The Joys Of Compounding: The Passionate Pursuit of Lifelong Learning Paperback – 20 November 2020

Financial independence is perhaps the most underrated concept. In India for example, it is estimated that only 1 in 10 working people have solid plans for a comfortable retirement, and 7 in 10 exhaust all their savings within 10 years of retirement. This book is for those who wish to retire (even early), and yet live happily, by investing wisely.First and foremost, it is an excellent collection of thoughts from giants like Warren Buffet, Charlie Munger, Peter Lynch, Daniel Kahneman, Benjamin Graham, Peter Kaufman, Nassim Taleb and John Maynard Keynes, (to name only a few), borrowing heavily from their work. In fact, this book is a perfect synthesis of concepts, elegantly and intricately woven to demystify the complexity of the world of investing.For the author, investing in oneself by inculcating good values and habits forms the foundation of investing one’s money. An important facet of self-improvement is to read, and read and read. Quoting Mark Twain, “The man wo doesn’t read good books has no advantage over the man who cannot read them”. This book itself is a result of ‘Synoptical reading’ which synthesizes the knowledge from a comparative reading of several books. He explains the Mathew Effect, wherein the person with a larger knowledge base acquires expertise at a faster rate. This explains why people like Buffet and Munger are relentless learning machines, reading for several hours every day. This abundant knowledge base with thinking and reflection, gives them an enormous edge over others in making some of the smartest decisions. On the other hand, most people lose money, wasting time by viewing TV Channels that distract our thought process and broadcast ‘investment strategies’ that are of no value. In fact fueled by dopamine, many are driven to ruin by impulsive investments and speculative day trading, relying on such junk.Investment is very simple, but not easy, said Warren Buffet. Investing in good quality equities, at bargain prices, or value investing, is the core of this book. In addition to identifying quality stocks, the other important side of wealth creation is giving adequate time. This means investing early, through rigorous financial discipline and delayed gratification. A great example is that Warren Buffet would be worth only $ 2 Billion today instead of $ 85 Billion that he actually is, had he delayed his investments till age 30. Not a small difference indeed. People focus on stocks as a means to become rich quickly, not very different from betting and horse racing. Patience pays in the stock market. A dollar invested in gold in 1802 is worth $ 4.52 in 2002 (value preserved), that in bonds is worth $ 1778 (sure and steady returns) while that in stocks is a whopping $7,04,997 (example of wealth creation). The annualized return from these asset classes is 0.7 %, 3.6 % and 6.6 % respectively.There is substantial emphasis on investing selectively in excellent businesses run by excellent managements. Just as man is judged by the company he keeps; he can also be judged by the portfolio he owns. Integrity, strong customer value proposition, deep moats through technology and brands and prudent capital allocation, create sustainable competitive advantage to such firms. Bad firms are destroyed in a crisis, good firms survive a crisis and great firms actually improve after a crisis, says the book. These are the firms that have successfully endured the waves of ‘creative destruction’ and are in fact those who are at the forefront of innovation, creating an uncontested marketplace. Warren Buffet and Charlie Munger are masters at identifying such great companies and invest in them when markets are in a downturn.The book also has some concepts on investing in cyclicals, that to me appears counter intuitive, and even hazardous. While the author has been successful in many instances (after learning from mistakes), many examples in the Indian context would not pass the Buffet-Munger test on quality.A chapter on Insurance (life, medical and property), to mitigate unforeseen downward risk would have added substantial value, especially in the Indian context.Though this book is an excellent storehouse of knowledge, in my opinion, the structure and sequencing of topics needs a re-look. This is a very minor observation, and not a criticism.To all those who need this book the most, and are not in the habit of reading regularly, the 400 plus pages can put them off. But I can assure them that this time well spent, and perhaps the best investment, with a potential to change their lives. Someone said, ‘We have two lives; the second one starts when we realise that we have only one’. James Bond would agree too!!Thank you, Mr Baid. This book is a lighthouse to millions of young people, for a better tomorrow. This book shall be my loving Christmas and New Year gift to those who need it most, amongst family and friends. The joy of giving also follows the law of compounding.

I have covered reading about 2/3 of the book. It's very good. The sections on 'Common Stock investing' and 'Oirtfolio management ' are especially good; providing insights and also reaffirming what has been earlier learnt. Points in ROIC, %ROIIC, value of sustainable Long term moderate returns, difference between risk & uncertainty are very useful. Famous quotes by investment gurus is insightful. I am yet to read the last section on 'decisiin making. It's definitely a worthy buy.

