My Favorite Books On Investing

Charlie Munger, Vice-Chairman of Berkshire Hathaway, developed his latticework of mental models by reading three leading textbooks on each subject. We can use the same approach for getting better at long term investing in marketable securities. But instead of three, there are twelve books that every investor should read and reread. I have read these…

Accounting For Stock Compensation

So far I wrote about accounting for debt, leases and taxes. You can find them all here. Companies pay its employees using cash and stocks. All cash payments made to employees are shown as expenses in the income statement. But when it comes to stock compensation things are not that straightforward. Companies pay its employees using restricted stocks and stock options…

Google

Tom Monahan, a creativity consultant, who teaches a different kind of thinking called 180-degree-thinking. In this, he asks participants to come up with ideas that don’t work – an oven that can’t cook, a car that doesn’t move. What is the rational behind this? But the goal of such exercises is not necessarily to generate…

Amazon

During 1970s, a sixth grade student, was working on modeling a device for his science project. He called this device, an infinity cube, which creates an optical illusion of an endless tunnel. He modeled this device after one he had seen in the store. What is so special about this device? The one in the store…

Accounting For Taxes

So far I wrote about accounting for long-term debt and leases. You can find them here and here. In this post I will be writing about accounting for taxes. In US, every company maintains two sets of books. One of them is prepared according to the GAAP rules which are read by investors, creditors, and…

Pat Dorsey’s Moats Mindmapped

Few months back I mind mapped Charlie Munger’s psychology of human misjudgment. You can take a look at it here. Mind maps are really powerful as it organizes information visually and it aids the associative nature of human brain. In this post I have mind mapped four different types of moats which Pat Dorsey talks about…

Accounting For Leases

In the previous post we learnt how to do accounting for long-term debt. In this post I will be writing about accounting for leases. A lease is a rental agreement by which one party (the lessor) transfers to another party (the lessee) the right to use an asset for a stated period of time in return for…