Category Archives: Adaptability

Ensemble

Posted on by
Reply

Amidst the…

…frenzy…

…of reels, posts, communications, reports, research and what have yous…

…concerning the ongoing image battle of AI vs Core IT…

…it is extremely difficult to keep one’s head and vision clear.

What does the future look like?

A flurry of multitudinous pathways emerging does not mean utopia yet.

Forward outlook, especially a lucrative one, is not about exclusion.

Coming on to the scene with an attitude of trampling everyone else out of the scene – is this sustainable?

No.

Going into the future with partnership?

Yes. Sustainable. Let’s look around. Who’s forming partnerships?

Core IT. Yes. The impulse to continue to thrive is a strong one.

AI? (Yes). No. No. Unsure. No. Yes. No.

The frenzy that results after having spent obscene sums with steady revenue streams only developing since recently is so frantic and haphazard, that one’s left hand sometimes doesn’t know what the right hand is doing.

Pulling at the same string in the same direction will maximize revenue stream.

Hostile attacks at Core IT, every few days a new one, is not the way forward.

Is this a case of ‘as the leader does so do the subjects act’? A kind of a concerted strategy? To stomp on everyone’s heads and declare oneself king.

King?

Perhaps for a day.

Long-term market leadership requires craft.

Craft comes from years of honing.

Speak track record.

Who has this?

Core IT.

AI has at max what? Capability. Not craft. For craft, one needs to grind.

New kids will need to work as an ensemble within business infrastructures.

Not without.

Within.

Inclusion is in.

Exclusion is out.

Boo to exclusion.

Imagine a scenario…

…when Core IT comes out with something…

…much…

…much…

…cheaper.

Even in that scenario, it will choose to include. That’s why it’s made money for five decades back to back.

Remember that word.

Inclusion.

Staring Facts in the Face

Posted on by
Reply

Mongerers…

…are very, very busy.

After all, the target is in a corner.

Why not strike massively, and keep striking?

Punish the vanquished multiple times per misdemeanour.

Unfortunately, Core IT has gone quiet.

They’ve stopped caring about their share price.

Focus is now on intrinsic growth, not on quarter to quarter looking good attitude.

Pushed to the wall, the instinct to survive and regain lost ground is on all fours.

Forget about all this, is the aggressor AI actually so capable as to completely substitute the need for Core IT with regard to enterprise level programming, already?

No.

Perhaps in a year?

No.

5 years.

No.

10 years?

Possibly not.

20 years?

Possibly yes.

And, look at the mass reaction.

Masses believe they are ready to take over, like, yesterday.

Then comes the black box introduction.

AI companies are offering a black box to corporates, which will be their in-house AI, all data stays at home, let’s all bypass Core IT.

Does the data stay in the black box? Does it go anywhere? Does anybody know?

No.

Where is the trust coming from?

A bank entrusting its internal data to a black box, the big four doing the same, doctor’s records, hmmmm, not adding up. To a human under non-disclosure agreement? Plausible.

Departments being trained in corporates to become the tech arm?

It’s like an additional wing being added to a hospital, to handle book-keeping. Use the wing for expanding the hospital? What a preposterous idea! Let’s all become jack of all trades. Why even bother specializing. For that we have AI, right, to handle the specialist surgeries?

Panics almost always take to ridiculous trajectories.

This one has now cracked open genuinely clean-balance-sheeted free-cashflow-generating companies. Who have decided to take on all blows without responding. Probably want their CMPs to hit three digits and then some before announcing anything. They seem to have forgotten what buybacks are.

With nothing to go on, where do you stand, regarding Core IT?

Clean balance sheets.

Zero debt.

Track record of navigating through disruption.

Free cash flow being generated year upon year.

That’s enough.

Two choices.

Hold on to your holdings and look elsewhere currently, for investing.

Add on, as in average down.

Depends upon your risk profile, which option you choose.

Liquidation, for me, is not an option, given this :

Clean balance sheets.

Zero debt.

Track record of navigating through disruption.

Free cash flow being generated year upon year.

What am I doing?

Till lately I was averaging down.

Recently, I stopped averaging down in Core Tech. That’s a change in trajectory. Ya, have been investing elsewhere recently. Going to hold Core IT through, and accumulate further only above my buying averages for Core IT stocks. The exact change that’s happened is that now I need these stocks to speak out with their deeds and propel themselves to above my buying averages, before buying more. Might not happen soon. That’s fine. The reasons for comfort in holding are these :

Clean balance sheets.

Zero debt.

Track record of navigating through disruption.

Free cash flow being generated year upon year.

As long as these reasons exist, holding beyond while focusing elsewhere is the change that’s happened at Magic Bull.

Why, you ask? Why a change from the staunch attitude earlier?

It’s a matter of being in tune with one’s risk-profile. Till it wasn’t speaking up, I was comfortable averaging down. When it started to be bewildered by the goings on, I changed to being comfortable holding.

It’s ok. One can’t have the right opinion all the time. For a while, one can be wrong also. In those times that one feels one can be wrong also, making the switch from averaging down to only holding is ok, provided these exist :

Clean balance sheets.

Zero debt.

Track record of navigating through disruption.

Free cash flow being generated year upon year.

A Tale of Two Worlds

Posted on by
Reply

Like the plus…

…to the minus…

…and day to night, …

…like forwards to backwards, …

…like North to South, …

…so is…

…investing to trading…

…or trading to investing…

…spin it any way around, like you’d like to.

These two worlds have their own tales, and, you guessed it, each is…

…diametrically opposite to the other.

In the one, you average down. In the other, you pyramid.

In the one, you buy low. Ideally, you don’t sell for a long time, and when you do, you sell high.

In the other, you buy high and sell higher, or sell low and buy back lower, ideally sooner than later.

In the one, you welcome notional losses in high conviction bets, so you can put in more at lower cost.

In the other, you abhor the sight of notional losses, and cut these beyond small thresholds.

In the one you are not glued to the screen, and can even choose to operate completely from after hours.

