Saturday Serendipity
Quote, Mental Model, Twitter Thread, Question to ask.
Before I start today, you might notice the name is different. I have now changed from weekly summary to Saturday serendipity’.Serendipity means finding something valuable when you never sought to. This newsletter for me is like that. I stumbled onto the idea of writing weekly as a thought but it is amazing how valuable it is to my life right now. I hope this newsletter adds the same value to you as readers as it does to me. This is why I have chosen this name. Also, it sounds cool ;).
Quote
"The first principle is that you must not fool yourself, and you are the easiest person to fool." - Richard Feynman
Mental Model
Herd Mentality: Why do high-IQ people fail? When this question was asked to Munger and Buffett one of the reasons they gave was that these high-IQ people blindly follow the crowd and it is surprising. In life to be successful being smart is not enough because behaviour is tricky. There is this wonderful story of two friends who go to a deep-frozen lake. Rahul wants to ice skate there and Rohan thinks it is too dangerous. Rahul does it regardless. Now looking at Rahul a few people join in. Now Rohan is hesitant but starts thinking that it is safe to ice skate. As time passes there are more and more people who join in and then Rahul taunts Rohan on how he is missing out on having fun. Rohan now decides to ice skate as he thinks it is safe. Funnily enough, as soon as he skates the ice cracks and everyone skating falls into the deep freezing lake. Now, a normal person reading this story knows that as more people skate on the ice the risk increases. The problem is we tend to feel safe being with the crowd. We think the crowd is right. So it is tricky to be in this type of situation but u have to avoid it. You have to be fearless and willing to stand out. In relation to the stock market also, many times people invest in a stock because everybody else is buying it and it is going up. Let me save you the trouble and tell you that you will lose money if you follow the crowd in the markets. For example, if you bought into Adani in these last few years because everyone is buying it and the prices are soaring. Now the point has come where the scam has been exposed and the prices are going down fast. So it is better to not have a herd mentality not only in investing but also in life.
Twitter Thread
Question to ask
Many times people don’t know their circle of competence well so this is a good question for that.
What do other people tell you you’re good at?
That’s it for this week. Hope you like the new name :)