01 Jun
Finance

The Black Swan by Nassim Taleb: Summary, Hidden Risks, and Life Lessons You Can Apply

The book challenges the Enlightenment ideal of rationality and control. Instead of believing the world is orderly and predictable, Taleb suggests we embrace uncertainty and randomness. True wisdom lies in humility—acknowledging how little we truly know and resisting the urge to explain away the unpredictable.

Taleb defines a Black Swan event as having three traits: It is an unpredictable event. It has a massive impact – it can change lives, industries, even nations.It seems obvious in hindsight – after it happens, we think we saw it coming. Example – 9/11, Covid-19 etc.

Taleb shares following ideas to better understand the concept of Black swan:

1. The Turkey Problem: A turkey is fed every day,

getting fatter and more comfortable—until the day it is ready to become food for thw owner. 

We mistake stability for safety. Just because something has always worked doesn’t mean it will tomorrow.

2. Silent Evidence: We judge based on what we see. But what about what we don’t? We praise entrepreneurs who “made it,” not the thousands who failed quietly. We credit generals who won wars, not those whose wisdom prevented them

Here’s the philosophical gold:🔍 “Absence of evidence is not evidence of absence.”he gives examples like:

We don’t see the people who failed, only those who survived (e.g., entrepreneurs, generals, artists), so we wrongly assume their strategies worked.

We don’t see diseases that didn’t get diagnosed, so we think they’re rare, when they’re just undetected.

We don’t see terrorist attacks that were prevented, so we underestimate the success of prevention.

3. The Narrative Fallacy – The Stories We Tell Ourselves Are Often Lies.

Humans are natural storytellers. Our brains are wired to connect dots and make sense of chaos. That’s why, after a shocking event—a market crash, a failed relationship, a political revolution—we quickly build a neat story around why it happened.

Taleb calls this the narrative fallacy: our tendency to create stories that simplify complex events, even if those stories are wrong or incomplete.

👉 Why it matters:These narratives give us the illusion of control and understanding. But in reality, they often ignore randomness, hide true causes, and make us overconfident about the future.

For example:The stock market crashed because of a speech the Fed Chair gave.”

→ Maybe. Or maybe it was just a random trigger in a fragile system.

“My startup failed because the market wasn’t ready.”

→ Or maybe it was bad timing, bad luck, or invisible risks you couldn’t control.

4. Experts are not often experts – Taleb takes direct aim at so-called experts—especially in fields like economics, finance, and forecasting. He argues that many experts sound confident but are often no better than random chance at predicting real-world outcomes.

They suffer from the illusion of knowledge, armed with complex models that ignore rare, high-impact events. Their suits, spreadsheets, and jargon mask a troubling truth: they can’t predict the future any better than you can.

Taleb’s ideas are not just theoretical—they can reshape how you live, work, and make decisions:

Question certainty: Be cautious of people (and systems) that claim to know the future.

Avoid over-planning: Rigid life or business plans often crumble when randomness strikes.

Embrace randomness wisely: Expose yourself to good luck (serendipity), but protect yourself from ruin.

Build around the unknown: Focus more on what you don’t know than what you do.

14 Nov
Philosophy

How to Overcome Psychological Suffering: A Guide to Managing Mental Pain

As the Buddhist saying goes, “Being physically hit by an arrow is painful, but being hit by a second emotional arrow is even more painful.”
In other words, we can say that there are two types of suffering: one that arises physically, which can’t be completely controlled, and the second that arises through our reaction to the first one, which we can control.
If we give names to these types of suffering, the first one could be called physical suffering, and the second one could be called psychological suffering, which arises at the level of thought.
In this blog post, we will discuss only psychological suffering as it is the one which haunts us the most. So let’s begin.

If carefully observed, we can see that we only suffer when we think. For instance, when we think about the past (horrible memories) or the future (unknown territory). There is no suffering in the present. The thing that gives birth to past and future is our thoughts. We cannot live in the past or future physically; they exist only in our thoughts. So, clearly, it is our thoughts that give rise to suffering.

Let’s understand this in another way, using the concept of reality and illusion. In the prior example, being physically hit by an arrow is reality. But our reaction to it in our own mind is just an illusion. We see reality when we look at any event without adding meaning, thinking, or interpretation.
For instance, you watched a movie with your friends. All your friends have different opinions about the movie. Some enjoyed it, while others found it boring. So, what’s the reality? Is it boring or interesting?
It is just our thoughts that come into the picture and give opinions based on our desires and fears.
If you want to live in reality, learn to observe or see things without adding anything in your mind about that particular thing. For example, if you are fully involved in any work, you do not feel a sense of time passing. The reason is that you and the work become one. There is no separation between you and your work, so you enjoy it. And if you carefully observe this, you will also see that you were not there. In other words, you can only remember the absence of the doer and the presence of the work.
So, we can also say that our experience of the world is best when the experiencer (self) is absent, and only the experienced (things we are experiencing) is there. Or when the experiencer and the experienced become one. To clarify, there are no thoughts to separate these two.