In the other, especially while taking big positions, significant screen-time is important.

In the one, you have time for other things in life, many other things.

In the other, perhaps not as many.

In the one, emotional and nervous overhang can be reasonably manageable with lifestyle and mental training.

In the other, management and mental training required is tougher.

One could go on.

That’s not the point though.

What do we take from this?

We want something concrete.

There’s a potent and vital point where the two worlds meet.

Let’s say you engage in the one world.

You then need the other – one way or another.

How?

Let’s say you are a trader.

You need to divert some profits to long-term holds, to build wealth, to secure yourself and your family.

Let’s say, on the other hand, you are a long-term investor.

Where does the world of trading fit in, for you?

To control your gambler’s instinct.

To not allow passage to your repeated inclination towards opening up your long-term portfolio, again and again.

Trading gets your trigger-happiness out of the way.

You tire mentally.

Perhaps take a few small losses. Wins are a small bonus.

Bottomline is, you don’t open your long-term portfolio to fiddle with it, unnecessarily. That action is grounded by a rule imposed by you yourself. Once a week. Once a month. Half-yearly. Annually. Whatever suits. At that time, open, fiddle, rearrange, do what you wish, but then close till next window. In the meantime, satisfy your need for action with some mild trading.

Even better if your small trading operation only shorts the market.

With that, you’d automatically be hedging your long-term portfolio.

Elegant.

Symmetrical.

Purposeful.

For a long-term portfolio in a growth market, …

…very…

…winning.

Only Misses for the DoomNixers

Posted on by
Reply

Stadiums full.

This is what we see at the FIFA World Cup.

Gloom and doom about no one travelling to watch…

…seems to be nixed.

Are any doomsdayers amounting to anything?

AI taking over and slaying all else?

It’s a collab. No one’s taking over anything completely.

US markets were supposed to crash…

…like yesterday. And with that, the world.

Whenever a full blown crash does happen, it will very probably be at a time when most shorters are exhausted, read in big losses and retired hurt, didn’t want to use the word bankrupt.

AI is supposed to lead the ‘bubble burst’.

Has AI just smelt some monetization in collab with the back-offices of the world?

Back-offices have the capability to hold the system up on the back of their picks and shovels work, which, obviously, DoomNixers ‘nix’ themselves upon. You see, it’s not glamorous enough. They didn’t see it at all thus, and stumbled and fell.

Here’s another one : No one can beat the effthurteefiive. True? Hmmm. We saw what we saw.

Attackers felt they would bring the opponent down over the weekend. Opponents, fighting for their lives, seem to have emerged better than their attackers.

When one fights for one’s life, one fights with every ounce of resource and every joule of energy.

The Dean at his Univ advised Max Planck to study Music instead of Physics, since he felt that every meaningful thing in Physics had been discovered already.

Max Planck went on to found a whole new branch of sciences. Quantum Physics. On which anything and everything today is based.

There’s this thing about optimists. They believe in their systems, their hard work. Their ability to fight for their lives. For their systems. For the passing on of their legacies.

Max Planck fought for the entire field of Physics, and what a legacy he’s passed on. Conventional Physics builds the framework, and Quantum allows us to traverse the Universe.

Core Tech is fighting for its life. Pushed to the wall, it will devise a way to emerge, as a monetizing handholder for AI to be implemented. It’s fought for its life many times before and has emerged victorious, and very lucratively.

There are two paths emerging here, in the example with Core Tech.

Path one – DoomNix. Pronounce it dead. Invest elsewhere, with expensive valuations.

Path two – research. Find companies that are transforming with the times, with clean balance sheets and free cashflows. Invest in these, as valuations are very reasonable currently.

One can even follow both paths MINUS the doomnixing. Meaning that one takes punts in expensive companies, no idea how that will pan out in the very long-term, and one also invests in very reasonably priced and transforming Core Tech, with clean balance sheets and free cashflows. This will give a decent return in the very long-term.

We leave the doomnixing to the pessimists, nay-sayers, lacking-in-hopers, non-believers in themselves and in good systems – this breed will keep collecting misses in life.

Having expunged the breed from our eco-systems, we stride ahead with our very long-term bullish view in our growth market, since the essence of sitting on a compounding portfolio for multiple decades is…

…an optimist mindset.

Miss Giving

Posted on by
Reply

There’s no Hurray…

…yet…

…on the Street.

People have…

…doubts.

About anything…

…even everything.

The general public seems to be containing its enthusiasm, because who knows what might be around the corner.

Owing to the cast in the mix, like Diabolo TryMeButDon’tTryTooHard, and the opponents, who, well, have championed in sins committed, and who perhaps have now been overtaken in sins committed by Diabolo TryNotTooHard and ally NotMuchYoohooThere, …

…a cease-fire…

…could mean anything…

…but a cease-fire…

…as of now.

Enthusiasm will flow once certainty replaces misgivings.

Hesitancy to come out and fully invest, given the circs, allows us future opportunity.

At every small insinuation of an anomaly, reversals will follow.

Diabolo’s back and forth penduluming on everything, for a good while now, has capped the risk appetite of the masses.

Fine. We accept the circumstances as those which will allow repeated entries over the short-term, perhaps over the short to medium term also.

The Magic Bull approach here would be to enter with whatever there is to enter, …

…over the next three to four months.

Who knows when Miss Giving will turn into Miss NotGiving. More sooner than later. Since the penduluming has gotten on everyone’s nerves now, reactions are not under control owing to nerves, and masses might come out that much harder once it becomes clear that the peace-flag persists.

Cut to our ongoing discussion on full exposure preferred in a growth market over dilly-dallying or semi-exposure over the long run.

As far as our own microcap market vis à vis world market cap is concerned, entry more sooner than later is a thing.

As time will tell, …

…a big thing.

Fable me this

Posted on by
Reply

Fable…

…we’re being told about…

…Fable 5…

…is that Frontier Country has disallowed its usage…

…for non-Frontier Countries or semi-Frontier Countries.

