the truth is out there

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The truth is out there but very difficult to find. In this age of information unfortunately the virus of lies and propaganda has taken the dominant position. Truth is rarely spicy and exciting and remains silently buried. On the other hand, lies can be made as spicy and exciting as desired by the presenter and spreads fast in the world of headline news, micro tweets and picture posts where convenience and time takes priority over facts. Truth unfortunately lies in the details and not at the surface and is difficult to dig from the heap of lies, is time consuming and almost never convenient or entertaining. However success can be achieved only if you can achieve truth. Success cannot be achieved based on lies and false information.

Role of news media
Today conventional media is full of lies and propaganda. Presented by average Joe and sexy Jane they feed you with nothing but lies. The news presenters and the entire machinery behind them is doing it for name, fame, money, air time, ad revenues and top slot competition for which they want exciting stuff. True or false, accurate or inaccurate doesn't matter to them. Immediately this might sound as an extreme statement but as you start exploring the facts, you will realize that this is true.

Where is the truth
How do we find truth? First get rid the conventional media. If not intentionally feeding you with lies conventional media is full of reporters with less than average IQ and low ethics who present their opinions and interpretations and not the facts. You want the facts go for non-conventional sources of information. Go to documentaries and presentations by subject matter experts, scientists, researchers and hands on the ground workers. Listen to their interviews, chat shows, listen to their speeches. Take the information directly from the source and that is the only source of truth. If someone is presenting you information and that someone is not the original source of information itself he has most likely messed up the information already and whatever he is presenting to you will lack the essence or will be complete junk. Ironically some countries are proud that they provide complete freedom of speech but it is useless since there is no freedom of facts.

What is news media good for then?
News media is ok to follow when you are following a mechanical news, hard numbers, example Company X reported the following results for this quarter but don't take their opinion on whether the result is good or bad. Listen to the company promoter or research analyst for it. Similarly news is ok to follow if they say rocket xyz was launched successfully or crashed after take off but not if they are giving the reasons behind it. You really want to know why the rocket crashed or got launched successfully, then only listen to the rocket scientist and not to the average Joe or sexy Jane presenting the news. Some journalist and news presenters are good, unfortunately very few, very very very few. Follow them closely once you have built a trust with them. It is ok to rely on them for information. The point is before taking a piece of information first focus on who is presenting it, If the presenter is an idiot then what he is presenting is surely garbage. If the presenter is not the direct source then what he is presenting is either intentionally manipulated or unintentionally inaccurate. If it is directly from the source then it is likely to be genuine. If it can be confirmed from multiple sources then you probably have what is closest to the truth. There are some areas where there is very high degree of manipulation, politics, finance and healthcare are some examples.

How to do it?
Fortunately it is not that difficult now a days. Follow the genuine sources and experts on twitter. There are lot of you tube channels that bring you information directly from the source without having a news presenter or a news broker in between. Follow documentaries, interviews and chat shows instead of news channels. Learn to verify the authenticity of any news by correlating the presented numbers and information and confirming it from multiple sources. Similarly learn to identify lies by looking for contradictions and anomalies. Spend time. You want to get to the truth then spend time trying to get the details on the subject. Don't form an opinion based on  biased information sources, headlines, sarcastic/funny one liners and picture posts. Look for details. Spend time if it needs time.

How it helps?
 It helps your mind in the same way healthy nutritious food helps your body over poisonous and addictive junk food. I follow news around the world very closely to keep track of my investments and I have learnt it the hard way. News presenters are either too stupid to present the pure truth or are intentionally manipulating the information for various reasons. Don't follow or believe them blindly, build your own sources of credible, intellectual and genuine channels of information and follow them. Detoxify yourself from lies of the world. Once you know how to get to the truth, success in life will be easy in whatever field you are working. So it helps in becoming successful and getting a clear picture of what is happening.

I always knew I was going to be rich

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'I always knew I was going to be rich. I don't think I ever doubted it for a minute'
                                                                                                    ---- Warren Buffett

Those are the famous words by one of the greatest legends ever in the world of investments and fund management. Most of us spend our life worrying about money. I have many friends & relatives who are coming close to retirement and they worry so much if they are going to have enough once they have to let go of their job and monthly income. And here we have someone who always knew that he was going to be rich, even before he became rich, much much before retirement, infact closer to his childhood years.
Warren Buffet today is one of the richest man on earth almost as far ahead of the second category of rich people as pluto from earth. Warren is so rich that he had to hire Bill & Melinda Gates to just donate all or most of his money away for charity and they happily accepted the responsibility with great pride. Warren also made several others filthy rich, friends, families, early contributors and a long list of loyal followers & investors. They are all millionaires.

It should be then interesting to figure out how Warren always knew that he would be so rich and successful in life way before he even achieved it. Who else can you think of had so much confidence? Edison, Newton never said that they always knew that they will be the greatest scientist, Steve Jobs never said that he always knew that he will be the greatest technologist, Gandhi never said that he always knew that he will the greatest peace messenger, you never say that we will be greatest parent ever. Then what gave Warren Buffet the confidence to say this?

The answer is simple 
Simple compounding mathematics. Warren knew he had P amount in present (which is not rich) but he can compound it at 15-25% per annum forever from here by investing it. And using a simple formula he could easily see how much he will have as he keeps compounding his P year after year which would become F i.e Future value which after elapsed time t makes him super rich. He knew it and it worked out exactly how he knew it (few things here and there).
If you play around a little with this simple formula using different combinations of P and n, you will be amazed to see how it can transform some very small and humble number in present (P) to some really magnanimous number in future (F) given sufficient time (n)

Compounding formula from wiki

 

I am a Warren Buffet fan!

