Fifty things that can pep up your life

Here is a list to pep up your life! It came as an anonymous forward on WhatsApp, but I felt like preserving it for posterity. Hence I am putting it up on the site. Each one of the points is a gem, hope you like it too. Do let me know which ones you liked the most.

1.       Have a firm handshake

2.       Look people in the eye

3.       Sing in the shower

4.       Own a great stereo system

5.       If in a fight, hit first and hit hard

6.       Keep secrets

7.       Never give up on anybody.  Miracles happen everyday

8.       Always accept an outstretched hand

9.       Be brave. Even if you're not, pretend to be. No one can tell the difference

10.   Whistle

11.   Avoid sarcastic remarks

12.   Choose your life's mate carefully. From this one decision will come 90 per cent of all your happiness or misery

13.   Make it a habit to do nice things for people who will never find out

14.   Lend only those books you never care to see again

15.   Never deprive someone of hope; it might be all that they have

16.   When playing games with children, let them win

17.   Give people a second chance, always

18.   Be romantic

19.   Become the most positive and enthusiastic person you know

20.   Loosen up. Relax. Except for rare life-and-death matters, nothing is as important as it first seems

21.   Don't allow the phone to interrupt important moments. It's there for your convenience, not the caller's

22.   Be a good loser for your loved ones

23.   Be a good winner of Hearts

24.   Think twice before burdening a friend with a secret

25.   When someone hugs you, let them be the first to let go

26.   Be modest. A lot was accomplished before you were born

27.   Keep it simple

28.   Beware of the person who has nothing to lose

29.   Don't burn bridges. You'll be surprised how many times you have to cross the same river

30.   Live your life so that your epitaph could read, “No Regrets”

31.   Be bold and courageous. When you look back on life, you'll regret the things you didn't do more than the ones you did

32.   Never waste an opportunity to tell someone you love them

33.   Remember no one makes it alone. Have a grateful heart and be quick to acknowledge those who helped you

34.   Take charge of your attitude. Don't let someone else choose it for you

35.   Visit friends and relatives when they are in hospital; you need only stay a few minutes

36.   Begin each day with some of your favorite music

37.   Once in a while, take the scenic route

38.   Forgive quickly. Life is short

39.   Answer the phone with enthusiasm and energy in your voice

40.   Keep a note pad and pencil on your bed-side table. Million-dollar ideas sometimes strike at 3 A.M

41.   Show respect for everyone who works for a living, regardless of how trivial their job

42.   Send your loved ones flowers. Think of a reason later

43.   Make someone's day by encouraging them

44.   Become someone's hero

45.   Marry only for love

46.   Count your blessings

47.   Compliment the meal when you're a guest in someone's home

48.   Waive at the children on a school bus

49.   Remember that 80 per cent of the success in any job is based on your ability to deal with people

50.   Don't expect life to be fair

The real truth behind long term investments

“Our favorite holding period is forever” – Warren Buffet

Financial advisors, fund managers, research analysts and other elites of the investing community always claim that ‘equities provide the highest return among all asset classes in the long run’. The pink press regularly dishes out data comparing long term returns from various assets classes, such as equities, gold, real estate, bank deposits and so on. Usually, stock market indices such as the BSE Sensex or NSE Nifty are used as proxies for returns from equities. Stories of successful “long term” investors such as Warren Buffet, serve as useful mascot to support these claims. The consensus currently, in the personal finance community, is that to create serious wealth, you need to invest in equities, and stay invested for the long term.

Rakesh Jhunjhunwala

Rakesh Jhunjhunwala is among India’s best known investors and needs no introduction to the investor community. Recently, I came across a study published by financial newspaper 'Mint'. The study analyzes 91 stock market investments of Mr. Jhunjhunwala in 84 companies (some companies were bought & sold more than once, hence the difference) over the last 10 years where he has held more than 1% stake at any point of time. Under extant regulations, investments above 1% of a company’s share capital are required to be disclosed to the stock exchanges, hence this is publicly available data.  Before we proceed, I urge you to read the full Mint article here.

The study finds that Mr. Jhunjhunwala’s “…average returns have been highest from stocks he held the longest”. The message for the lay investor, is that the longer you remain invested in a stock, higher your return. This argument is supported by a quote in the article, attributed to a professor from IIM, Kozhikode, “In the long run, stock markets in general have been seen to move in an upward direction. Therefore, the longer you hold on, the probability of superior returns is quite high” (emphasis mine).

However, this conclusion is not even half the story.

Behind every successful 'long term' investment are nine other not so long term investments

In fact, the Mint study finds that average holding period of Mr. Jhunjhunwala for these investments is just 3.44 years. In 26 out of the 91 investments (i.e. 29% of the time), Mr. Jhunjhunwala has exited the investment in less than one year. The article itself quotes a study of Warren Buffet’s investments, which found that “he held most of his stocks for approximately a year. He held his stake in only a fifth of his companies for at least two years.” Clearly, Buffet’s favorite holding period may be forever, but only 20% of his investments enter even the third year. This is quite at variance with the conventional image of these “long term” investors, who are thought to hold their investments for decades, not just years.