Thing is, …

…not every country needs to be a Frontier Country to make the world go round.

There’s a front-end, fine, accepted, and it seems to be calling the shots. To the extent of over-estimation of its own capabilities. Over-reaching. Over-stretching. Over-everything. That’s the front end. They’re doing what a front-end would do, in its position, and perhaps more.

However, there’s a back-end to everything in the world. Some countries are great at being back-offices to the world. Please understand, that the front-end can’t function long-term without cowork with the back-end.

Back-end streamlines.

It monetizes.

It affords the front-end penetration.

Infrastructure-seepage.

Bridging of the getting used to gap.

Bridging of the trust gap.

Process pinpointing.

To lever to becoming an accepted norm, front-end needs back-end, forever, since remaining the norm is also a priority.

The episode with Fable 5…

…reeks strongly of something big back-firing…

…in the front-end’s thought process.

They came sweeping in, full of over-confidence that they had something which would wipe everything else out.

Caused havoc.

Meanwhile, back-end started to adapt. FAST.

Some four months into the storm, fronties realize that backies have the usage figured out, and are implementing so fast, that very, very soon, their numbers promise to be fab.

Panic.

What to do?

Deny the backies usage of the frontest-end, i.e. Fable 5. Lest they overtake us in looking good.

Ha.

Just gave yourself away.

We know you now. WE SEE YOU.

And we’re going to use this dawning realization to our benefit.

We’re holding the line.

Our back-end is rock-strong, highly adaptive, and will find a way to monetize any situation.

Anything you throw…

…at us. We…

…will…

…monetize.

We’re just doubling down in our own back-yard.

On our own horses.

Period.

I want to be that fool

Posted on by
Reply

You know…

…the bloke who gets called out…

…at social gatherings…

…as the fool who got fully in at the top?

In a long-term growth market, I don’t mind being that fool.

It’s a short-term affliction. I think I can…

…bear looking like a fool for a not-longish duration.

Why do I say short-term?

First up, that’s my estimation of my tolerance levels.

Never happened, so it’s all estimates we function with.

Then, field of action is a long-term growth market, remember?

Here, we risk not being exposed to growth and compounding, if we’re conservative in entry.

No one’s saying get rid of your small entry quantum.

However, do let your small entry quantum expand with portfolio-size.

Also, make more entries.

Till fully invested.

In a long-term growth market, we wish to be fully invested, more sooner than later.

What’s the risk?

Growth…

…is NOT…

…a linear entity.

If we understand this one sentence, we can stay invested. Sit. For the very long term.

Thing about growth is, it happens, and then it does not, and then there’s a crash, and then it suddenly resumes, and then it can fire back to back doubling, or 50%+ for three years in a row, or what have you. Non-linear entities have peculiar equations defining them, not linear ones.

So it can well happen, again all hypothetical, that we get in fully, with precaution, with a small entry quantum, with many entries, over 12 months, and right after that, Wham. Down it goes, big. Ya, we look like fools then. We’re called out at parties. People laugh. It’s not necessarily a ‘serve him right laugh’ but more a ‘relief laugh’, as in ‘thank God I’m not in such a position’. And that’s OK.

Why?

Ya, Nath, why so cool about the whole thing?

Will tell you why.

In a year’s time after such hypothetical crash, when the market has sunk some more, people don’t know whether to laugh at or cry for us. There are feelings of pity, and questions like ‘Are you ok?’ crop up. Just doing a simulation. Picked up the ‘Are you ok?’ from a recent smaller crash, because that exchange actually happened. These situations are also absolutely ok. Why?

Things are about to change.

Long-term growth market, remember?

Growth not a linear entity, remember? When it sets in, can happen very fast, before one has gotten significant money in.

We are fully exposed, remember?

What do you think happens to our folios? In another year, we could not only cover up, but be up 2x. In five we could be up 5x. In 10, we could be up 12x. In 20, perhaps 25x. No longer foolish.

Those who don’t get in, miss the growth market.

Others get in to some extent, and catch growth to some extent.

Fools get both extremes, …

…the looking foolish one, and…

…the long-term vindication one.

Lumpsum vs Piecemeal

Posted on by
Reply

What’s a…

…better…

…market entry?

Lumpsum, or piecemeal?

Since I function in a growth market, …

…which can be seen as a microcap vis à vis the world, …

(you guessed it, India, currently exhibiting value, …

…but for our discussion please treat it as a growth market,) …

…and, because this discussion makes the most sense for a growth market exactly, …

…please, therefore, treat this comparison as a tool to help you decide…

…your growth market entry strategy.

You come into a lumpsum, let’s say.

What are your options? For the investible portion that is.

Pump in – one shot?

Average down, bit by bit, as and when opportunities arise?

Two ends of the spectrum. Where do you stand? Let’s break it down.

What’s your capacity for drawdowns?

Can you take a 50% notional drawdown, and not have a sleepless night?

Yes? Sure? Ok, pump it into the long-term growth market in one shot, provided you know your stocks well enough. In ten years time you’ll look like a star. In three months, a fool. One year, bigger fool. Perhaps. Slowly, growth will show, …

…and compound.

In two decades, you’ll rule.

Not able to take the big drawdown? Don’t like looking like a short-term fool?

That’s ok.

Very few people can handle big drawdowns.

Even lesser individuals like looking like fools, even if for a short time.

Then you can go in bit by bit.

Two strategies.

If you know your stocks well, you can average down.

If you want the market to throw you winners, you can average up.

Disadvantages?

Sure. You aren’t subjected to big drawdown pangs, and aren’t chastised by the masses for investing on interim highs. In lieu of that, not all of your money is in, and thus, not all of it is exposed to growth, or for that matter compounding. Also, your money hangs around to be…

…spent.

Don’t like the downsides of either extreme?

There’s a way out for you. You can take the middle path. You can also decide for yourself how ‘middle’ it is.

Decide for yourself a time-period that you want to be in by. 3 months? 6 months, 9 months, 12 months? Longer will take you towards full-on piecemeal.