Of all the many reasons, this is exactly why I became a fan of Warren Buffet. It is one thing to celebrate success for one day after slogging for years like the Edisons and Newtons and Steves of the world and It is a completely different thing to always know that you will be successful and make success a part of life instead of one moment or one event thing. This is where Warren Buffet is far ahead of everyone. He has a successful life and not a successful day or event to his credit. Life is all about inspiration and not material success and Warren Buffet inspires me the most. 

Just look at him, he surely knew everything all along. That's the happiness on his face. So who is the one that inspires you in life? Do you also know if you are going to be rich or successful? trust me it is a good life to know in advance :)

Market bottoms and Everest peak

New highs
Most common investors know the market top very well, because there is euphoria all around, markets are hitting new highs every day, everyone is making lot of money, people are moving around with a broad smile on their face, buying new cars, clothes and planning great vacation packages. Everyone is pumping in all their money into the market to join the party. However very few and almost none of the common investors are able to encash their profits before the market tops out. Market swiftly hits the peak and comes rolling down leaving the euphoric investors with just a number, a new peak at which they pumped all their money in and a peak that now looks farther than the Everest peak.

New lows
On the other side when markets are making new bottoms every day or grinding lower slowly eroding your networth everyday, it is way to painful to monitor it daily. Most investors prefer to forget  about their portfolio during this time and concentrate on important things in life like career and family. Well, until the market comes roaring back again and slowly the news starts spreading and again you start seeing positive news and cheer on some faces and then its time to again start pumping money into the market.

The cycle of highs and lows
Do you see a problem here? these investors are bound to invest everytime at market peaks and lose every opportunity when the market troughs. This happens every cycle and over time these investors lose their money and heart and just stop and try to rebuild their lives by working harder and longer hours in the office hoping to get few extra percent increments at the end of the year to compensate all the loses made in the market. Even worse they start saving on all the necessary expenses also to compensate for the market loses. Slowly they become bitter and unhappy. Now do you see a problem here?

Everest Peak
To reach the Everest peak you have to start at the bottom, go step-by-step acclimating to the thin air as you move up. You cannot directly drop yourself at the Everest peak. To reach the peak in the stock market you have to do the same thing. If you are not prepared for this, you should stay in the valley. The mountain peaks are not for you. Sorry, no better way to say this.
What applies to the market, also applies to each of its stocks. Stocks are genuine businesses. They go through cycles both good and bad. Great businesses run by great people survive the bad cycles and thrive during the good cycles. Great investors do the same.
New highs or new lows, peak or trough, easy or difficult, volatile or stagnated, remember wealth is created by great investors and not by great markets. Don't worry about what others are doing. Not everyone reaches the top. Focus on the Everest peak and stop worrying about the chilly wind and everything else. Enjoy the hike no matter how difficult or grinding it may seem. This is a spiritual victory that is bigger than anything else, not for everyone but just for the very few who can hike up from the bottom to the peak.

what's in it for me

In stock markets investment ideas are generated from news and events. While analyzing the event one of the most useful question is "what's in it for me?" Me being the common shareholder. Let's discuss an example because examples explain things better :)


What about me?
A company just announced a mega asset sale at premium valuation, one of the largest deal of its kind in the sector in a long time, which sounds like a great news .. time to take a big bet .. but hold on, this is not sufficient information for making an investment decision.
To decide whether to invest or not in this company based on this news is to find out "what's in it for me?" What is the promoter of the company going to do with all the cash received from the deal. Let's consider the simplest case first. If the company management says something like they want to use atleast part of the cash to reward the shareholders by paying out a handsome dividend, then sure it is great news. Management is shareholder friendly and is willing to share wealth with the shareholders of the company so there is something in it for you. It is worth an investment consideration.
If the management says that they want to use the entire cash consideration for retiring debt or immediate expansion plan, it will benefit the shareholders of the company not immediately but in long term in the sense that the company will have a healthier balance sheet due to debt reduction or higher revenue due to business expansion hence higher profits and better valuation for the stock price. But this should also raise a red flag, why? Well debt management and business expansion is part and parcel of any business cycle and will always keep going on. How funds are utilized into these things is opaque to the shareholders. If even after such a historic event in the company the management is not willing to share even a small  fraction of their gains with the shareholders in a direct and transparent manner, then atleast you can conclude that the management is not shareholder friendly and will always try to retain the profits within the company. So this is not the best of investment.

If the management is completely non-transparent and tight-lipped about the cash utilization or has a very abstract in-the future plan and is retaining all the cash within the company, the only thing you can be sure about is that "there is nothing in the deal for you" Then all is not well and there are better companies and management to invest your money with. You must definitely not invest in this company. If you already have invested in the company in anticipation of the deal, consider exiting and black listing this company and all other group companies run by the same people.

Beware of the good news trap
Note that many investors fall for this good news trap committing large investments just on the announcement of the good news without analyzing what is in it for them and come back empty handed and disappointed. Sure the news could be great for the company and its promoters, what you need to figure out as a shareholder before investing is that , is the news good for the common shareholder of the company.


So what do we learn from this simple question
Great companies, great management treat each shareholder as equal owners of the company and share the successes transparently and happily and take great pride in it. If a company or its management is not able to prove this then it does not merit investment of your hard earned money. Basic simple check to identify and be part of a great long term secure success story, isn't it ?