Chander Chawla retweeted
Finance has four simple rules: maintain a clear mind, figure out asymmetries, detect circularities, and never talk to idiots.
Chander Chawla retweeted
Charlie Munger passed away one year ago today.
His final interview with @BeckyQuick — filmed two weeks before his death — is one of my all-time favorites. kingswell.io/p/charlie-munge…
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“God knows where the world is headed. I just think that one way or another, the world muddles through.”
- Charlie Munger
Chander Chawla retweeted
Tracking where 3,067 startups incorporated in 2018 are now (as of end of 2023).
About half are no longer in business, 5% got acquired, 0.2% IPO - and the rest scattered across the VC fundraising stages.
Gives a sense of the dropoff at each level of the venture journey
Chander Chawla retweeted
“The iron prescription: every time you think some person, or some unfairness is ruining your life, it is you who are ruining your life.”
- Charlie Munger
Chander Chawla retweeted
Warren Buffett in a nutshell
H/T @Vivek_Investor
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About 15 years ago, Jim Simons was driving to Boston to give a speech at his alma mater, MIT. He had retired a year before. He was 72 years old.
He was, at the time, the most successful hedge fund manager of all time.
His wife was with him, and she asked if he was going to mention the guiding values that made him successful.
At first, he thought, “I don’t know that I have any.”
Upon reflection, he wrote down five principles that are as pithy as they are profound.
-Don’t Run with The Pack
-Hire the Smartest People
-Don’t Give Up Easily
-Be Guided by Beauty
-Hope For Good Luck!
Simons arrived at his list organically after building his business. It doesn’t feel artificial. It’s not derived from some acronym. It reflects what worked for him over the course of a remarkable life.
Simons died yesterday at the age of 86. His career consisted of following one passion to the next. It wasn’t a succession of five-year plans. It was ten-year building blocks stacked one on the other.
After Simons graduated with his PhD, he worked as a code breaker for the government during the Cold War. He was fired for publicly voicing opposition to the Vietnam War. Next, he spent a decade running the math department at Stony Brook University.
At about 40, his life took a serious left turn. Simmons became so interested in markets and convinced he could build a better system that he quit his prestigious, steady job to trade stocks in an office over a strip mall.
DON’T RUN WITH THE PACK
Having never worked in the financial industry, he proceeded to hire a group of physicists and astronomers to build something new, a quant trading firm.
HIRE THE SMARTEST PEOPLE
He spent 10 years building a trading platform based on data that didn’t work that well until all of a sudden it did. It became a flywheel that minted money.
DON’T GIVE UP EASILY
He built the most successful financial firm in history without hiring anyone from Wall Street. He regarded doing something really well, whether it’s a mathematical equation or managing a business, as a form of art.
BE GUIDED BY BEAUTY
The Medallion Fund, launched in 1988, went on to return 66% a year and generate more than $100 billion in trading profits.
HOPE FOR GOOD LUCK
Simon’s professional life roughly broke down like this:
–10 years getting a PhD and working as a cryptologist and doing math.
–10 years heading the math department at Stony Brook University
–10 years struggling to build a trading algorithm
–10 years minting money from the trading algorithm
–10 years running a foundation to fund basic science
–10 years being “retired”.
He was never celebrity famous like Warren Buffet. He didn’t tweet principles like Ray Dalio. He didn’t buy a sports team like Steve Cohen. He was well known for his habit of not wearing socks and chain-smoking cigarettes.
Simons rarely gave interviews. There are perhaps a dozen videos of him on the Internet from the past two decades. They are all worth watching.
One is a 90-minute chalkboard presentation of a complex geometry problem he solved called the Chern-Simons theory.
It will disabuse you of any illusion that you could have done what he did.
Click here to watch: youtube.com/watch?v=8VipIKLg…
Simons’ success lay in combining his mathematical prowess and insights with a passion to build and inspire teams of people.
In the MIT speech, he lays out his recipe: “Great people. Great infrastructure. Open environment. Get everyone compensated roughly based on the overall performance… That made a lot of money.”
Gregory Zuckerman wrote the definitive book on Simons called The Man Who Solved the Market.
Simons didn’t want it written.
Later, he said its “pretty good.”
Ironically, it probably did more than anything to cement his reputation as the world’s best performing hedge fund manager.
If you enjoyed this piece, consider subscribing to my newsletter here: surfacearea.beehiiv.com/
Chander Chawla retweeted
Entrepreneurial Pivots..
John Patterson - Coal to Cash Registers
Cornelius Vanderbilt - Steamships to Railways
Bernard Arnault - Property Developer to Luxury Brands
Ron Shaich - Bakery to Fast Casual Restaurant
Andy Grove - Memory Chips to Microprocessors
Macon Brock - Toy Stores to Dollar Shops
Jack Taylor - Car Sales/Leasing to Car Rentals
Who else?
Chander Chawla retweeted
Favorite: To see if a book is real, ask 10 pple of different backgrounds & professions to summarize it. If the summaries are similar, the book will not survive as it can be shortened to a journal article. The more the summaries diverge, the higher the dimensionality of the book.
Nassim Taleb spends 30 hours every week reading books.
Here are 27 reading tips from @nntaleb:
1) The minute I was bored with a book or a subject I moved to another one, instead of giving up on reading altogether.
2) The trick is to be bored with a specific book, rather than with the act of reading.
3) A good book gets better at the second reading. A great book at the third. Any book not worth rereading isn’t worth reading.
4) I follow the Lindy effect as a guide in selecting what to read: books that have been around for ten years will be around for ten more; books that have been around for two millennia should be around for quite a bit of time, and so forth.
5) The reading of a single text twice is more profitable than reading two different things once.
6) A private library is not an ego-boosting appendage but a research tool.
7) Read books are far less valuable than unread ones. The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market allows you to put there.