Decide also, for yourself, about averaging down, up, or down till a level, and from that point onwards, only up. You can say that you are for example going in to a stock with margin of safety, up to a level, but then you would like the stock to prove itself, and from that point onwards, you now start averaging up as the growth story unfolds. You can then couple your averaging down and up combo to your total time-frame selected for going in.

Bottom-line : in X months your funds start getting full growth and compounding effects, as per the cost-averaging mix Y you have chosen.

Both X & Y should be a function of your risk profile.

Isn’t that the reason why you chose the middle path, because you didn’t want to be exposed to lumpsum drawdowns?

So, three choices, break it down, follow what suits.

On a personal front, if money needs to go into a growth market, for me its better sooner than later.

Took a long time to realize this though.

My pursuit for financial independence was impeding this understanding.

The moment financial independence was achieved, along with it came the realization…

…that we don’t wait on a long-term growth market.

Decoupling X.Y

Posted on by
Reply

We’ve…

…had many conversations…

…on the topic of decoupling.

So much so, that I’ve lost count.

The only difference, this time around…

…is the approach.

This time around, we’re handling from centre-point.

Meaning…

…that we are the ones…

…learning how to…

…decouple.

This time it’s not about economies decoupling from other economies…

…or markets decoupling from other markets.

We don’t even care anymore whether that is a myth or…

…whatever.

What economies do to or with each other is not our concern in this discussion.

Here, we are devising methodologies to reconfigure our nervous system, …

…actually, our very DNA, …

…so that we can decouple from market forces, at will, for however long we want to.

Without feeling pangs.

Two questions – How? Why?

Regarding the why, it’s imperative to allow our nerves rest.

Long-term survival. We’re not going to implode, or explode.

It’s about building patterns. This is the how we are addressing. Patterns. Many times. Patterns that take us away from markets, temporarily.

Slowly the pattern comes on auto. We devise a mental and a physical macro for the pattern.

An activity hiatus.

A terminal kill switch activation, with reactivation date.

Family.

Book.

Holiday.

Hobby.

Different…

…work.

Anything that’s not market related. At will, till wilful reactivation.

Again and again, whenever we feel the need, and / or whenever the situation demands.

Over many years, we now have an ingrained reflex. A muscle memory. Allowing us at will, to…

…decouple.

Welcome to Decoupling X.Y.

Define your X and Y. Incorporate into your system. And then…

…decouple at will.

Life at Frontier Minus One

Posted on by
Reply

Sanity prevails…

…at frontier minus one.

Rat race is within the underlying’s…

control.

Virtual / quasi / substantial / semi debt-free-ness…

exists.

Free cash-flow generation on the balance sheet is…

…common.

At frontier minus one, the narrative is …

…under control…

…as proven by self-determination of speed of change…

…and by exhibition of substantial growth.

Not at breakneck speeds.

Not by borrowing to the hilt.

Not by greedy behaviour.

Not by indigestible trajectory.

Not by a reckless ‘not giving a damn too bad if you’re not so fast’ attitude.

Life at frontier minus one…

…is somewhat balanced, with a flow.

Innovation at frontier minus one is achieved much faster

…than at frontier minus two, but much slower than at…

…frontier zero zero.

No tech company that wishes to thrive well into the future is currently functioning at…

…frontier minus two.

Either the transition to minus one has been made, or, it’s in the process.

Why not go for the jugular? Straight to zero zero.

Everyone has their role in this puzzle.

Imagine an older civilization going into battle.

There was a front line, paving the way, at immense cost.

There was a reserve support line, with artillery, first-aid, communication, and what have you.

There was a third line with supply, reinforcements, semi-trainees doing other stuff normally, etc.

There was aerial support, naval support, intelligence, research and analysis staff etc.

All combined to create an ensemble of actions.

Cut to now.

Warfare has changed.

Immense cost is still there, but immense cost to the front line, as in cost of life, has been reduced greatly, speak drone and missile warfare, supported by AI backed intelligence and analysis.

Point is, innovation, a different way of thinking, disruption and all their cousins will find a way to make things affordable, implementable.

That’s the way civilizations move forward.

Not for you or me to change. It’s the way of the world.

And that is what frontier minus one banks upon.

Meaning, to keep functioning at sustainable levels, slowly, painstakingly, in the process, simultaneously, finding a way, a connect, to frontier zero zero.

The connect can be of co-work. Amicable. Win-Win. You earn, we earn.

At frontier minus one, the world view is not to annihilate, but to…

…accommodate.

To win…

…together…

…in…

symbiosis.

Symbiosis

Posted on by
Reply

Imagine…

…the most value you can imagine.

That’s what this word is worth.

Especially now.

What’s the truth?

Existential question.

First we had everyone and their aunties proclaim the death of core Tech companies.

Hmmm.

Core Tech companies, and their chief protagonists, thought otherwise.

Number of believers kept waning though.

Until recently.

Something started to reverse in belief systems.

AI was behaving fantastically utilitarian with a human holding the reins.

Meaning, there needed to be a human there, for practical purposes.

Frontier AI deployed engineers to be the human face. Or so one was told.

Came the trust issue.

Do we double up on our trust in this no track record magician who just showed up out of nowhere?

Do we entrust privileged client data to the unknown?

Do we strip ourselves naked, TWICE?

NO.

Everyone and their uncles have answered with an emphatic NO.

Who is the human handler – the go-between – the trusted face – the rein holder?

Someone with a track record.

Proven.

Tried, and…

trusted.

Self-propelling.

With no liabilities. Spell ZERO DEBT.

With copious FREE CASH FLOW to INNOVATE FREELY…

…to navigate the reins successfully and as per the requirements of an enterprise.

Who is this entity?

None other than…

…our own very well known…

CORE TECH.

Leaner.

Hungry to prove its point.

To have its raison d’être acknowledged, and paid for.

To earn and compound steadily.

Forget about dying. Let’s talk about long term thriving.

Then, we had the captains of frontier AI admitting, that yes, ‘we do need core tech handholding to be implemented successfully’.

