Centurian way to a Successful Life
Charlie Munger on What you should not do to have a fairly sucessful life?
Simple Few Points Summary
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Top 5 companies in USA by Market capitalization
1. Apple
2. Microsoft
3. Amazon
4. Alphabet (Google)
5. Facebook
They constitute 20% of the total S&P 500.
They are also 42% of the total market of NASDAQ.
From 23Mar2020 low of 18592, Dow Jones is at 26672 as on 17July2020 (Up by 43%)
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Gold vs Sensex - Surprise Winner is Gold
In the last 15 years from 1Mar05 to 25Jan20, Gold returns in INR terms stand at 13.3% CAGR as against Sensex returns at 13.2% CAGR for the same period.
Considering the yearly returns, Gold has outperformed Sensex in 8 years out of the last 15 financial years.
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Power of Compounding
Box Office Collections CY2019
Avengers: Endgame = 366
War = 318
Kabir Singh = 278
Uri - The Surgical Strike = 244
Bharat = 209
Housefull 4 = 206
Good Newwz = 201
Mission Mangal = 200
Total Dhamaal = 154
Kesari = 153
Chhichhore = 150
The Lion King = 150
Dabangg 3 = 150
Saaho = 149
Super 30 = 146
Dream Girl = 140
Gully Boy = 139
Bala = 116
De De Pyaar De = 102
Putting Growth Into Perspective
1) Usually, companies that grow are usually more valuable than companies that don’t.
2) In the case of a company that earns below its cost of capital: The faster it grows, the lesser it’s worth.
3) Companies that earn more than its cost of capital, create value.
Rewarding Shareholders
Shareholders reward come from
"Dividends and Capital Gains"
Capital Gains = Sale - Purchase
Selling can be done through
exchange, buyback, open offer, delisting
Buying can be done through
exchange, IPO, rights issues, OFS
What is Free Cash Flow?
It is simply the money available with management to do one of the following:
1) Buy back stocks
2) Pay down debt
3) Acquire other business
4) Pay Dividends
This is one of the very important parameter of investing.
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A sustainable fall in interest rate?
The interest rates in India are declining consistently due to lower inflation domestically and globally.
This brings opportunity for entrepreneurs whose capital cost will come down but may create problems for investors seeking fixed returns.
Predicting with consistency? Give up please
From 1945 to 1991, the US economy went through nine recessions. How many investors would have predicted even some of them with any degree of consistency.
"Forecaster may tell you a great deal about the forecaster; they tell you nothing about the future" -WB
Demand-Supply bearing on stock prices
The prices of companies in stock market more often get affected by the demand vs supply as against it fundamentals in the near term.
As an example, today Bandhan Bank rose by 20% on news of it being included in the MSCI Index.
Fact-based worldview
Though the world faced huge challenges, we have made tremendous progress. However, it is the overdramatic worldview that draws people to the most dramatic and negative answers to fact questions. Peolpe constantly and intuitively refer to their worldview when thinking, guessing or learning about the world. So if your worldview is wrong, then you will systemnatically make wrong guesses.
Overdramatic worldview is so difficult to shift because it comes from the very way our brains work.
- Factfulness
World Population
Population Across Time Periods
Year 1800: 100 cr
Year 1930: 200 cr
Year 2030: 800 cr (est)
It took 11800 years for the population to reach 100 crores. However, from year 1800, in less than 200 years, population would have crossed 750 crores
Highest Rate Cuts by RBI in 10 Years
RBI has further cut Repo rate for the 5th time in CY2019 and cumulative rate cut of 135 bps (1.35%). It is certainly a relief for the borrower but depositors may have to explore other options as Real rate of interest is very low.
Efficiency From Technology
HDFC Bank grew its revenues from Rs 60000 crores in FY16 to nearly Rs 100000 crores in FY19. A jump of nearly 60%.
But, the number of employees of the bank remained nearly the same.
Why? Adaptation of techonology and improvement of processes
Is the money in bank intact?
Checking bank account balance is a global phenomenon. This behaviour may be prevalent as people want to periodically reassure that their money is safe. With the advent of tele & mobile banking along with ease of internet, this has become even more impulsive.
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Top 10 oldest Stock Exchange In The World
1. The Amsterdam Stock Exchange, 1602
2. Paris Stock Exchange,1724
3. Philadelphia Stock Exchange, 1790
4. London Stock Exchange, 1801
5. Milan Stock Exchange, 1808
6. New York Stock Exchange, 1817
7. Frankfurt Stock Exchange, 1820
8. Madrid Stock Exchange, 1831
9. Toronto Stock Exchange, 1861
10. Bombay Stock Exchange, 1875
World Pin Code 1-1-1-4
The world population in 2017 is said to be distributed as:
Americas = 1 billion
Europe = 1 billion
Africa = 1 billion
Asia = 4 billion
Top Box Office Collections CY2018
Sanju = 343 crores
Padmaavat = 302 crores
Simmba = 240 crores
Robot 2.0 = 190 crores
Race 3 = 170 crores
Bagghi 2 = 166 corers
Thugs of Hindustan = 146 corers
Stree = 130 corers
Raazi = 124 corers
Gold = 110 corers
Sonu ke titu ki sweety = 109 corers
Raid = 103 corers
Andhadhun = 100 corers
Education, Mothers & Mortality
It is not doctors and hospital beds that save children lives in low income countries. Beds and doctors are easy to count. Politicians love to inaugurate buildings. But almost all the increased child survival is achieved through preventive measure outside hospitals by local nurses, midwives, and well educated parents. Espcially literate mothers.
- Factfulness
What is DIPAM?
Department of Investment and Public Asset Management (Dipam) to carry out strategic sales of public sector units (PSUs)
We will keep hearing the word Dipam in media for the next 3-5 years as government looks to be taking some serious actions in terms of selling partial or full stake in some PSU.