This is a very good book, and requires engaged, attentive reading i.e. it is not one for skimming through. Personally, I needed many hours spanning a few weeks to get from start to finish. It was certainly an enlightening reading experience, and taught me quite a few novel real-world concepts and nuances, never mind the fact that it is 20+ years since I graduated from college.The foreword is written by Guy Spier, and the structure of the book's contents follows five sections: achieving worldly wisdom, building strong character, common stock investing, portfolio management, and decision-making. For detailed contents, please refer to the images of these pages in the "Customer Images" section of this review.For me, this book turned out to be a veritable tome overflowing with classic aphorisms ascribed to the likes of Confucius and Seneca, and far more so quotes from Buffett's and Munger's interviews or excerpts from Berkshire Hathaway annual meetings/reports. There is an abundance of sage advice/observations/insights/assertions from other eminences grises too, be they from the realm of investing, or philosophy, or general everyday life. A long list of such grandees is provided in the last paragraph of this review. Some of these are quite active and widely followed twitterati, quite the Tweet Elite of FinTwit, and I recommend following them in addition to the author.A lot of personal investing mistakes and successes are also shared, but these are limited to Indian equities.Behavioral finance is another topic that receives ample coverage.The last ~18% of pages are a couple of poems; a long list of people to whom the author pays his tributes; notes; a lengthy bibliography; and quite a comprehensive index.Now a pair of mild negatives: first, this maiden authoring effort can sometimes reek of "gurugiri" i.e. sections of it can feel cloyingly sanctimonious; second, tautologies abound.Overall, this is a highly commendable book, and almost as good as many top long-term investing books condensed into a single volume. Unfortunately, its price is stratospheric in India (approximately ₹2200 when I last checked), and even as of mid-October 2020, this book lacks an affordable Indian print edition, notwithstanding intermittent affirmations by the author e.g. a tweet about his "plan to change that - very soon!". UPDATE: As I write this sentence on 28 October 2020, amazon.in has a paperback version for India listed for ₹449 (i.e. 10% off the ₹499 list price), and the Kindle version for ₹334.95. The actual date of availability, however, is slated to be circa 20 November 2020.I will end with a (most likely incomplete) list of people that have been mentioned in this book: Warren Buffett and Adam Smith; Charlie Munger; Benjamin Graham; Benjamin Franklin; Napoleon Hill, David Schwartz, and Ian Cassel; Geoff Colvin, Daniel Coyle, Cal Newport, and Anders Ericsson; Charles Duhigg and James Clear; Robert Maurer and Darren Hardy; Gillian Zoe Segal and Scott Adams; Guy Spier, Vishal Khandelwal, and Morgan Housel; Robert Kiyosaki; George Clason; Thomas Stanley, William Danko, David Bach, and Harv Eker; Shane Parrish and Professor Sanjay Bakshi; Mohnish Pabrai; Basant Maheshwari; Nassim Nicholas Taleb, Max Gunther, and Leonard Mlodinow; Kenneth Posner; Sun Tzu, Michael Porter, W. Chan Kim, Youngme Moon, and Bruce Greenwald; Peter Bernstein, Howard Marks, and Seth Klarman; Peter Thiel; Clayton Christensen; Peter Bevelin; Thornton Oglove, Howard Schilit, and Charles Mulford; Stephen Penman and Baruch Lev; Daniel Kahneman, Amos Tversky, Richard Thaler, Dan Ariely, and James Montier; Herbert Simon; Fred Schwed; Robert Cialdini; Nate Silver and Philip Tetlock; John Allen Paulos, Barbara Oakley, and Jana Vembunarayanan; Darrell Huff and Charles Wheelan; Atul Gawande and Michael Shearns; Phil Rosenzweig, Elliot Aronson, and Duncan Watts; Michael Mauboussin and Annie Duke; Jason Zweig and Gary Belsky; John Burr Williams, Alfred Rappaport, Bharat Shah, and Utpal Sheth; Charles Mackay, Charles Kindleberger, John Galbraith, John Brooks, Edward Chancellor, Robert Shiller, and Maggie Mahar; Peter Senge and Donella Meadows; George Soros, Benoit Mandelbrot, and Richard Bookstaber; John Maynard Keynes; Burton Malkiel, Charles Ellis, and John Bogle; Phil Fisher, Peter Lynch, Ralph Wanger, Pat Dorsey, Tom Gayner, Terry Smith, Chuck Akre, Peter Cundill, William O’Neil, Jesse Stine, and Nicolas Darvas; Jesse Livermore; Thomas Phelps and Thomas Russo; Anurag Sharma; Gustave Le Bon; Professor Aswath Damodaran; Sam Zell; Maurice Schiller, Joel Greenblatt, and Martin Whitman; Laura Rittenhouse; Roger von Oech; Richard Feynman; Seneca, Aurelius, Epictetus, and Ryan Holiday; Will Durant, Ariel Durant, and Yuval Noah Harari; Steven Pinker and Hans Rosling. Or, to put it in a facetious light, almost everybody who is anybody when it comes to investing and tangential fields. :-)

Must read book for everyone