This year is washout for most funds.
Continuing my analysis from 2015, this is eight year, making 8-y returns "dim" for most of funds - grounding the "expectations" of most people. Dancing, singing, seminars, giving lectures doesnt mean surety of returns, or entitlement of returns. Most return, even for Buffett, despite all dancing/singing/circus, appears to have come from ONE MAJOR DEICISON IN LAST 20YEARS - buying Apple, in plenty, sometime in 2017!!
Return OF capital, is becoming more important than Return ON capital, with OpenAI and Boston Dynamics stunts - looks like many many people r sleepwalking into losing livelihood.
Psychology of Money
Psychology of Money is most powerful book to be read/ to be shared with kids - more important than Graham. Money requires less of rocket science, more of Self-management.
People exhibit rocket science intelligence - aka common biases like -
1) "I should make x returns" - This ET article, link, did good analysis for last 4 decades, busting expectation myths.
2) "I think Ashwariya is better than my current girl" - the fantasy bias.
3) "I want my current girl, with face of Ashwariya, body of Angelina and ... " - u get the point, fantasy bias#2
4) "लगता है मेरी गाड़ी slow है, बाकि सब गाड़ी तेज़ हैं " - the instagram bias - everyone's life looks beautiful on Instagram. Fish sees the bait, never the hook.
5) "You should drive like this" - pillion rider fantasy - no understanding of nuances.
6) Ignoring/not researching shenanigans of fund management - not knowing, what one doesn't know- Ostridge in the sand bias.
7) "Property gave X% since 1950" - as if its going to repeat in next 70yrs, without understanding credit cycles or micro-markets - Repeatability bias + Regency bias
.. and many more.
Morgan Housel ends the book, with examples of his decision making - how he kept is investments simple, in index funds + zero debt + operated on low expectations. And how his dad quit medicine with frugal lifestyle and low expectations.
Most important thing is leading relaxed life, with relaxed people with self-knowledge, with whom one can enjoy the life.
Less of dance/singing/intelligence of cartoon managers .. More of mathematical laws of COMPOUNDING + FRUGALITY and good psychology. And tons of gratitude 🙏
