Over 4 decades of investing some things have not changed – those are the principles and my needs for investing.

Of course many of my principles are brazenly got from Graham and his ilk like Fisher, and less from Buffett. Munger to me is a greater hero than Buffett, but I am digressing.

For me the learning about investment (and life) are the following…Some are learning, some are principles. You will know which is which I presume…

1. Mr. Market is a great Humiliator. Just when you think you have understood it, it slaps you real hard. As you grow older the slap hurts less – because you have learnt how to balance yourself, not because the slap is less hard.
2. Mr. Market can be stupid, smart, idiotic in the short run, but in the long run it aids companies with good management and awesome PR in perception management.
3. There are companies which are far worse managed than Reliance, but have a fabulous “reputation”.
4. Important learning – if a company is managing its reputation well, hats off, today it is part of very important management.
5. Wealth creation is a multi decade multi generational activity.
6. Luckily for me “wealth creation across generations” has been the over-arching goal.
7. Graham watched the PE go from 6 to 22. He was still investing. He did not worry about the bubble at “22”.
8. I have watched companies with zero CASH flow being valued at EBIDTA multiple. A huge change for people like me who thought PE ratio was STUPID, retail shareholders should ONLY look at PD (price dividends) ratio – because that is what the shareholder got.
9. Graham, Buffett and me strongly believe that the “not wanting to learn” investor is much better of in an index fund.
10. You have to say ‘No’ more often than you have to say ‘Yes’. I remember on the first floor of a big Fmcg company they had a “Selection Room” where interviews were conducted. I was 23 when I commented “should this be not a Rejection room” – the head of accounts laughed. So damn true – have to say NO far more often. 1:100 is the ratio I think.
11. Keeping out noise and staying away from peer pressure is easier for us as we get older. Our kids and fund managers are under far, far greater pressure than I am as an investor.
12. After an event happens it looks obvious!!
13. Graham and Buffett understood Behavioral finance but did not use the word.
14. …..well this is what I could think of now…