Notes to Myself


Good Read/ Collection

Good Read: Investment Lessons from Chess

Two of my passions are “investment/valuation” and “chess”.  I immensely enjoy spending time on both and keep reading/learning. So I was twice as delighted when I read about the title of this article “Investment Lessons from Chess”!

Usually such articles only have fancy title and when you start reading you get totally disappointed. But not in this case! I really liked the article and hence thought of reproducing it here with due credit and link.

So read and enjoy this article by Mehrab Irani (Twitter:@RealMehrabIraniif you like investments and chess…


Most people don’t think; some people wrongly think that they are thinking; while very rare people actually think.


I was recently invited as the chief guest at a chess competition. As it is customary for the chief guest to deliver a talk, while preparing my talk for the event and speaking at the event, I found a lot of similarities between chess, life and investments. This article summarises some of those findings. Play to win; but be ready to lose. We cannot solve our problems with the same thinking in which we created them.


No One in Chess, Life or Investments  Ever Won by Just Making the Forward Moves: We are disillusioned that we have to always make forward moves, to win in life or investments. But chess teaches us that, sometimes, to move forward in the game, to win in life, or to make the best investment decisions, we need to move a few steps backwards as well. To get a better job, we need to quit the current job; to derive a more profitable business deal, we need to give small incentives; to avoid big investment losses, you need to cut small losses; some situations demand us to spend money to get rich and so on.


Even a Pawn Can Convert Itself to the Mighty Queen: Once a tiny pawn is able to navigate and negotiate all the enemies and dangers to reach the other end of the board, it can convert itself into the mighty queen. Never underestimate the potential of anything in life or investments. All significant things began sometimes when they were insignificant. Most large companies began as small companies and many of the large-cap stocks started their journey on the bourses as small-caps. Small savings, over a period of time, create great wealth which capacitates a person to achieve financial emancipation.


Moves Which a Knight Can Make, Queen Can’t; Way a Pawn Can Kill, a Knight Can’t: Chess has six types of pieces— pawn, knight, bishop, rook, queen and king. While there are some similarities between the moves of various pieces, each piece has its own unique way to move. All pieces, except the knight, move in a straight line—horizontally, vertically or diagonally. A knight is unique as it moves to a square that is two squares away horizontally and one square vertically, or two squares vertically and one square horizontally. The complete move, therefore, looks like the letter L. Unlike all other standard chess pieces, the knight can ‘jump over’ all other pieces of either colour to its destination square. Although the queen, which has the most widely spread power to move up to any extent diagonally, horizontally or vertically, it still can’t jump over other pieces; nor can it move in L shape. The knight’s ability to ‘jump over’ other pieces means it tends to be at its most powerful in closed positions while a queen or bishop is more puissant in open long positions. Also, although a pawn moves straight and forward, it kills one step diagonally which can’t be imitated by the knight.


Whether it is life or investments, everyone has his or her own space; all of us have some gift with which the Almighty has given us for this earthly journey. We have to identify that divine talent, discover our genius, hone our skills, gain experience, improve our suaveness, consolidate our strengths while minimising our weaknesses and play the game in the best way we can.


Plan but Be Flexible with Your Plans: Chess trains you to think outside the box. There are many times in a game where your plans are foiled and you need a creative solution to stay in the game. Thinking outside the box helps you find solutions to problems in ways that others may not think of. Chess teaches us to plan but it also inculcates the essential habit of persisting and winning when the plan fails. This is also a skill you will need, over and over again, in life. Things don’t always go according to plan and people are unpredictable. The less rigid you are, the better you’re able to handle situations that come your way. For example, when your decision to buy a stock has been based on faulty analysis or information, it’s better to be flexible and get out of the wrong investment at minimum loss rather than sticking to it and nursing your ever-increasing losses. Remaining flexible is an invaluable lesson in life.


Sacrifice Is the Ultimate Wisdom for Victory:  Sacrifice is a very important lesson thought by chess: you may sacrifice a pawn to make a better attack later on in the game; a pawn has to be sacrificed, to save the bishop and the rook needs to be sacrificed, to save the queen. The same principle applies, once you walk away from the chessboard. Sacrifice is a necessary part of life as well as investments. Insurance premium is a small monetary sacrifice made to protect ourselves, our loved ones and our assets from unforeseen situations which may randomly arise. Postponing spending on extravagances today to create your investment kitty will help you enjoy luxuries at a later stage without disturbing your financial independence. Sacrificing a safe job for a profitable future business venture, working to learn and grow rather than merely earn are sacrifices one makes in life to do things you really want, at a later stage. Without sacrifice, we will never get what we truly want or be completely happy.