Gone was the initial hubris, that ‘we had come to wipe out old thought patterns, and all old systems’.

Reality had dawned, and these captains at least had the decency to admit it.

Actually, they had realized that their existence now depended upon how much their infrastructure would seep through. And…

…that no one was trusting them enough to hand over the job of seeping through to them, but much rather, to trusted old compatriots, to Core Tech.

So they came forward to shake hands.

Good.

Symbiosis.

We want to move forward on the back of this symbiosis.

There will be gigantic and fast development on the back of this symbiosis.

We are looking at space travel, space colonization, disease control, climate change, cheap solar, cheap desalination, perhaps even alien integration and partnership – unimaginable perhaps a few months ago, but possibly conceivable on the back of this symbiosis.

There’s new talk which has recently emerged, from the other extreme, and needs to be discarded, like its mirror image on the opposite side of the bell curve. This is the talk of frontier AI dying out because of becoming unaffordable.

Well, in whatever shape it exists currently, frontier AI does have tremendous capacity to solve problems.

Let it do just that on the back of this symbiosis, and earnings will start to flow.

Core Tech won’t let it wither, frontier AI has now become their raison d’être too.

Don’t you see it?

Two universes are converging, each needing the other to survive.

In the end, they become one universe.

Companies will merge. Synergies will multiply. Mega projects will be achieved, faster, more bombastically.

Earnings will flow.

Where do you want to be?

Remaining a doomsdayer will not help you.

Get into the flow.

Invest into debt-free, free cash-flow generating core tech as value deepens.

Look for debt-free, frontier minus one, free cash-flow generating semi AI companies, research these thoroughly for any red flags, and if those found are manageable, put in some funds.

If you find a frontier tech with manageable debt and a reasonable balance sheet, with a PEG ratio (price to earnings ratio divided by earnings per share growth percentage for the fiscal) somewhat under control. ok, put in some money there too.

Get out of the doomsday mindset.

Put your money to work, and then lock it in for another twenty years. Leave the compounded proceeds to your children.

Now.

Let the crashes come. There will be compounding post crashes too. Just look at the monthly chart of an IT index from 1995 to today. Dot-com peak looks miniscule and low compared to the levels of the monthly chart today.

Enough talking. Do the recce and then let’s talk.

Mantra

Posted on by
Reply

Hey.

Writing became a breeze.

Posting a blog from inside Claude, keeping the originality of the post, whilst assigning to AI all mechanical tasks like feeding in categories and tags – I’ll admit, this does make life a lot easier, and blogging a lot more enjoyable.

Which keeps the admissions coming in continuation, perhaps repeatedly.

From being the leading AI skeptic, towards gravitating to some kind of a chief protagonist – people who know me would probably say, “There he goes again.”

So what’s this going to do?

The number of blog posts is going to increase. Hopefully, the quality too. Primarily, the enjoyment while blogging.

Beneficial. We thereby move towards the realm of Planet 2.0.

Wunderkind AI needs to benefit mankind to the max.

What about the risk?

Opening up to the Wunderkind, allowances, permissions, sometimes an odd password shared.

Does the AI take these towards Planet 3.0?

Yeah, that’s the one on which mankind is harmed.

Skeptics are still on 1.0, exactly where I was 11 days ago.

Idea is to make a conscious effort to gravitate towards 2.0, every time there’s a drift towards 3.0.

Remember, we will tend to drift.

Drifting got us here in the first place. One can use fancy words for it, like disruption.

There’s a quick trick which makes us aware from where we are functioning, 2.0 or 3.0?

Greed. Hubris. Exuberance. Ego burgeons. 3.0 functionality.

Feeling of benevolence while functioning, well-being and / or goodness emerging – 2.0 domain.

Natural human drift towards 3.0.

Bring back consciously towards 2.0.

That’s the Mantra, going forward.

Check

Posted on by
Reply

Hey.

Facing some basic issues on the other side.

Life has changed.

Race became more intense.

There’s greed in the equation, the desire to achieve as much as possible in as little time as possible.

Everything’s moving…

…faster.

As if…

…from one day to the next…

one just…

…shifted.

It’s clear to me that we don’t shift till we are ready.

Was a hard nut to crack.

Had to be literally goaded into the AI trajectory, several coaxings required. Hard skepticism took its time to be broken down.

Not happy about the greed.

Speed of coasting is also very high.

Need attunement.

Unable to slow down easily.

Need to be careful about a ‘now I’ve got this and to hell with you attitude’. Can develop unchecked.

Addiction. Need to stay de-addicted.

All non-electronic activities in the day go up immensely in value.

Reading – books. Check.

Chanting. Check.

Basic verbal conversations. Check.

Human interactions. Check.

Helping someone. Charity. Check.

Non-distracted eating. Check.

Bringing down multi-tasking levels. Check.

Whole detox days. Day travel. StayCation. AutoCut the system. Check.

Evening chanting session. Lengthen. It’s not electronic. Check.

Anything not connected to a device and creates value. Check.

Not going to fall sick in this hyperactive space.

Check.

Incorporating before proceeding further.

Check.

Waking Up On The Other Side

Posted on by
Reply

Hey,

First up, humbled. To the nth.

Was an AI skeptic till, like, yesterday.

Well, skeptic tried, and died, the skeptic did.

What woke up was armed 25x and on steroids.

That’s me now, after 9 days of intense work on Claude.

Encouraged to try by friends and compatriots, initiated into entry, took the plunge.

There’s a chronic buzz in this dimension. This is an electronic world. Just got more…

…robotic. It’s just that the robot is invisible.

It’s like fighting a matrix war from inside a digital maniacal super-intelligent tool who knows…

…everything.

Who can connect dots…

…exponentially and asymptotically, both simultaneously.

Red flag list is at an all time high.

Sleep’s off.

Mind races all the time.

There’s some exuberance that’s come to the fore.

Don’t want to speak much.

Need solitude.

Basic life disturbs.

Withdrawal symptoms away from screen.

