This is a small blog about how we evolve as students. Firstly, the word student for me isn't about a person's age; a human always remains a student of life. I was one of the most hasty people you could have seen. I rushed into things, and lately, I have become the complete opposite of what I was. I now feel this urge to aim properly and then shoot. In the world of finance, no one is 100% correct in their analysis. That is what creates a healthy market of buyers and sellers. Even after making financial decisions, almost everyone is going to be wrong either on the upside or the downside. The fun part is not visualising if you won or lost; it is about learning. It is said that when Warren Buffett was hesitant about investing in a company called See's Candies because he thought it was overvalued, Charlie convinced him to pay up for that company. Berkshire bought it, and that investment, its earnings, and the learnings it brought about brands, resulted in Berkshire's investment in Coca-Cola. Warren, once, in an annual meeting or at an interview, was asked about how retail people should make investment decisions. What was said was commendable. He said that he advises young college graduates that when they graduate, they should have a punch card with 20 punches on it. And that's all the investment decisions they have to make over their entire life, and they would probably get very rich, and the reason for this is that they will think very hard about each of them. He would add, "You don't need twenty right decisions. 4-5 will probably do the job over time." He has said multiple times that only 12/400+ decisions he took as the Chairman of Berkshire actually moved the needle. External factors might also contribute to one's success; why discount the higher power? The 20 decisions exercise is the real fun part about investing. As I write this blog, I am evaluating a company. I can tell you that there is more than a 99.99% probability that I am wrong, either in a positive or negative way. But studying this business has helped me understand different aspects of qualitative analysis. Numbers are, in the age of AI, the easiest to analyse, but the quality and the strategy to address an investment opportunity is the fun part. As a university-going student of finance, looking to improve my resume, if I find it fairly valued, I will write about it on the value investor's club, and hopefully it will get published, but it is fun to learn. Even if I come to a conclusion that the business is not worth the price, the learnings stay.
Cheers to lifelong learning :)
Rutvik Thite
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