Protect the King or Game Is Over: Things which are important should never be at the mercy of things which are not significant. The game of chess is on till the king survives. Hence, at all times, most resources should be directed towards protecting one’s king and destroying the opponents. While dealing with money and finance, you must know who is the king—what is the importance of asset allocation; how to protect your wealth from financial predators; how to budget for yourself before you pay others; when to cut spending and when to spend your way to riches; the best investment avenues and how to create positive leverage to multiply your wealth; how to insure your present and future wealth; and know the rules of money to avoid the common financial mistakes. Never let your king, whether in life or while dealing with your money, be at the mercy of anything else.


Investment Is a Board Game: Investments (and life), like chess, is a board game—you must know when to make the right move and when not to make the wrong move. You must know when to wait and when not to procrastinate. You must know when to think and when not to think too much. To a mind that is still in life, the universe surrenders. To a mind that is still in markets, during volatile times, the stock market surrenders.


When Someone Makes a Move Which You Don’t Understand; Don’t Try To Understand It: When someone makes a move which you don’t understand, don’t try to understand it as it might be an insensate move. When everyone in the market is greedy, don’t just follow the herd; when some market guru recommends a stock, don’t just buy because the so-called market guru has recommended; just because majority of people are pursuing a particular career or business venture, don’t enter it, if you don’t feel comfortable or understand its intricacies.


Win with Grace; Lose with Dignity: When you know you can’t lose, you are bound to win. But when you lose, you should know how to lose with dignity. The more you worry about being applauded by others and making money, the less you’ll focus on doing the great work that will generate applause and also make money. Two things define you— your patience when you have nothing and your attitude when you have everything. When you’re happy, you enjoy the music; but when you’re sad, you understand the lyrics. Chess teaches you to enjoy the music as well as understand the meaning and purpose behind the lyrics. Chess teaches that while dealing with your investments you should not be a victim of mental accounting or decision paralysis or bigness bias or buyer’s remorse or sunk fallacy theory. Nor should you suffer from the endowment effect.


Strategy without Patience Can Be Caustic; Patience without Strategy Can Be Anaemic: Strategy without patience can be caustic; patience without strategy can be anaemic; both, together, are the qualities of an astute winner. Make a proper strategy while dealing with your money; execute your plan but also keep periodically rebalancing, reviewing, changing and refreshing your portfolio allocation with time and your financial goals and circumstances.


At the End of the Game; the Mighty King and the Tiny Pawn Go Back in the Same Box: This is, perhaps, the most profound lesson of chess. At the end, we all go from where we came—dust. But our consciousness floats to the higher world and is directly positioned to the deeds which we have done. Although you may have worked hard throughout your life earning and preserving your wealth, that is not the thing which you will take with you when you, finally, move ahead from this world. Money is certainly not a permanent thing—that’s why it is called currency, i.e., it is just like electric current which moves from one point to another, from one house to another, from one person to another. Yes, it’s very important to achieve financial independence when you are alive but never forget the fact that money is not eternal and the thing which is not permanent can’t give you enduring happiness. So, earn money, reach the pinnacle of success, attain financial independence but always aim for a clean conscience.


To have the rewards that very few have, do the things that very few people are willing to do. Everyone wants to go to heaven but nobody wants to die. Everyone wants to achieve financial freedom but few really want to follow the principles and the path which leads to financial freedom. The most dangerous place is in your safety zone. The more you go to your limits, the more your limits will expand. All the very best in the New Year.


Source: Investment Lessons from Chess by Mehrab Irani, Moneylife Magazine

Date: 10th January 2018




The Goods and Services Tax (GST) – Archive

I just created an Archive on Demonetization – the so-called “surgical strike” on Black Money in India. There was another “masterstroke”, a “bold and massive reform” a “game changer”  since Demonetization – The Goods and Services Tax (GST). Everything that the current Government does is touted as a Game Changer (I wrote a blog on it). However, with GST the Government took hyperbole to another level. They called it as “India’s new Tryst with Destiny” and to mimic the original Tryst with Destiny (the one involving Nehru – hope you remember who that person was), the Government held a mid-night session to launch and celebrate GST.

