Things read - Week 04 - 2025

Things read - Week 04 - 2025
Clouds seen from the Mysore Expressway

Rajeev Thakkar on general finance

A brake makes the car go faster. Many people redeemed their equity at low valuations due to the Covid crash because they lacked liquid funds. If they had some, they could’ve deployed it or avoided liquidating at such poor valuations. He advises, like any sane person to have adequate emergency fund, and health insurance before dipping toes in the financial markets.

He also advised to not turn a blind eye towards fixed income sources like RBI floating rate bonds (8% in 2024) because in the long run, it is plain stupid to expect equity returns to be more than 12%. China, a country that has grow by leaps and bounds hasn't generated more than 1% annualized returns (inflation adjusted) since 1993 to 2023.

Also, GDP growth has lesser corelation with the equity markets. Gave an example 1990s, when air traffic was opened up for private players. Spend increased, GDP was boosted but air carriers never achieved profit due to high competition, operational cost and pricing pressures. So, good GDP growth doesn't always lead to good corporate profits.

The averages are misleading. Someone suggesting the average depth of the river is 3ft, won't help in crossing you the river.

The entire video is worth watching for his nuggets of wisdom. [Link]

The Scout Mindset

Picked up this new book by Juila Galef. It is supposed to teach me to see things as they are and not as you wish they were. It talks about soldier mindset and scout mindset. People don't want to see the reality as they are because they think it would be an hinderance to their goals. Soldier mindset helps us in maintaining our beliefs that boost our self esteem, gives us comfort and the greatest of all – helps us feel we belong to a group.

When we want something to be true, we ask: "Can I believe this?", unknowingly searching for a reason to belive it. When we don't want something to be true, we ask: "Must I believe it?", searching for a reason to discard it. [Link]

About cats

I recently picked up another book – Priestdaddy – just to enjoy some humor and came across this description about how a character in her story thinks about cat:

My father despises cats. He believes them to be Democrats. He considers them to be little mean hillary clintons covered all over with feminist legfur. Cats would have abortions, if given half a chance. Cats would have abortions for fun. Consequently our own soft sinner, a soulful snowshoe named Alice, will stay shut in the bedroom upstairs, padding back and forth on cashmere paws, campaigning for equal pay, educating me about my reproductive options, and generally plotting the downfall of all men.

[Link]