Investment is about Human Behaviour

Great investors are often articulate writers who openly share their investment views and philosophy in open newsletters or annual reports.  My own favorite reads from great investors in no particular order are: (1) Warren Buffett's Berkshire Hathaway's annual shareholder letters (2) GMO's co-founder and chief investment strategist Jeremy Grantham's quarterly newsletters and (3) Oaktree Capital Management's chairman Howard Marks' Memos.

Today I also had the pleasure of listening to Howard Marks' webcast at the CFA Institute about his latest book "The Most Important Thing: Uncommon Sense for the Thoughtful Investor" and how investment theories and practices diverge.

I not only share his philosophy of investment is first and foremost about protecting your downside, but also enjoy many of his favorite quotes about the human side of investing which is a great reminder for all investors:

"What the wise man does in the beginning, the fool does in the end" (also one of Warren Buffett's favorite quotes, essentially saying people generally rush in as prices are elevated and sell when prices have slumped).

"It ain't what you don't know that gets you into trouble.  It's what you know for sure that just ain't so" - Mark Twain. (It is better to know what you don't know).

"Never forget the six-foot-tall man who drowned crossing the stream that was five feet deep on average" (surviving the outlying events is what counts for funds).

"It is better to fail conventionally than to succeed unconventionally" - John Maynard Keynes (describing typical institutional investors' risk averse attitude for their career sake).

"Randomness alone can produce just about any outcome in the short run" (Howard Marks' interpretation of ideas in Fooled by Randomness by Nassim Nicholas Taleb - a favorite book of Howard's).

Howard Marks' conclusion particularly resonates with me as we both believe in "margin of safety" in investing and the abundance of "inefficiencies": "Smart investing doesn't consist of buying good things, but rather of buying things well.  Price is what matters most for investment success.  Only disciplined, objective, unemotional, expert investors can know the right price."

To supplement this conclusion, I also want to refer to something Malcolm Gladwell said in his profile on Nassim Nicholas Taleb on his website: "There is more courage and heroism in defying the human impulse, in taking the purposeful and painful steps to prepare for the unimaginable."

It was a very well-spent 45 minutes.  Lots of things to contemplate about the human side of investing.

How to Cook Better

10 years ago, I would not even think of buying a cookbook, let alone reading one as if it were a book.  How things have changed.  My favorite pastime includes reading cookbooks (especially ones that tell great stories such as "The Seventh Daughter" or "Gluten-free Girl and the Chef") and food blogs.  One of the reasons is that I realize I have to invest more time to eat better and to cook better - things which are in my control to maintain good health.

A couple of weeks ago, I attended a 1-hour Nutrition 101 talk by food blogger and health writer, Darya Pino, whose website: summer tomato becomes an instant favorite of mine.  Just in 1 hour I learned how to cook better, several ideas for breakfast and lunch, what staples you should shop, how to eat (mindfully), how to snack and how to eat healthy when eating out, etc.

I especially like her 4 essential tips for cooking which she repeated in her blog here:

(1) Start with great and fresh ingredients;
(2) Do not overcook food especially veggies, meat and eggs (this is a big tip for me, yet the idea is so simple);
(3) Use more salt!  This may sound controversial.  Apparently 75% of sodium comes from the processed food we eat.  So if we do more home cooking, we will dramatically cut down on sodium anyway so a bit more salt in our food will not only make our food taste better but also will not do that much harm to our body.
(4) When in doubt, add some acid such as vinegar and lemon which will also brighten the food.

While Darya's food blog is filled with tips, colours, articles reviews and recipes, the stonesoup food blog in contrast is a minimalist blog which is extremely refreshing to look at, and has wonderfully simple recipes.  The blogger Jules Clancy also produces a video for each blog which is very easy to follow.  To round up my favorite blogs, here is an Asian-inspired food blog which is inspiring too.  When I run out of ideas to cook, I type in an ingredient and viola! several dishes come out. Then if you like Japanese food and bento-making, this colourful blog is just a delight to look at (Japanese is the Master of making everything looks so good). 

I am just thankful for the invention of web and blogs.