I used to be going via a number of of my journal notes and got here throughout this thought from Nassim Taleb who defined the idea of “path dependence,” which is the dependence of outcomes on the trail of earlier outcomes, quite than merely on present circumstances –

Ironing your shirts then placing them within the washer produces a unique consequence from washing your shirts first, then ironing them. The reader can both belief me on this, or strive the experiment with each sequences on the following Sunday afternoon. Now, assume that your capital is round a million {dollars} and you might be concerned in hypothesis. Apply path dependence to the reasoning.Making 1,000,000 {dollars} first, then shedding it, is markedly completely different from shedding 1,000,000 {dollars} first then making it.

The primary path (make-lose) leaves you intact; the second (lose) makes you bankrupt, bancrupt, maimed, traumatized and extra typically unable to remain within the sport, thus unable to profit from the second a part of the sequence. There is no such thing as a make after the lose.

This observe from Taleb jogged my memory of Warren Buffett’s “Rule No. 1 – By no means LOSE cash.”

Think about a weak, fragile enterprise. It’s path-dependent. With stretched stability sheet, massive capital requirement, and insufficient capability to undergo, a chronic weak spot within the economic system can destroy it. It’s then troublesome for it to rise from that break. If you personal such a enterprise, you must do loads of praying to the economics gods. Such a enterprise begins from a “lose” and now it’s troublesome, nearly unattainable, for it to “make” again what it misplaced.

Alternatively, a strong and anti-fragile enterprise, with clear stability sheet and low capital requirement, which has constructed a capability to undergo over years, shouldn’t be path dependent. It could possibly survive a weak economic system. Even when the weak spot persists, at worst, it might lose what it has already made, which is best than beginning with shedding all of it.

So, take a look at what you already personal in your portfolio. Is it within the “make, then lose” class, or “lose, then lose every part” one?

Stick to the previous. Discard the latter.

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I’ve began work on a collection of quick movies to share my ideas round investing, resolution making, studying, and simply the apply of attempting to dwell a superb life. Have revealed the next 4 movies up to now, which you’ll watch on my YouTube channel –

This initiative has a twin function. One, to share my key classes across the above-mentioned concepts with you in byte-size format, and two, to assist me recover from my nervousness and shyness to talk in entrance of a digicam (and you’ll see from these movies how dangerous I’m at these!). I hope, over time, I’m able to ship on each of those fronts. 🙂

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As dad and mom, we frequently ask, then ask once more, and ask once more our children to do one thing we want they do. And if we’re fortunate, our children cooperate after the fourth or fifth request or after a loud however in any other case innocent scolding.

We complain that our children by no means hearken to us and ask different dad and mom how they get their youngsters to behave, eat wholesome meals, and fall asleep on time. If that’s not all, we seek the advice of the Web and a number of other books on mentioning well-cultured and disciplined kids. Then, whilst we apply all these methods, our children simply don’t pay attention.

However, amidst all this, there’s one thing we frequently fail to spot with our children. Even when they don’t seem to be listening to us, they’re busy observing us.

I’ve typically observed this with my youngsters. They’d typically not hearken to what I’ve to inform them. However they’d at all times be observing my actions. And that retains me on my toes, just because my youngsters are ‘watching’ me.

I discovered this thought reiterated on this fantastic e-book I’m studying for, possibly, the fifth time – Peter Bevelin’s All I Wish to Know is The place I’m Going to Die So I’ll By no means Go There. Right here is an excerpt from that e-book the place Warren Buffett and Charlie Munger, in dialog with a seeker of knowledge, share with him the perfect technique of coaching kids…

When you haven’t picked up this e-book, I counsel you do. It is going to be top-of-the-line investments in searching for knowledge you’ll ever make.

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Ryan Vacation writes about how Roman emperor Marcus Aurelius conquered stress, and the remainder of us can too –

By taking the time to journal and write, he was chipping away at his nervousness, simply as all of us can – within the morning, at night time, on our lunch break. Every time.

To calm his nervousness, Marcus was additionally continually attempting to get perspective. Typically he zoomed approach out. He meditated on his insignificance. “The infinity of previous and future gapes earlier than us,” he wrote, “a chasm whose depths we can’t see. So it could take an fool to really feel self-importance or misery.”

Different instances, he zoomed approach in, telling himself to take issues step-by-step, second by second. Nobody can cease you from that, he stated. Focus like a Roman, he stated, on what’s in entrance of you prefer it’s the very last thing you’re doing in your life.

Don’t fear about what’s occurred prior to now or what would possibly occur sooner or later.

This concept of being current is vital to overcoming our stress.

We are sometimes anxious due to what we worry will occur subsequent, or after what occurs subsequent. We fear about worst case eventualities. We dread potential obstacles. However Marcus, from Epictetus, knew that “Man shouldn’t be nervous by actual issues a lot as by his imagined anxieties about actual issues.”

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That’s about it from me for in the present day.

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With respect,
— Vishal