspaper. Sameer has started a WhatsApp group for book lovers and regular visitors of his stall on Lakdi Pool (I am also a member), where he shares info about good, rare books and people instantly book them. At times he conducts auction of rare books and people fiercely bid for them and often raise prices multi-fold. Here is a newspaper clipping about Sameer from Loksatta (Marathi daily).


The reason I remembered this and decided to write this blog is that I came across this wonderful article recently about a bookseller in Mumbai and thought of sharing it as part of the Good Read series.

Bablu has said some very profound things in his video! Worth watching!

I am reproducing the article from (along with link to original article and video).





Skin-in-the-game vs Vested Interest

Yesterday I was working on a stock idea for which I had to write analysis and fill in a template form. The form had couple of standard questions such as whether you are a SEBI registered investment professional etc. The last question on Disclosures was: “Have you invested in the stock you are covering? If yes, how many?”

This question got me thinking. The question was plain and simple: “Are you eating your own dogfood?” Or, since I am a vegetarian, the question was: “Do you eat your own pudding?”

The question has two sides or themes: Skin-in-the-game and Vested Interest – which are two sides of the same coin.

quote-ideas-may-be-superior-to-vested-interest-they-are-also-very-often-the-children-of-vested-john-kenneth-galbraith-107-34-44quote-the-press-which-is-mostly-controlled-by-vested-interests-has-an-excessive-influence-albert-einstein-61-69-70quote-every-historian-has-a-vested-interest-the-decline-and-fall-of-the-roman-empire-was-not-peter-greenaway-148-6-0634Upton Sinclairglobal-perspective-cambridge-igcse-key-terms-35-638ideas-may-be-superior-to-vested-interest-they-are-also-very-often-the-children-of-vested-interest-quote-1Skin-in-the-GameSkin in the game - WBWhen you have skin in the game you behave differently

A typical stock analysis and recommendation is for identifying multi-baggers or stocks with huge upside potential.

If you recommend a stock because the stock, according to you, is going to go 5x, and at at the same time you disclose that you don’t own a single stock, the obvious question would be – “How come you don’t own a stock which you believe would go up 5x?”. It means two things: (1) Either you are sure or there is no conviction OR (2) Maybe you have another 20x stock idea which you are not disclosing. Whatever maybe the case, this lack of “skin-in-the-game” makes the stock recommendation suspicious.

On the other hand, if you recommend a stock and disclose that you have a significant position in it, and you have invested a lot of personal money in it; the obvious thought would be that your recommendation is biased. Since you have “vested interest” in seeing to it that the stock is bought by people you would give a positive analysis/report.

So it’s a catch-22 situation. Is there any way out?

There is. But it is a process and not one-time activity. First of all, you should buy the stock. Skin-in-the-game is absolutely important. You have to share the risk and reward of your recommendation. Secondly, if the stock has significant upside (say 5X) you should also buy and keep buying while it moves up. It shows conviction on your part that you are super-bullish. At least, you should never sell.

This dilemma is not only about investing; it is true about many other walks of life. For example, if some Indian living permanently in the US, having no investments in India, constantly lectures on what India should do and how it should improve systems, sooner or later people are going to shut him up. He has no skin-in-the-game. He should not preach from outside. If he cares, he should be in India improving things from within.

Now take case of Office of Profit. If you are part of Government or a Ministry that can decide fate of an industry and thus a specific company, and you also happen to be beneficiary in that company (stakeholder or a Director), then you clearly have vested interest. That is strictly unethical and illegal and not allowed.

All such matters are very subjective and there is a fine line between right and wrong, accepted and not-accepted. Skin-in-the-game can be a virtue in some cases and a vice in others. Ditto with vested interest.

Nassim Taleb, the famous author of books such as Black Swan and Fooled By Randomness has written a book titled “Skin in the Game: Hidden Asymmetries in Daily Life” which is on the same theme. I haven’t read it yet but going by other books of Taleb it should be an interesting read! Look forward to reading it soon…


My life and work …by Henry Ford

I had written a couple of posts before on My life and work by Henry ford. This is one book I immensely like and I would recommend this to everybody who is an entrepreneur, a wannabe entrepreneur, interested in Business/ Finance or like to read quality and thought provoking stuff!

I have uploaded the soft copy to my blog. You can download it here:

It is not a big fat tom, so you can very well print it and read – no need to purchase it (which anyways is difficult to get)

Do tell me how you find the book…

~ Kaustubh

The New Buffettology: Book Review: Part 1

I recently read this book – ‘The New Buffettology’ by Mary Buffet (who was Warren’s daughter-in-law for 12 years before she divorced her husband and Warren’s son, Peter) and David Clark.

I immensely enjoyed reading this book; though not a fool-proof, it has some very interesting snippets and anecdote’s about Warren Buffet’s investment strategies and business acumen. It gives you some insight into how Warren thinks and makes his investment decisions.

The books is filled with small write-ups/ tid-bits used to explain some basic concepts/ Warren’s investment philosophies. Here is one excerpt on the shortsightedness of Mutual Fund and how investing in Mutual Funds with long-term perspective is not a good idea (to which I fully agree. I had similar thoughts but was not able to put it in such precise words as te following write-up has done!)



A number of years ago the authors were having dinner with a middle-aged mutual fund manager who oversaw tens of billions of dollars for the money management division of a large West Coast Bank. He brought along an enormous book that contained a brief analysis over two thousand different companies that he and his fellow analysts followed. They called it their “investment universe”. At his invitation we thumbed through the book and found a company that we knew Warren had been buying, Capital Cities Communications. Capital Cities was a television and radio broadcasting company run by Tom Murphy, a management genius with a keen eye for the bottom line. Warren loved this company and once said that if he were stranded in a deserted island for ten years and had to put all his money into just one investment, it would be Capital Cities. Definitely a strong vote of confidence.

Our friend also had a list of the stocks his fund had purchased. As we read through the list, we noticed that he didn’t own any Capital Cities. We quickly pointed this out and told him that Warren had recently been buying it. He said that he knew it was a great company but he didn’t own it because he didn’t think the stock price would do much over the next six months. We told him that was insane. That it was a fantastic long-term investment selling at a great price. He told us that he was under great pressure to produce the highest quarterly results possible. If he couldn’t beat his competitor’s returns quarterly, his clients would take their money elsewhere, which meant that he would lose his job, his Porche, and the income to send his son to Harvard. (Sounds grim, doesn’t it?)

Our mutual fund manager felt he couldn’t buy a single share of Capital Cities for his fund, even though he knew it was a great investment, because he wasn’t sure that it was going to go up in price over the next six months. This is the nature of mutual beast; it caters to the short-term oriented mutual-fund-buying public. If it doesn’t, money flows out the door and down the street to the fund that produces better short-term results.

(in case you are wondering, Capital Cities eventually merged with the ABC television network, which eventually merged with entertainment giant Disney, making Warren billions in the process. Good things do come to those who have patience and foresight.)


I am now fully convinced that investing in Mutual Fund with a long-term perspective is a bad idea…and have vowed never to invest in it 🙂

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