Charlie Munger - A life, well lived

It is sad seeing one of your heroes pass away. One usually wishes that they sort of live on forever. If you have not heard of Charlie Munger, I suggest you stop reading and spend time reading about him. It will be time well spent.

A wonderful summary - Who is Charlie Munger?

Don't forget to listen to this long meandering speech when you get the time. It is a wonderful compilation of mental models in a speech Charlie gave in 1995 at Harvard.

Charlie just passed away a few weeks shy of 100th birthday. Well.. what a life, a life truly well lived. Reading about him, my son was asking me yesterday why he was only worth $2.6B while his partner at Berkshire, Buffett is worth many times more, $100B+? 

Well, it seems to me that he has given away a large chunk of his wealth over the years. From the days when he held over 2% of Berkshire Hathaway (which will make him slightly shy of $15B), he seems to have over time sold his shares to fund various philanthropic activities. Who cares if it is $1B, $10B or $100B....at the end of the day, it is what legacy you leave behind that matters. 

Since I do not have a whole lot of time, I have compiled a list of his writings from various books. Let him speak for himself here -

Charlie on Family, Finances and Savings

He wanted a large family. He eventually had 8 children.

Losing his first son. A nasty divorce. Picking the straws after he was 30. Never self-pitying. Play with the hand you are dealt, as best as you can.

Playing a game that fits your talents, he says.

First break in real estate. Interestingly, he constantly avoided that for much of his later life. Having great partners.

Some old takes on Buffett. Munger. Guerin (third partner who over-leveraged and was not in the league of Buffett and Munger post 1980's).. Take on their earlier partnerships. Why only partner with great people.

Munger and his association with Buffett. How Buffett tells Munger to move into investments and start treating law as a hobby :-) 

Law as a hobby...

Initial days.

Munger-Tolles Lawfirm. Wheeler-Munger Money management.

Leverage. Why we do not know about Guerin - it's very interesting.. he might have been as popular as Buffett-Munger if he had not leveraged and lost out.

Berkshire thoughts

Their first big buy - See's Candies.

Wesco Control.

Committing large capital to great ideas.

Delegation.

Bet sizing. Big Ideas.

Concentration.

Reading.

On opportunity cost. Having no master plan.

Crisis. Solomon - LTCM - Accounting - Finance. etc..

Leadership mistakes of Gutfreund.

Fed loses faith. 

LTCM post-Solomon. Intellect is not key for investing.

Options. 

Teaching Finance.

Incentives and biases.

Career choices. Starting early, fooling yourself.

First Million.

Taking difficult jobs.

Fooling yourself.

Philanthropy and Ben Franklin.

A modern-day Ben Franklin.

Take a bow. What a man. What a life well lived. This blog is more a note to myself than anyone else. 

Ciao till next time...Harsha

Year two out of corporate job - An update

I had written about leaving my corporate job and how I was doing a year ago. Too many things have happened since then and I'm excited every day. A former colleague was asking what is my year two update. I had brushed it aside that now I am not having time to write.

I noticed that this year has been super busy and my blog has gone un-updated. Either I was too busy to write or I did not feel the urge to pen down anything. I have to at least make one customary update so I continue my blog for the 19th year with at least one blog post. Likely, I will make this a short post... not one of those meandering blogs I've penned down before. Time is in short supply.

So, with that, here goes my story. For those who are new, here's my blog post of last year - Financial Independence: A year after leaving a corporate job. 

A one-sentence summary is - I've gotten more busy than when I was working at Enphase. I've become a reluctant entrepreneur and gotten involved in a few companies. 

My activities

First, an update on Dwaith. As I had written previously, one of my main reasons for charting out was to create a company (Dwaith), get a portfolio management service (PMS) license, and actively manage money.

I've realized that I cannot fight SEBI and bureaucracy. The best way to navigate is by becoming entrenched in the system. Dwaith has become a full-fledged SEBI-registered Investment Advisory service. I've actively refused clients so I can focus on giving quality returns to the ones I have until I can convert this operation into a PMS (or an AIF Cat 2/3). The PMS/AIF is just around the corner at the end of the year.

I am very thankful for some of my ex-colleagues who became my first customers. The returns have been phenomenal, but - more importantly, I get to interact with them on a regular basis which is even better. A lot more people have started approaching me now through word of mouth. 

Secondly, I've got two great partners in the two businesses I'm closely involved in - Ramesh @ Zepco and Rajesh @ Power One. One is a startup and the other is a well-established company that is poised to take off. Both companies play in excellent fields with large opportunities set ahead of them. 

We have a clear strategy and goalposts ahead at both these companies which is keeping me busy. From a five-day work week - I've suddenly got into a six-day workweek mode. I am not complaining.

That apart, I continue to meet quite a few new people and companies. I've realized that when people come to know that they can bank on you and will not take them for a ride, quite a few quality people approach you for an association. I've got a lot of good luck and help from people, so helping others is a way of paying forward. 

Innovation and Entrepreneurship 

Most importantly, I've realized India is poised for growth this decade. Nobody; not even ourselves can stop the growth. Young people with immense talent and potential are looking at creating new companies and sometimes, I wonder how people fresh out of college have the guts and gumption to start companies. I've become a reluctant entrepreneur by chance (I'm first to admit, it was not planned), and more importantly, I'm seeing young people around me being a lot more innovative and risk-taking. 

Energy, power electronics, manufacturing, motors, and associated industries are poised for enormous growth. These are the areas where I am focusing on. I cannot comment on others. I think we in India will slightly tweak the China growth model to make it our own. Our opportunity set is even bigger than China's. 

I was in China a few months back. I was completely taken aback at the kind of response a show like SNEC had. I was used to visiting Intersolar, REI, All Energy, etc in various countries before - but the sheer number of people attending the show in Shanghai blew my mind. Somewhere down the line, a hockey stick-type growth curve is waiting to unfold in countries like ours.

India is just getting started. Five years out, it would be interesting to see how things pan out. 

I am super excited about the things I'm involved in. I think in some of the cases, we are charting out a new destiny. Here's a quote to sign off that I keep on my desk -

As your desire is, so is your will

As your will is, so is your deed

As your deed is, so is your destiny

Your deepest desire is your destiny

- Brihadaranyaka Upanishad

Ciao till next time...Harsha