Let’s take another example to understand how thoughts ruin our experience of reality. Suppose you went out with your family for dinner. Your family is enjoying the dinner while you are thinking about an awful memory of your last dinner when you got into a fight with your friend. Clearly, you are not able to enjoy the same dinner your family is enjoying. You are lost in something that does not even exist—it exists only in your memory. It is only your thinking that is preventing you from experiencing the delicious dinner.

This is not a piece of discouragement towards thinking. Thinking is useful for performing our daily activities. It’s just that we need to understand the impact of thinking and identify when it is necessary to think and when it is not.

And the purpose of this blog is just to understand how our thinking is causing psychological suffering and how our psychological suffering is just an illusion.

29 Jan
Finance

How to evaluate management of a company? How to find quality stocks?

Financials of a company are tools to measure company’s success. But for selecting good stocks, we also need to analyse qualitative aspects of a company along with its financials. Qualitative aspects of a company depend upon management of the company. In this blog we will find out how to evaluate management of a company.

One can evaluate a company’s management by considering below mentioned points, which could be found in the annual report of company:

1. Honesty – Is management communicating bad news as freely as good news?

2. Management should not be biased towards promoters. Is it lending loans to promoter companies that could have been distributed to shareholders ?

3. Capital allocations – How management is allocating capital? Is it wasting resources in loss making investments or projects. Check Return on capital employed ROCE). It should be above 15% in general cases.

4. Does management rectify its mistakes made earlier?  For example – XYZ ltd had acquired a loss making enterprise last year. Now is management considering to hold such enterprise or to dispose such enterprise to rectify its mistake made earlier?

5. Check whether promotor is drawing salary in excess of the limits under companies act 2013.

6. Whether salary of promoter is increasing year by year despite of declining company’s profits

7. Investors should check whether promoters are lending money to their related parties without any sound reason.

8. Check whether management is continuously acquiring loss making enterprise. Also the management should generally make investments in businesses which are related to core competencies of the company.

9. Check Promoter’s background including their educational qualification, years of experience, companies handled by them in past.       

10. Whether management has track record of fulfilling the promises made earlier. Read past years annual reports to identify what promises were made by management and did management fulfil those promises in timely manner. Delayed project work means huge interest cost.

This is how you could evaluate management of a company. This is also an answer to the question “How to find quality stocks?”

21 Nov
Philosophy

How language affects perception?

We all know that language is a means of communication. It is a means of thinking.  We cannot think without language. If we try to think without language say using symbols, our thought process will be very ambiguous and confused.

The fact that language is one of the foundation of thinking lead to the fact that it can affect the way we think, the way we perceive things.

Let’s understand it through different examples

1.  Color Perception – Let’s take one of the most famous example. In Russian, light blue and dark blue have separate words i.e goluboy and siniy. So Russians tend to have cognitive separation between these two colors. They are quicker and more accurate to distinguish light blue and dark blue than English speakers.  

2. Time perception – It is seen that speakers of languages which does not have separate words to distinguish between present and future are more aware about their future. They are less likely to smoke as they are aware about its consequences in future. Also they are more likely to save for future.

3. Memory perception – Language may affect the way in which we remember any event.  Structure of a language determines whether a sentence is subject focused or object focused. The choice of words, especially adjectives also affect what we remember and how we remember.

4. Emotional perception – It is similar to color perception. If a language has separate words for different emotions, speakers would find it easier to perceive and navigate those emotional feelings. And it would be easy to distinguish between different feelings.

In a nutshell we can say that language affect how we perceive things and distinguish between different objects and feelings. If an object have different words to describe itself in a language depending upon its quality, people will find it easy to distinguish between its qualities.

So clearly language is more influential than we think.   We can also conclude that multilinguals ( who know multiple languages) can see a particular thing form different perspectives. It is a good news for you if you are a bilingual or multilingual.

13 Nov
Finance

When to sell stocks?

Philip Fisher, an investor offers three reasons for selling stocks .

One should only sell stocks when :

1. If a mistake was made in original purchase – Some times people get attached with regards to holding stocks for long term in a way that they overlook the mistake they committed while purchasing stock .
If as a result when stock prices fall, they do not sell it. They keep it in their portfolio with a hope that price will correct itself in long run.

But when price do not correct , they end up making huge losses.

So whenever you realize that you committed mistake at the time of purchasing stock, sell it without waiting for corrections.

2. The stock no longer satisfy the criteria that were looked into while purchasing it – The facts you considered when you originally purchase share may have been deemed to be correct, but facts can change negatively over the passage of time. Say you bought a stock looking at the integrity of the management and strong business model, what if management of the company changed and new management is not showing integrity or the business model is changed drastically.

