I was listening to the Hidden Forces podcast (which is usually a great listen) with Sony Kapoor. And there was this part at the start that really struck a chord with me, where Sony talks a bit about the hubris of his youth and how as an older man he sees the world in a more less certain and nuanced way.

Anyway, I think it's a message worth internalising for us as investors. Here's the relevant section:

I started out, as many do, as a rather cocksure and overconfident young man — very quantitatively focused, convinced I understood how the world worked. I didn’t yet appreciate the subtleties, the complexities, and the nuances of life. At 20, if I’m honest, I probably sounded dismissive, even arrogant, about things like art, music, history, anthropology, and cultural studies — the so-called “softer” subjects.

But the older I’ve gotten, and perhaps a little wiser too, the more the world has humbled me. The more I’ve seen, the more I’ve realised how much I don’t know. Meeting truly smart people has only deepened that sense. I’ve grown less certain about things and more appreciative of shades of grey. Life, I’ve learned, rarely fits neatly into black and white categories, and pretending otherwise often leads us astray.

In some ways, I’ve swung to the opposite extreme. While I still have the skills to dive into equations and quantitative analysis, I don’t particularly enjoy doing so anymore. Even in my work on climate, I’ve come to recognise the limits of purely data-driven approaches. The world is not, and never will be, governed entirely by neat, deterministic formulas.

In fact, I think one of the biggest risks we face today is becoming too reliant on data, algorithms, and AI — losing touch with the messiness of reality, our humanity, and the uncertainty that defines real life. Numbers can illuminate, but they can’t capture everything that matters.

That, in a sense, sums me up.

You can listen to the episode here

Happy boxing day everyone!

Just listened to a good podcast on shares verses property as an investment. This is first time I have heard it laid down in such an objective manner with a worked example. There is a lot more to consider than I realised. Worth a listen to maintain a balanced bigger picture on these two investing classes.

The podcast is called Investopoly and episode is 336:How much growth do you need for property to outperform shares?

Listen here for apple podcasts or here on youtube.

I have recently been listening to Total Money Management.

Highly recommend a holiday listen for anyone with some time off and a beer in hand. Particularly episodes since the US election.

its all a bit samesy as they talk about US stock valuation relative to history, CAPE ratio and a general vibe of “get out get out get out” but very engaging and informative. All the narrative in markets atm is “ AI, trump, the US in 75% of global market cap and relative value” however as that narrative changes so will the podcast.

They also do a week in review document with some very illustrative graphs which the podcast then speaks to as you go.

For @Strawman, and probably everyone else they have two deep dives into stocks vs property and another on the Australian property problem which I have now listened to twice each.

Would love to see some reflections and takeaways/ counterarguments to the themes in the podcast to generate some chat.

Happy holidays everyone.

I listened to an old episode of "invest like the best" podcast with Aswath Damodaran. Below are my notes and key takeaways for those interested.

• There are two types of inflation for companies: detrimental inflation, which cannot be predicted, and predictable inflation that can be passed on to consumers. The best approach for companies is to make their products less discretionary by adopting models like subscriptions or introducing consumable needs.
• ROIC (Return on Invested Capital) can be easily manipulated by companies and is nearly meaningless for early-stage growing companies. It should only be considered as one part of many factors when evaluating investments.
• Companies that focus on their cost of capital or decide to alter their cost structures are likely past their best days and becoming mature. While they may still be good investments, they are less likely to achieve extraordinary results.
• A company must be able to convey a consistent vision for the future. If the story keeps changing, it loses credibility and is assigned less value. Understanding the narrative that drives a company is vital, going beyond just ratios and numbers. Our investment decisions should be based on our own story, not someone else's. Once you have your story (it will always be wrong), but you can use your story to come up with a value to attribute to that company based on the outcomes of your story. Numbers and metrics are not the source of edge on the market, everyone has access to these, there is no edge in this. You need to know what your edge is and stick to it.
• The right price is crucial when considering an investment. Any company can be a good or terrible investment depending on the price paid for it.
• Investing is based on assumptions, but we should strive to minimize assumptions and make them realistic with a margin of safety when valuing a company. While the valuation will never be exact, this approach narrows the margin of error.
• Seeking alpha (market-beating returns) should not come at the expense of increased risk. It is better to achieve consistent alpha with less risk than to take outsized bets on riskier investments.
• Recognize the role of luck in investing and be mindful of skill and luck in both rising and falling markets. Learn from your performance, regardless of the outcome.
• Study businesses, not just investors. While we can learn from different investors, understanding various businesses is essential to becoming a good investor.
• Avoid letting recent history overly influence your forecasts. Use historical data to gain perspective when evaluating companies and trends.
• Be open-minded to critiques and alternate views about a business. Assess new information rationally and be willing to admit when you are wrong, as those are the most valuable words in investing. Don’t be afraid to say the three most valuable words in investing "i was wrong".