Even the market indices such as Sensex or Nifty that are used as proxy for the equity asset class are not static. Their composition changes frequently as some stocks are removed and others added. An article in The Hindu points out (click here) that between the period 2002 to 2012, the Sensex delivered a compounded annual return of 17%. Very attractive by all means, but during this period the index was reshuffled 18 times, with 26 of the 30 stocks replaced! I am sure if returns were calculated using the same stocks which existed at the start of the period, they would certainly not turn out to be as attractive.

Conclusion

The Mint article makes a reference to some of Mr. Jhunjhunwala’s best known investments (such as Titan, Lupin etc.) which he has held for decades. However, to state that these investments have provided best returns because they have been held the longest is to put the cart before the horse. The truth in fact, is the other way round.

These investments have been held the longest because they have provided the best returns.

The strategy of ruthlessly exiting mediocre investments quickly seems as much an integral part of Mr. Jhunjhunwala’s (or Warren Buffet’s) success as holding on to best for 10 years or longer. And the ability to differentiate between what to exit and what to hold on is what makes these investors stand apart from the rest. Not an easy act to follow. 

The Intolerance debate

Intolerance (n.) – unwillingness to accept views, beliefs or behavior that differ from one’s own

Over the past few weeks, a debate about rising “intolerance” has been raging in India. Several writers have returned awards citing “rising intolerance in India”. Talking to India Today TV, film actor Shah Rukh Khan has reportedly said, “There is intolerance, there is extreme intolerance… there is, I think…, there is growing intolerance”. More recently, actor Aamir Khan said that alarmed by recent events, his wife Kiran Rao has suggested that they should leave India. 

I find this whole issue utterly ridiculous.

Intolerance is a subjective term; it means different things to different people. Also, opinions always differ from person to person, and there is nothing wrong in different people having divergent opinions. Beyond a point therefore, the current debate on whether there is growing intolerance in the country or not is futile, it is never ending. Nobody claims that each and every one of 121 crore Indians are tolerant. Nor are all of them intolerant.

The slant in the current debate is that intolerance has increased after the new government came to power in May 2014. For example, Aamir Khan has reportedly said that “…the sense of insecurity and fear has been growing in the past six or eight months”. Coming from Aamir Khan, the statement is all the more surprising, since his film “PK” was considered to be hurtful to the religious sentiment of Hindus and was demanded to be banned by certain right wing organizations. However, the film was not only allowed to be released, but became one of the highest grossing Indian films of all times. 

The so-called “intolerance”, was nowhere on display, neither on the part of the government, nor on the part of majority of the viewers.

No intolerance on display - PK was a big hit

How we decide

On any such issue, a rational person should base his opinions & judgments on two primary sources:

1. Official data
2. Personal experience.

Sources such as newspapers, television are secondary sources and should never be made the primary basis of our opinion and judgment. They can best be used for confirmatory signals when they support what data and personal experience indicates. Secondary sources should be taken with a pinch of salt when they contradict data and personal experience. Further, even while using these secondary sources, care should be taken to differentiate facts from opinions.

Let us say, the TV anchor reports something like this:

“A person was killed because he was selling beef. There is growing intolerance in the country.”

In this,

1. A person was killed is a fact.
2. Because he was selling beef is the suspected motive. It may be proved or disproved after a full investigation is over.
3. There is growing intolerance in the country is a generalization which will need supporting data with a much larger sample size.

When we listen to such news, and form our opinions and judgments based on them, we must be conscious of what we are relying on. When I listen to the above news, I would give 100% weightage to point no. 1 above, 50% weightage to point no. 2 and zero weightage to point no. 3.

Where is the data?

The Home Ministry website has lot of statistics on the country’s crime. None of those who allege intolerance have provided any data to support their thesis. Note that even when data is present, it needs to be analyzed carefully, as raw numbers may prove existence of fact, but not causation. I have often seen that from the same set of numbers, different people draw different inferences. For example, economists differ on whether the economy is doing well, or poorly, though both sides refer to the same sets of data.

In the present debate, there is no data or survey which indicate how many attacks have been caused by this alleged “intolerance” and whether there is any substantial increase in them after the change of government at the Centre. Besides, let us also not forget that under the constitution, law and order is a state subject. We cannot blame Modi for riots in Gujarat while using a different yardstick for law and order problems in Assam, U.P. or West Bengal or elsewhere. The intolerance argument fails miserably against the “data” test.

Personal experience

My personal experience and observation does not corroborate the intolerance allegation. To the extent I see around myself at home, in office or in my neighborhood, behavior of the people, inter-personal and social relationships and attitudes towards others including towards people belonging to other religions are the same today as they were before May 2014. If your experience is any different, you are entitled to hold a different opinion.  But to me, the intolerance argument makes no sense. 

The only intolerance I see is an intolerance towards Modi.