Learning from Marva Collins

Imagine yourself as a 10th grader. You received your mid-term exam results. You scored 10 out of 100 in Mathematics. Your math teacher calls you an idiot in front of everyone as you flunked the test. Your classmates make fun of you by calling you dumb. You go home unhappy and show the test results…

Accounting For Value – 2

In the previous post we learnt about the pitfalls of using P/E ratios and the limitations of using DCF. Buffett owners earnings fixed most of the shortcomings. In this post we will learn about valuing a company using residual earnings. 1. Residual Earnings The fictitious Company A given below has a book value per share of…

Accounting For Value – 1

To be a successful investor you need to know two things – How to Value a Business, and How to Think About Market Prices. Buffett wrote about this in his 1996 letter to shareholders. To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better…

How to Read an Annual Report

Few years back I read a masterpiece from Shai Simonson on How to Read Mathematics. In order to read mathematics effectively he tells that we should follow a reading protocol, which is a set of strategies that a reader must use in order to benefit completely from the text. I would highly recommend you to read…

The Brain That Changes Itself

Frederick had a massive stroke when he was in his mother’s womb and his entire left side of the body was affected. He could not crawl nor walk and could not talk until he was three years old. An MRI scan revealed that 25% of his brain was dead. He made some progress using conventional…

Learning From Benjamin Franklin

It is very important to have the right role models in life. It does not matter if they are living or dead. Sometimes it can be a fictional character like Sherlock Holmes. All that matters is to have one. Charlie Munger once told that I am a biography nut myself, and I think when you’re…

100 to 1 in the stock market

One of the best ways to learn any domain deeply is to look at the actions of the experts in that domain and clone it. Cloning is not blind copying but instead it is rediscovering the reasons behind those actions and learning from it. This way we increase our odds of becoming an expert one…