The Joys of compounding

 Name of the Book: - The Joys of compounding

Author: - Gautam Baid

No of Chapters: -31

Number of Pages: - 439

Single sentence description of Book: - Focussed approach on eight wonder of world i.e. compounding  

What this book is about: - Book is culmination of thoughts on compounding and its effects on our life, our investments, our habits, our personality and lot more. Books lay emphasis on becoming a lifelong learner by constantly reading something, which will eventually determine out trajectory in life. Book explains how constant learning enhances wisdom through a lattice work of mental models. It also elaborates the fact how big tasks can be achieved by constantly adding small incremental values daily. Book is in form of 05 sections namely achieving worldly wisdom, Building strong character, common stock investing, portfolio management and decision making. Book is about development of self as an investor and as great human being rather competing with others. It explains at length about the importance of good associates, good teachers and role models in achieving humility and success in life. Also, it explains the importance of delayed gratification to achieve long term success be it in life or in the field of investment. Author also elaborated the importance of record keeping by means of check lists or journaling in decision making in investments. Book contains several good quotes from Warren Buffet, Charlie Munger, Nassim Nicholas Taleb and many more. Book contains references of various books like Capital Returns, Competition Demystified etc. to support his thoughts on investment and wealth creation.

  Few Special thoughts by the Author: -

1.     Following Anchoring biases mentioned by author are true and needs to be shed.

a) Investors tend to look for stock price rather than management reputation

b) Investors have irrational bias for buying stock prices in round numbers

c) Investors tend to look for original buying price for booking losses

d) Investors make first buying price as reference in mind

e) Investors hesitate to average upwards even for good businesses

f) Investors marry a stock which had created wealth for them in past, even if it is not performing in current scenario

2.   Never disturb the compounding unnecessarily

3.   Occasional loss aversion is part of game, so need not to be afraid of it.

4.   Good Health, Good investment, Goodwill and Knowledge compounds well, if given sufficient time.

5.  Always be open and be curious for about your investment.

6.  Nobody can predict the market as well as future, so better stay with wind not against it.

 7.  We should constantly update our beliefs in light of new evidence pertaining to our investment.

Overall Review: - Book is an excellent read on of one of the underrated force of universe that is compounding. It breaks various notions about investment and explains the facts with examples. It brought. For a successful investor, it is a must read.  

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