Welcome to the planet 3.0.

What happened to 2.0 ?

Wasn’t that supposed to be the shifted one, towards doing good for mankind?

Want it back.

Need to get to 2.0.

What is 2.0?

A controlled version of 3.0, using its tools only, not being ruled by it. Doing good for mankind.

Need to create a 2.0 out of 3.0.

Fast.

Cluster of Blessings

Posted on by
Reply

Hey.

We realized…

…that what we’re doing…

…is anti-fragile in nature.

How, you ask.

Since what we’re doing is in stocks. Equity. Robust at best. Not anti-fragile.

?

Well, take a definition, and expand it a bit, and the definition starts to make broader sense. One draws on the definition, and creates a utility for that definition in one’s own line of work. That’s what we’ve done. Creator of the term anti-fragile, Mr. Taleb, could turn around and say, hey, you’ve just taken my thing and used it in your thing. Of course we’ve done that. We stand on the shoulders of giants, giants like Mr. Taleb. And now we’ve got his thing, projecting onto our thing, making something new out of our thing. Bottomline, we have a thing that is anti-fragile, and Taleb gets credit for his thing starting to develop universality, at least across another asset class.

So how are we doing stocks in an anti-fragile manner?

We benefit from chaos, volatility, uncertainty, fear and the like.

How?

Before these conditions cause mayhem in stocks, we have gravitated, in a growth market, over the years, to exhibit meaningful holding power. Both mentally, and financially. So, what do we possess before topsy turvy conditions, like now? Holding power.

What else are we armed with?

Liquidity.

Liquidity is a state of mind. Our state of mind causes us to be liquid at the right time.

Next.

We have…

…high conviction. In a basket of market players. Our due diligence regimen, over decades, has allowed us the means to recognize such stocks. In these, we have developed what?

High conviction.

We are itching to buy these underlyings, at huge…

…margins of safety.

Cut to current conditions. Chaos, volatility, uncertainty, fear, war, maniac, missiles, nuclear threat and what have you.

The margin of safety that we look for starts to abound. We accumulate high conviction underlyings, over multiple buys, ending up with low buying averages.

As conditions amplify, buying averages get lower. We are benefiting from chaotic conditions in that our buying averages are getting lower and lower.

Perceptions change for the better. They always do. Gone is 1929, where it took the better part of two decades for circumstances to change. Till 2019, one used to talk about max 15 to 18 months being the length of a bear market. Information flows very fast. When efficient, whenever that is, markets are then super-efficient. Factoring in is taking days, perhaps only a day. A change in perception is incorporating very, very fast. Frankly, we’re talking months, not even years. And, we’re mentally and financially prepared, with our holding power, for a time-frame measured in years.

Comes the turnaround. Sooner than later, such are the times.

Our low buying averages multiply fast. In fact, very fast. The lower they are, in our high conviction holdings, the faster they multiply. We start to hold many 2-baggers in 3 to 6 months, for example.

Now we call the shots. In fact, our very low buying averages do.

We can choose to pull our principal out, full 100%, at 2x, 3x, 4x, 5x or what have you, depending on our muse.

The moment we go cost-free, we have moved into 100% margin of safety. Nothing can break our cost-free-ness (except ourselves). We can choose to leave our cost-free-ness to our children, by which time it will have majorly compounded. Since we have no principal invested in our cost-free-ness, we won’t be in a hurry to liquidate it. In fact, we won’t even be looking at it.

We’re calling our low buying averages anti-fragile. The lower they get, the more anti-fragile they behave in the aftermath of chaos. We’re adding an allowance towards fast incorporation of change in perception to the definition of anti-fragile, because of which our inherently anti-fragile low buying averages get to benefit from their anti-fragile nature (thanks again to Nassim Nicholas Taleb for giving us the framework of anti-fragility).

And what are we calling our cost-free-ness? I mean, it is seeming to be beyond fragility. It is giving benefit beyond any scale. Generational benefit. I don’t have a name for this effect, yet.

Our cost-free-ness has generated generational well-being. It has allowed us to not liquidate it, by the state of mind it has caused in us. It has allowed itself to be passed on.

Hmmm. Taking a phrase from Nichiren Buddhism, it is our…

…cluster of blessings…

…that we pass on…

…to the next generation.

Basics Baby

Posted on by
Reply

In the…

…ongoing…

…and incoming…

…frenzy…

…there’s only one go-to strategy…

…for me.

Basics…

…always.

During CoViD, during which everything was supposed to go bankrupt, one stuck to the ‘Basics, Always’ approach, and the rest became History.

This, today, has the potential to become a CoViD like crash.

First up, there’s been mass AI hypnosis. Everyone and their Aunties are in the loop and are talking AI. No one cares anymore about companies with great fundamentals and a penchant cum track record for metamorphosis. It’s ok. We do, since that’s what counts for a steady, long-term return in the market. We are not greedy. We wish to put away our money safely, not let inflation eat at it, and we would like it to grow over the next twenty to thirty odd years. We’re balanced. We’re basic. We’re simple. We’re the opposite of complicated and sophisticated.

And now, there’s all out war. Provoked. Just to bury Epstein consequences? All pipelines choked. Gold-nugget question being asked in this moment is…

…how should one act?

Should one get swept into the AI madness and buy into abysmally high PE multiples? Infinite PE multiples? Should one buy international stocks? Gold? Bitcoin? Silver? Sit in cash? WHAT?

Answer in such scenarios is SIMPLE, always.

Basics. Baby.

Basics, always.

Basics to the rescue.

What are your basics? Go back to them.

I’ll tell you my basics. I’ve gone back to them since I started buying, February 6th onwards. And I shall remain with them, till I’ve finished buying, or till I’m fully invested, whichever comes first.

Shareholder-friendly managements.

Companies with clean balance sheets.

Companies with zero or quasi-zero long-term debt.

Free cashflow to market cap upwards of 2% for large- and mid-caps, and upwards of 1% for small-caps.

