My Plan

Thoughts moving forward, now that I graduated

I earned my master’s degree and once again find myself in an interesting position: What should I do?

Being away from my country for 18 months has been an eye-opening experience. Spending long periods of time in solitude helped me better know myself. It is curious to note, however, that I didn’t learn anything new in this regard. I simply reinforced and accepted what I already knew.

When a child, I used to doubt things and disregard several others. This feeling has accompanied me throughout time, but after this past year, I feel it as strongly as ever. I see it with much more clarity as well. There are too few Planck’s out there. Only a small minority of people have paid the dues for having true knowledge, thereby leaving most at a point at which I simply cannot trust. I don’t even trust myself. We truly are the easiest people to fool after all.

My mind takes me to quite obscure places sometimes, to which I got accustomed going and now find tranquility. Maybe there’s some truth to Dostoevsky’s “too much consciousness is a disease.” Notwithstanding this, I unknowingly followed a friend’s advice. If one has the proclivity to go to those places, it’s better to simply deal with them at once.

Profoundly thinking about the brevity of life is no joke. It inspired me. Why would I spend my time doing something I don’t want, working for someone whom I don’t like nor admire? I freely confess that it would be simpler if my standards were set lower, but I cannot lower the bar, for whatever reason. It’s the same bar I use for myself.

Munger’s ideas came to me at a decisive stage in life. He mentioned having been very fortunate in his life, for he worked with people whom he trusted and who trusted him. Admiration was reciprocal. Charlie enjoyed working, as do many others in numerous fields. It is not work for them.

What if I am capable of doing such a thing? I’ve already met some of these people and I’m certainly willing to bet big on them. I’m not the smartest, but I’m not stupid either, or at least I hope so. I do have three fundamental advantages, for what I’ve seen: I have unbelievable fun in learning and discussing ideas, rightly so applied to investing; my emotional responses, I noticed, and for whatever reason, are unusually mild and getting milder as years go by; I trust my judgment more than anyone else’s.

All three come with a huge downside. The first has, on several occasions, caused me to sacrifice humanly good things. The second has really scared me in the past and is a trait with an obscure effect to which I cannot shed further light. The third one led me to numerous really stupid decisions, all of which ended up with pain, though, fortunately, unforgettable lessons.

In light of these considerations, I decided the following.

Portfolio Management

I expect to exceed 2 million dollars in assets under management in the short term. Family members and friends have entrusted me with their capital. I feel deeply responsible in ensuring the success of this endeavor, naturally so. It would be negligent to recognize it is people’s life savings and not take their management completely seriously.

The intellectual puzzle that is investing is where all my chains of thoughts converge. It is where I spend most of my thinking time, whether I want it or not. I have fun in doing so. Reading Richard Feynman these past weeks helped me fully realize how much I enjoy it. It is fascinating that the market rewards those who have good guesses as to how the puzzle may look. I would never claim to be in such a group, but I work on improving.

This brings me to the second point that I wanted to share. I have always had the idea that what I write is not for other people, but for myself. Writing forces me to deeply think about topics and to internalize lessons. I share them with the hope for helping someone who may have similar thoughts and feelings.

Consequently, I needed to establish priorities and think upon them. My focus is placed on becoming a better investor. After careful meditation, I noticed that the previous newsletter format (Sunday articles) was reaching a point where the law of diminishing marginal returns started to emerge. New articles were not having the intellectual impact on myself as it had been in the past.

I’ve been thinking on how to address this issue for the past six months and my article on Darwin confirmed my suspicion. That was a tremendously difficult writing. I thought I couldn’t do it. When I saw how many notes I had taken from The Origin of Species and how no connections were easily observed, I thought it was impossible to make something out of them. Well, I learned to fully embrace uncertainty and the valuable lesson that growth comes after pain, in whichever form, maybe overcame by effort.

While writing and after finishing it, I saw the path much clearer than before. I can only access deeper thoughts and build “mental models” by doing these impossible essays. Based on Darwin’s, I suspect each will cause massive intellectual breakthroughs.

I have no idea how this will help in becoming a better investor, but I do have a hint. There is no logical reason to think one can be a better security-pricer than the market if one’s mind only possesses commodity knowledge and ideas. It seems quite obvious to me that exploring these ignored territories will provide a sustainable competitive advantage. One has to pay what seems to be a very high price for this. However, I have fun doing it, despite the struggle.

“The man who loves walking will walk further than the man who loves the destination.”

I have some ideas in mind as to what the next worldly wisdom inquiry will consist of, but I found great disappointment in Freud’s work. I have therefore bought something of Carl Jung and I’ll be exploring further territory. Writing these things consumes large amounts of mental bandwidth. They are always scary to start and engage with. I don’t know nor have any sort of schedule for publishing, therefore. My best guess would be every 2-3 months.

Research

I will double-down on publishing research. I must observe that some pieces shall act as an archive for future buys (or not). I cannot be continuously transparent in that regard. I simply don’t control price action. Nonetheless, I will continue doing quarterly portfolio updates and share my reasoning behind weight changes, if I find it pertinent to do so. I’m also thinking about how to appropriately share part of the screening process, though haven’t got to any conclusive idea that would add value to you.

Having said all of this, I believe the fair value of the service is much higher than its current pricing. I will be raising the subscription price as months go by until I reach such a threshold. I explicitly say this beforehand because you can lock-in the subscription at current prices, namely now at $15.99/mo. On Tuesday, I will publish my research on Winmark. On Friday, the subscription price will be raised by 10% to $17.5/mo.

I understand the downside of this claim, but I’m more comfortable being honest and giving all information for you to make a decision. Incidentally, it is the same process behind research. I try to provide you with all of the information I use to estimate companies’ intrinsic value and decide, with the hope of helping you decide for yourself. In that regard, your judgment is as good as mine.

Distribution Center of Ideas

I have yet to find a more fulfilling endeavor than adding value to other people. Almost the completeness of the things I learned were unexpected. Only rarely have I purposely targeted a specific piece of knowledge. This habit of reading has flooded my mind with fascinating ideas and advice from wise people, many of whom are not alive anymore.

Every single time I learn one of these seemingly vital ideas I think to myself, how couldn’t I be aware of this and how big of a difference it would have made. Only at 23 I learned that “the best way to get what you want is to deserve what you want.” Such a simple idea, but I lacked the clarity to see it. Its meaning was embedded in numerous verticals of thought and actions, all of which contaminate the essence.

I now find myself in a position where I feel a strong urge to share these ideas, not to mention the more academic ones, certainly useful as well. Consequently, I’ll keep writing this newsletter, sharing some things on Twitter, and on both podcasts.

I’ll continue being an acquirer, processor, and distributor of ideas. Interestingly, this sideshow provides huge ground for discussion, improving my analytical process, which I’ll leverage for investing. Very powerful flywheel.

What About the Money?

I realized that a white collar job may be phenomenal for rapidly generating some wealth. Nonetheless, I suspect an early trade-off between money and (value adding + knowledge) will prove more profitable in the long run. Furthermore, the market rewards those that excel at things. Having noted this, even if my hypothesis ends up being wrong or I am just terrible at everything, I’d make the trade-off every day of the week. Spiritual fulfillment remains an obscure question, but I’m inclined to believe my trade-off provides me with better prospects on this front as well.

Jerry Seinfeld’s advice really hit me in this respect (paraphrasing):

“If you are going to fail, make sure to fail doing what you want, exactly how you want to do it. Because that you can live with."

Contact: Giulianomana@0to1stockmarket.com