I have been following the GST discussion/debate for some time new. Our IIM-A professor had briefly educated us on GST in early 2016. GST was not as controversial as Demonetization – there was a large consensus that GST as a concept is good. The devil was in detail. The implementation part of it. And since its hasty launch on 1st July 2017, GST is proving to be a nightmare – more worrisome than Demonetization. So I read and watched few good videos on GST.

I thought of creating another Archive for GST to keep track of all good material on GST. The list is not long as of now but it is very informative. Arvind Datar, a prominent lawyer, and author has extensively talked against GST and some of the key issues he spoke of are clearly evident now. He called GST as “the most terrible thing that will happen to the country

Do watch the first two talks by Arvind Datar on GST:

Arvind Datar on GST

A more detailed talk by Avinash Datar on the Constitution, Federalism and GST

A small primer on how GST is bad for small businesses

In Hindi – Overview of GST

In Hindi – Latest changes in GST (6th Oct 2017)

In Hindi – Ravish Kumar’s overview of GST






Demonetization – Archive

Yesterday (8th October 2017) we completed 11 months of #Demonetization; and now we are into the 12th month. We’ll complete 1 year of Demonetization on 8th November 2017 and there is bound to be a lot of debate on whether Demonetization was successful or not, and to what extent (and at what cost).

I have been following many discussions, debates and articles on Demonetization during last 11 months and have also blogged a few times. So I thought of creating a thread – an archive to start compiling all such links related to Demonetization at one place.

Will keep on adding to it and you are also welcome to contribute.

Blogs I wrote:

Magnitude of Demonetization

Demonetization and Fiscal Deficit

Interview with think tank behind Demonetization – Anil Bokil

One Month After Demonetization

Audio/Video on Demonetization:

My Professor at IIM-A Satish Deodhar discusses on Demonetization


Raghuram Rajan on Demonetization

Amartya Sen on Demonetization

Economist Arun Kumar on Demonetization (in Hindi)

Arun Kumar on Black Money and Black Economy (on backdrop of Demonetization)

Arun Kumar on Demonetization and Black Money

(Marathi) नोटाबंदी खरेच फसली का? अनिल बोकील यांची एक्स्क्लुझिव्ह मुलाखत

S Gurumurthy on Demonetization

Subramanian Swamy on Demonetization

P Chidambaram on Demonetization

Demonetization – A Cost-Benefit Analysis

Hindi – Ravish Kumar on Demonetization

Arun Shouri on Demonetization (in Nov 2016)

Arun Shouri on Demonetization (in Oct 2017)

Early View on Demonetization (in Nov 2016)

Raghav Bahl on Demonetization (Sep 2017) – through lens of Human Behavior rather than Economics/Finance

One of the best takes on Demonetization is by Morgan Stanley Investment Management’s Chief Global Strategist Ruchir Sharma where he called Demonetization as a misguided step.

Ruchir Sharma on Demonetization

Updated on 11th October 2017:

Yashwant Sinha on Demonetisation ‘Our worst fears have come true





Something interesting and something humorous on Stock Markets

In an interesting research paper, Michael Bar-Eli, et al, analysed 286 penalty kicks in top soccer leagues and championships worldwide. In a penalty kick, the ball takes approximately 0.2 seconds to reach the goal, leaving no time for the goalkeeper to see clearly the direction the ball is kicked. He has to decide whether to jump to one of the sides or to stay in the centre at about the same time as the kicker chooses where to direct the ball. About 80% of penalty kicks resulted in a goal being scored, which emphasizes the importance a penalty kick has to determine the outcome of a game.

Interestingly, the data revealed that the optimal strategy for the goalkeeper is to stay in the centre of the goal. However, almost always he jumped left or right. In short, goalkeepers choose action (jumping to one of the sides) rather than inaction (staying in the centre). If the goalkeeper stays in the centre and a goal is scored, it looks as if he did not do anything to stop the ball. The goalkeeper clearly feels lesser regret, and risk to his career, if he jumps on either side, even though it may result in a goal being scored.

Just like the goalkeeper, professional trader too feels compelled to play every trade that is out there in the market. In most cases either the event is already priced in or it just does not play out in line with the popular belief. Despite data proving that frequent trading might be counterproductive, the norm is always to act. Action seems to always triumph inaction.

So the next time you feel compelled to place a trade in the market, remember sitting around and doing nothing may just be a better option.