Companies with multi-decade penchants and track-records for / of successful metamorphosis and navigation through disruption.

Margin of safety. Each high-conviction buy lowers average. Mathematics to support buying and selling. A low average has the capacity to quickly give a multiple in better times, from where then one’s principal can be skimmed off to fight another battle, and the profit stays in the market for eternity, on the back of the mathematics of compounding.

These are my basics. Shared with you, with pleasure, to inspire you to find yourself in the chaos. Use these till you find your own. You can pay it forward. Leads to a better world.

One doesn’t need more. Just one’s basics. Basics that are superimposable on the entire market, and when something conforms, there’s action. Like now, for me.

Please go back to your basics at a time like this. That’s why you have developed them. Your happy, go to place. Market success is more about a high-conviction frame of mind with holding power.

The rest, rest assured, will be History. Go for it.

🙂

Yawn

Posted on by
Reply

Mass hypnosis…

…sweeps psychology…

…into a space where common sense…

…goes out of the window.

Such is the power of a pseudo ideology vis-à-vis a public that is now constantly in fight or flight mode.

Since CoViD.

Vaccinations.

Constant pursuit of growth at any cost.

Next story.

Next story.

Next story.

Let’s spin them a yarn.

Not any yarn.

A yarn that looks very realistic. Cut to ten years ahead, and the yarn probably alters current reality to a yet uncertain level. However…

…it’s not true NOW, in the shape it’s being spun and sold.

Masses are lapping it up. No need for implementation proof, no need for some years of field testing, perhaps at least five, antibiotics take ten in the actual world, no need for anything, no discounting for blunders, just spin it and we’ll lap it up. Ok.

Please do so. We, on the other hand, shall take huge advantage of your mass gullibility, masses. That’s why we remain liquid, for exactly these mass hypnoses.

Yes, we are buyers for Indian IT.

We’ll be buying till the bottom and slightly beyond.

We are fearless. Over more than two decades, we have created conditions for ourselves, mentally, in our environments, financially, which have thrown fear out of the equation.

Our strategy is one that benefits from ridiculous crowd behaviour. Again and again, we’ve gone against crowds, and emerged with multiples, financially free to take our principals out and deploy these into the next mania, panic, or whatever have you.

And so shall it be this time.

We are liquid enough to keep buying Indian IT, with small entry quanta, right to the mid single digit PE levels. Yes, we have that conviction.

Why?

First up, track record. 40 years of successful navigation through disruption. This disruption is different you say? Replace billable hours with a 1000 times more outcomes coupled with handholding, and revenue streams make billable hours look like dust particles. This one para just breaks the back of the story being sold. Do I think it’s possible? Yes. ‘Necessity is the mother of invention’, and the companies we buy have track records to prove that they are capable of emerging in the avatar that is required.

Then, poise. Zero or quasi zero long term debt. Massive free cash-flow per annum on the balance sheets, i.e., the conditions and means to R&D one’s way through. And, why is the public discounting the last five years that have been laden with exactly such R&D? Why is the public further discounting the level-headed input of Indian IT into AI? Owned billions put in with equilibrium. Indian approach. Borrowed trillions thrown in without looking left and right. Western approach. BIG DIFFERENCE.

Then there’s Buffettology. Tried and tested. Down the ages. Value. Deep discounts. Quality. BUY. HOLD. Beats most growth pursuits without having to look. Time and effort requiring growth pursuits are another story, and those pursuing them also become slaves, as in they don’t own their time. WE DO. WE OWN OUR TIME. HUGE WIN.

We are independent, and this current panic shall enhance our level of independence financially in the medium term, which is when we will pull out our current principals going in now, leaving part of our multiples in the market for further compounding.

Pulled out principals will then be deployed into the next panic.

One can already feel it brewing.

No Pharma required anymore. AI and implants will cure everything.

No Auto sector required anymore, it’s merged with the AI sector, or, better still, Auto is now AI. Forget Auto. Invest in AI. You automatically get Auto. Aviation. Tourism. Banking. Everything.

Etc.

New bottles. One after another.

Same old wine.

This time is always different. Ok, keep it rolling.

We’ll just keep doing our common sense thing each time, which is deploying, making a multiple, and then pulling our principal out.

And repeat.

Needle moves

Posted on by
Reply

Hey.

After all our verbal outbursts, …

… point to be noted is, …

… that what’s moving the needle in India is last evening’s development with the US.

Sentiment in India chooses to move with the money.

Till there’s a change in status, licence to print is with the US.

Noted. Where does this leave us?

First up, we’re not pumping in funds upon coming spike. Funds already went in during recent corrections. We’re amply invested.

So, how do we maximize on the spike?

That’s easy. We let it unfold. If it’s big enough, and goes beyond our critical mass, we start exiting as our trailing stops get hit.

What’s going to be the size of our exit?

That’s a personal choice.

Please remember, that there are no permanent bedfellows in business. One presidential mood swing, and we’ll crash into buying territory, That’s the reason to exit beyond critical mass. Definition of critical mass is up to you.

Now we come to size of exit.

Make your own thumb rule. You see, we are functioning at Markets 5.0.5. We make our own rules. We don’t follow. We choose to lead instead.

I’ll share with you my own exit rule, so that you get a bit of a drift as to options prevailing. I will only exit as per my 6 month liquidity constraints. That’s it. No more. No less either. Why? To me, it makes more sense to remain in this market as much as possible. That’s when the Indian markets are giving multibagger returns. And, I’m playing this game in the first place – to generate multibaggers.

For me, creation of just enough liquidity is a mere happening along the path.

How to?

Posted on by
Reply

How does one…

…position oneself…

…for what’s coming?

What’s coming?

Yeah.

Meaning the turbulence ahead?

What else. First up, we’re taking turbulence to be the norm, from this point onwards.

All right. Turbulence = norm. Baseline set.

Then, how do we maximally exploit our understanding, …

…simultaneously creating income…

…but then also allowing wealth to accumulate and compound?

Yeah, how do we?

You tell me.

We need to start with an asset class.