8) Drink old wine. Read old books. Keep old friends.
9) Read nothing from the past one hundred years.
10) Never read a book that can be adequately summarized.
11) Never read a book you would not reread.
12) No book that can be shortened survives.
13) Books that endure don't look like good books; they are almost always very poorly written, but address fundamental topics.
14) What matters for a book is depth and relevance, which is extremely rare. Plus internal, not external coherence. Books that have them don't need the cosmetic shit.
15) When a risk taker writes a book, read it. In the case of Peter Thiel, read it twice.
16) Keep the book. Easier to remember contents just by looking at it. Often not even necessary to consult notes.
17) I don't remember what I learned in class. I remember much of what I read on my own.
18) To become a scholar, spend decades reading 30-40 h/week.
19) You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menacingly. Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary.
20) I don’t read newspapers. I don’t watch television. I’m not on Facebook. I don’t care for the social networks. I’m on Twitter, but I use it only as a means to an end. I read books.
21) Books are not read by the majority because they read the Internet, which is like junk food for the mind.
22) The unread books on your shelf are like a universe of alternate possibilities waiting to be explored.
23) I divide my spirits into two categories: those I read for the pleasure of reading and those I read for the pleasure of rereading.
24) To see if a book is real, ask 10 people of different backgrounds & professions to summarize it. If the summaries are similar, the book will not survive as it can be shortened to a journal article.
The more the summaries diverge, the higher the dimensionality of the book.
25) If you want to study classical values such as courage or learn about stoicism, don’t necessarily look for classicists. One is never a career academic without a reason. Read the texts themselves: Seneca, Caesar, or Marcus Aurelius, when possible. Or read commentators on the classics who were doers themselves, such as Montaigne—people who at some point had some skin in the game, then retired to write books. Avoid the intermediary, when possible.
26) Criticism, for a book, is a truthful, unfaked badge of attention, signaling that it is not boring; and boring is the only very bad thing for a book. Consider the Ayn Rand phenomenon: her books Atlas Shrugged and The Fountainhead have been read for more than half a century by millions of people, in spite of, or most likely thanks to, brutally nasty reviews and attempts to discredit her.
27) A novel you like resembles a friend. You read it and reread it, getting to know it better. Like a friend, you accept it the way it is; you do not judge it.
Chander Chawla retweeted
Fight The Fade ...
'Increasing Returns' by Michael Mauboussin
[chuffed to get a mention in the references .. thanks @mjmauboussin 🙏 ]
Five Forms of Increasing Returns by @mjmauboussin
1) Economies of Scale
2) International Trade
3) Learning by Doing
4) Positive Feedback/Network Effects
5) Recombination of Ideas
Source: morganstanley.com/im/publica…
Chander Chawla retweeted
10 Mental Models that will help you to make better decisions
1. First Principle Thinking
Rethink problems from the ground up by separating underlying facts from assumptions.
Chander Chawla retweeted
One of the most profitable models is what Charlie Munger calls the 'Cancer Surgery Strategy.'
The set-up involves a company with multiple lines of business. One is the crown jewel — growing, capital-light, and free-cash-flow generative. The other is troubled or mediocre. The lousy business obscures the good, soaking up its free cash flow and weighing down the parent company's valuation multiple. The strategy is to buy these companies and surgically remove the lousy business.
Munger discussed it in his 1994 speech A Lesson on Elementary Worldly Wisdom:
"GEICO is a very interesting model. It's another one of the 100 or so models you ought to have in your head. I've had many friends in the sick business fix-up game over a long lifetime. And they practically all use the following formula—I call it the cancer surgery formula:
They look at this mess. And they figure out if there's anything sound left that can live on its own if they cut away everything else. And if they find anything sound, they just cut away everything else. Of course, if that doesn't work, they liquidate the business. But it frequently does work.
And GEICO had a perfectly magnificent business submerged in a mess, but still working. Misled by success, GEICO had done some foolish things. They got to thinking that, because they were making a lot of money, they knew everything. And they suffered huge losses.
All they had to do was to cut out all the folly and go back to the perfectly wonderful business that was lying there. And when you think about it, that's a very simple model. And it's repeated over and over again.
And, in GEICO's case, think about all the money we passively made. It was a wonderful business combined with a bunch of foolishness that could easily be cut out. And people were coming in who were temperamentally and intellectually designed, so they were going to cut it out. That is a model you want to look for."
💥🤌👌
Chander Chawla retweeted
Well written and worthwhile:
Nassim Nicholas Taleb, the anti-confidence man thespectator.com/topic/nassi…
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I'm thrilled to announce that @HelloTherma has successfully closed our $19M Series A round! Thank you to our amazing team and investors for helping us get to this milestone. Here's to building a cleaner and cooler future! 🙏🏽🚀🌎 #cleantech #climatetech #cleanenergy
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Chander Chawla retweeted
Quantum Field Theory for Dummies:
piggsboson.medium.com/quantu…
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Monkeypox: What to know?
Some of the most relevant information is summarized here:
worldhealthnetwork.global/mo…
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2) Of near-contemporaries with mental clarity: Warren Buffett, Charlie Munger, E Thorp, B Mandelbrot, S Wolfram, R Feynman, pple w/a complete grasp of their subject matter; can effortlessly spot something out of line when others drown in details, verbalisms, & procedures.
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Charlie Munger on money managers' high fees: "That people are charging for skill while they’re offering closet index returns is ridiculous. The world is mildly ridiculous." #BRK2022 #warrenbuffett
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"It's the most ridiculous criticism I ever heard" #BerkshireHathaway Vice Chairman Charlie Munger on a proposal that would force Warren Buffett to give up his role as Chairman
#BRK2022 #CharlieMunger #WarrenBuffett