In short, just follow Charlie Munger’s advice:

And now something humorous!

P.S: I have a puzzle on the probability of Goalkeeper’s best strategy to defend goal post…will post it soon!


मराठी मोजमापे…

धान्य मोजण्याची मापं :

दोन नेळवी = एक कोळवे

दोन कोळवी = एक चिपटे

दोन चिपटी = एक मापटे

दोन मापटी = एक शेर

दोन शेर = एक अडशिरी

दोन अडशिर्‍या = एक पायली

सोळा पायल्या = एक मण

वीस मण = एक खंडी

चार शेर= एक पायली

आठ पायली= एक कुडव

आठ कुडव= एक गिध

वीस कुडव= एक खंडी.

एक शेर म्हणजे जवळपास ८५० ग्रॅम. एक पायली म्हणजे ४.५ कीलोला थोडे कमी भरते.

सोने-चांदी-औषध मोजण्याची मापं :

गुंज तुम्हाला माहीतच असेल. नसेल तर इथे पहा : गुंज

आठ गुंजा = एक मासा

बारा मासे = एक तोळा

अंक :

१ – एक

१० – दहा

१०० – शंभर

१००० – हजार

१०००० – दहा हजार

१००००० – लक्ष

१०००००० – दशलक्ष

१००००००० – कोटी

१०००००००० – दशकोटी

१००००००००० – अब्ज

१०००००००००० – खर्व

१००००००००००० – निखर्व

१०००००००००००० – महापद्म

१००००००००००००० – शंकू

१०००००००००००००० – जलधी

१००००००००००००००० – अन्त्य

१०००००००००००००००० – मध्य

१००००००००००००००००० – परार्ध

चलन :

तीन पै = एक पैसा

दोन पैसे = एक ढब्बू पैसा

दोन ढब्बू पैसे = एक आणा

दोन आणे = एक चवली

दोन चवल्या = एक पावली

दोन पावल्या = एक अधेली

दोन अधेल्या = एक रुपया

अंतर :

तीन फूट = एक यार्ड

१७६० यार्ड = एक मैल

दोन मैल = एक कोस

Pearls of Wisdom

Understand your Circle of Competence

Bertrand Russell in his essay “In Praise of Idleness” IMG_20170317_075535


Idi Amin might have said this explicitly but many other world leaders (democratic or otherwise) practice similar philosophy. They just don’t acknowledge – knowingly or unknowingly.
Multiple ways you can look at this. Either creativity is a con game (one can also create an elephant using same dots) or making sense or just chance event. However, it is definitely different than what experience produces (good or bad)
Found this on Twitter. Liked it a lot…
This is so true…and yet I cannot stop myself from refuting. May be some day I will… 
This is profound! Are we asking the right questions? Are we solving right problems?
Happy (belated) “Pi Day” – 14th March (3/14)
Common sense – and yet so difficult to grasp. Would you rather prefer to be a normal healthy person with all organs working properly, or a very powerful person with few disabled organs?


Interesting forwards on Valuation

I received a series of interesting forwards on Valuation of companies. It shows how markets reward future growth over the steady and stagnant growth.

Valuation, Jan 2017:

  • Snapchat: $25 billion
  • Viacom: $17 billion

Valuation, Jan 2014:

  • Viacom: $37 billion
  • Snapchat: $3 billion

Facebook valuation in 2007:

  • $15 billion (after Microsoft investment)

Facebook’s valuation in 2017:

  • $377 billion

Valuation – February 2017:

  • Ford: $49 billion
  • Tesla: $44 billion

Valuation – February 2012:

  • Ford: $49 billion
  • Tesla: $4 billion

2016 Revenue:

  • Google: $90 billion
  • Time Warner: $29 billion

2010 Revenue:

  • Google: $29 billion
  • Time Warner: $27 billion

Apple’s valuation in 2017:

  • $700 billion

Apple’s valuation when iPhone was unveiled in 2007:

  • $75 billion

Valuation, February 2017:

  • Amazon: $400 billion
  • Walmart: $210 billion

Valuation, February 2012:

  • Walmart: $202 billion
  • Amazon: $82 billion

Number of Google Employees: (Global Workforce*)

  • 2017: 72,053
  • 2011: 32,467
  • 2007: 16,805
  • 2005: 3,021
  • 1999: 8

*start of each year



Create a free website or blog at

Up ↑