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Module Units
- 1. Introduction
- 2. Investment In Yourself
- 3. Become A Learning Machine
- 4. Obtain Worldly Wisdom
- 5. Harnessing The Power Of Passion
- 6. The Importance Of Choosing The Right Role Models
- 7. Humility Is The Gateway To Attaining Wisdom
- 8. The Virtues Of Philanthropy And Good Karma
- 9. Simplicity Is The Ultimate Sophistication
- 10. Achieving Financial Independence
- 11. Living Life According To The Inner Scorecard
- 12. Delayed Gratification
- 13. Building Earning Power
- 14. Investing Between The Lines
- 15. Decision-Making
- 16. Checklist For The Standard Causes Of Human Misjudgment
- 17. Journaling
- 18. Power Of Incentives
- 19. Avoid Physics Envy
- 20. Intelligent Investing
- 21. The Three Most Important Words In Investing
- 22. Investing Is All About Capital Cycle
- 23. Analyzing Special Situations
- 24. The Holy Grail Of Long-Term Investing
- 25. Connecting The Dots
- 26. Market Is Not Efficient All Time
- 27. The Dynamic Art Of Portfolio Management
- 28. To Finish First, You Must First Finish
- 29. Read More History And Fewer Forecasts
- 30. Updating Your Beliefs In Light of New Evidence
- 31. Opportunity Costs
- 32. Pattern Recognition
- 33. Role of Luck, Chance, Serendipity, And Randomness
- 34. Value Investor
- 35. Conclusion
Pattern Recognition
Investors who primarily rely on screening tools to generate ideas end up missing such opportunities. If the leading stocks are falling sharply even after reporting solid earnings or going up even after bad earnings, the market is trying to tell you something important.
Fear of the unknown is one of the most potent kinds of fear, and the natural reaction is to get as far away as possible from what is feared. Unknown make most of us withdraw from the game. These, however, are also the circumstances in which extraordinary returns are possible.
Based on the author's personal investing experiences over the years, He had found that buying a good company in a significant sector is better than buying a great company in a bad sector.
The author advises to not fight the trends, especially the long-term, inevitable ones.
In other words, invest in companies with tailwinds, not headwinds.
The author uses his portfolio holdings to demonstrate this important investing principle:
- Aavas Financiers, CreditAccess Grameen, Bandhan Bank, AU Small Finance Bank, and Ujjivan Small Finance Bank are examples of India's secular growth in the housing finance, microfinance, and private banking industries.
- Vinati Organics: a gradual shift in chemical manufacturing away from China and toward India.
- Long-term structural urbanisation and financialization of savings in India: PSP Projects, HDFC Life, and HDFC Asset Management Company.
- The Food and Agriculture Organization of the United Nations has planned to spend $7.6 billion over the next 15 years to eradicate PPR disease: Hester Biosciences.
- Bajaj Finance, Dixon Technologies, and SBI Cards are examples of secular growth in aspirational India's discretionary consumption.
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