Right.

Which asset class?

Again, you tell me.

What we’re comfortable with.

Yes. Beautiful. And then we weaponize the asset class chosen, the one we’re comfortable with.

Weaponize?

Yeah. Otherwise it will be no good for these times. We need to make it time-befitting.

Example?

Let’s say you choose gold, ok? What good are your efforts in gold if after a point governments nationalize it and then confiscate it, paying you a reasonable price at that moment, and then, from that point onwards, in the hands of enough governments, gold turns a 100-bagger, for them, not for you?

Yeah, what good are my efforts in gold then?

No good. You need to trade gold, use some profits as income, and another portion of profits you invest in other asset classes, bought cheap, which the government has issues regulating harshly.

Like? Crypto?

Some think so. That’s their weapon of choice. Personally, I have problems with storing my entire networth on a pen-drive. That alone takes crypto off the table for me.

So where do you go?

Stocks. They come naturally to me.

Stocks can be harshly regulated.

In isolation, if we’re looking at stocks-stocks, yes, I’ll give you that. In a solid framework encapsulated within an income-generation cum wealth-creation mechanism operating with fundamental, evergreen principles like margin of safety, letting profits run, position-sizing and what have you, even stocks can be made to behave like the anti-fragile system they are a part of.

Would that not be valid for any asset classes, then?

Yes, provided the government can’t seize that asset class overnight from you.

Like cash?

True.

Gold?

True.

Silver?

Yeah.

Bonds?

Not sure. Risk of default though.

Real-estate?

Prices of real-estate follow demand and supply, and demand is reciprocally proportional to negative regulation. Governments can crash real-estate. So, yes.

Crypto?

I’m not so sure that crypto is beyond regulation. However, exchanges collapsing regularly are not my scene.

Stocks?

Have we heard of governments seizing stocks? As long as no illegal activity, all debts paid off, clear ownership and succession, I don’t think the government can do that. So stocks of companies, for me, remain in the fray. On top of that, we encapsulate them into a system. The system has an edge. It’s multi-faceted. It generates income, approximately when required, in cash. Otherwise, it creates wealth through compounding. Throw in 20 -30 models like margin of safety, letting most profits run, position-sizing, fine-tuned Fibonacci, income dynamos, etc. etc., and what we’re looking at is a unique entity, which behaves differently when compared to fragile stocks, or even to robust stocks.

So what you’re trying to say is that it all depends how you handle each asset class is what makes that asset class either fragile, robust or anti-fragile.

Exactly.

Is that your word?

Which word?

Anti-fragile.

No. It belongs to Mr. Taleb. In whatever way a word or a concept can belong to a person…

Like governments can crash real-estate, they can also crash stocks. What do you say to that?

Oh, that’s an anti-fragile part of this system, which leaves the user liquid enough to benefit greatly from such crash, seen from a 15 month perspective. User of such system is positioned to take huge advantage of temporary and large price dips. Stocks have a very low ticket size as compared to real-estate, and can be readily swooped up in a crash in bulk, unlike real-estate, which is heavy and is a huge liquidity-enemy.

Where do you stand with your system, personally?

As a whole, I’m working towards making my system with stocks, income-generation and wealth-compounding as antifragile as I possibly can.

What’s the critical mass, above which the system can be considered safe for the new world order?

I’m not sure. It’s all experimental.

So how will you know?

If I make the transition to the new world order whilst preserving a large portion of my portfolio, I’ll know that I’ve succeeded.

Any other method apart from the make or break one suggested by you?

No. Everything else is theory. Surviving reasonably well and then thriving is the only practical method that counts for me.

Thanks.

🙂

Doctrine

Posted on by
Reply

Europe’s feeling it.

Feeling what?

The stab.

Stab?

Ya, in the back.

They’ve realized it…

…now.

A tad late…

…felt a known figure, lately, presumably.

European media had tried to take this personality down recently, with jibes, verbal attacks and what have you.

Thing is, you can’t take a truth down.

That’s the thing about truth.

A half-truth can be taken down, though.

The half-truths that Europe was sold, ya those kinds, they don’t withstand much scrutiny. They’re exposed after only a few thought processes.

What’s incredible is…

…that the gullibles took three quarters of a century to realize that they are being…

…stabbed.

Currently, their leaders are scrambling for safety.

Highest level delegations are in India and Russia, in in effort to form new alliances.

Alliances that promise more safety? Will the ire of the stabber relent?

New deals with India will be win-win. That’s India’s style of doing business. Economic proximity to India will benefit Europe. Besides, India’s vision is long-term, and it targets a prosperous business future with its partners, whilst ignoring their hypocrisy, if any. A long-term business partner will need to let go of double standards and racial mindsets. If not, lucrative nations will look beyond, seeking other more balanced avenues with diverse partners a plenty.

The discussion about India here is not a biggie, to be honest.

Let’s now address the elephant in the room.

Scrambling to Russia?

Yes, one hears that right.

The same Russia… ?

Yes.

Why?

No other options. Need to secure themselves.

They should’ve just agreed to what VP was saying till Jan ‘22. What would that have cost them?

The ire of the stabber.

Oh ya, I forgot. They were so scared of the stabber, and obeyed every word to an exponential level. How can one behave in such a manner?

Well they are paying for it. Mostly, they are empty. Nothing much working. Manufacturing shutting down. Energy supply dwindling, though that was an own-goal.

Ask that South American football player the price of an own-goal.

Don’t bother him, let his soul rest in peace. Coming back to our discussion, there’s poverty in these nations. Right radicalism is either ruling, or is set to rule. Unemployment is rising. Life is getting more and more difficult for the common person. With AI set to go ballistic, most citizens will be jobless. Unless leaders take drastic measures right now, we’re looking at a civil-war kinda situation in the near term.

What’s the moral of this whole story?

I’m going to leave you with just two words. These two words are the moral of this story. These two words are what’s working today to ensure the successful implementation of a nation’s geo-political policy.

And these two words are?

Jaishankar doctrine.