3.     A more attractive stock is identified – If you find better investment opportunity and you have shortage of cash, It is the best option to sell the stock for better opportunity. Make sure that the benefit of the new investment opportunity outweigh the implication of capital gain tax resulting from sell of previous stock.

Philip Fisher also noted that selling stocks should not turns out to be very often.
“If the job has been correctly done when a common stock is purchased, the time to sell it is almost never.”
 – Philip Fisher

08 Nov
Finance

What to check before buying a stock?

Investing in stocks just based on someone’s advice is very risky. It is important to have your own checklist to identify stocks. Checklist attached below is not fully exhaustive but it is least one should check.

1. The company should have zero or very little debt . Consider the companies having Debt – Equity ratio less than a half. This way, you will avoid companies that have high risk of default.

 2. Last three year CAGR sales growth rate and CAGR profit growth rate is between 10 % to 15%. This ensures that company’s profits are growing at consistent rate.

3. Last three years average return on equity and return on capital employed both are greater than 15 % . This ensures that the company is utilising its funds in an effective manner. Return on capital employed is more relevant for the companies having high debt.

4. Make sure that promoters shareholding is not declining and is high. As promoters have insider information that public do not have, tracking promoters shareholding tells a lot about company’s future trajectory.

5. Promoters pledge is less than 5 %

6. PE ratio is less than industry average and less than last five years of average PE ratio.

7. Receivables days are consistent or are falling. Receivables days tell us about days taken to collect cash from customers.

After short listing , look more deeper into these stocks and select the best one .

In later vlogs, checklist for qualitative analysis will be shared.




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04 Oct
Philosophy

How to get motivated to work? A different perspective.

People think that strength comes from selfish motivation. But reality is that strength and devotion towards any work comes from selflessness.

It is selflessness that makes you an indestructible force. It is selflessness that makes you do your duties with complete devotion.

It is a psychological game. If you increase base of your identity bigger, you become mentally stronger.

For most people, their identity is just their body. But if they extend their identity to their family, they become little stronger. If they identify themselves with their society, they become more stronger.

And when they identify themselves with their country, they become more stronger. And when they identify themselves with this universe, they become strongest.

For instance, a lethargic person may also become active when it comes to feed his family.

Similarly, someone who is working for nation’s military work will have very strong devotion. He can tolerate all wounds and pain he get while fighting for his country.

In same way, A person who see his duty or his work as a service to the ultimate reality will work with a very strong devotion.

I request all the readers to share ways they think that can be applied here. Just a mental activity for you.

29 Sep
Finance

Should you take education loan?

Education is one of the key aspect of a student’s life.  But many students are unable to study in good college because of financial limitations in their family. One of the finest solutions to this problem is education loan.

But students have doubt in their mind about whether to take education loan or not. So let’s look at points to be considered before getting education loan:

1. Salary after job –  Students should ask themselves whether their future salary would be able to repay the loan in five to eight years or as per their convenience.

What is the point of taking loan where your salary is almost getting used in paying loan.

2. Good financial condition – If family have good financial condition, then it is better to not take loan and pay unnecessary interest. In other words never take loan if your family can afford to pay for education without loans.

 Loan should be taken only to meet gap not fulfilled by family finances.

3. Unnecessary courses – Students should not choose a course just because loan is offered for the course.  Loan is secondary to course or college.

Students should first determine the course they want to enroll in. Then decide whether to take loan or not. It should not be other way.

4. Take rational decision – Many students and parents take loan just because their student is getting a prestigious college. But they forget to check the placement potential of the college.

Prestigious college do not guarantee good placements. Parents need to rationally research whether average annual package of college is good.  Never take loan just because student is getting a prestigious college. Never have college bias.

5. Tax benefits – Section 80E of income tax act provides deduction of interest in respect of loan for higher education in India or abroad.

Assessee get tax deduction of interest for 8 consecutive years.  It is important factor to consider and understand what will be the interest and resulting tax benefit of obtaining respective loan.

6. Never forget to check if your state government has launched any scheme for subsidy in education loan.

17 Sep
Philosophy

What is philosophy of Morality?

What is philosophy of morality?

Philosophy of ethics or morality explores fundamental questions regarding

– what is right or wrong,

– how to determine what is right or wrong ,

– do we need religion to practice ethics or morality and

– Is morality subjective or it exist objectively independent of human beliefs and opinions

Let’s discuss philosophy of morality with different perspectives given by different philosophers.

How to determine what is right or wrong

Immanuel Kant gave following principles and tests to determine what is right or wrong :

1. Universalizability – It means while doing an action, ask yourself whether it would be morally acceptable if everyone (whole world) were to act in same way in similar situation.

For example – If you want to lie, consider picture of a world where everyone would lie easily.

See whether this scenario is logically consistent or it leads to contradiction. You will see that if everyone lie in this world, lying would become ineffective because no one would believe each other. There will be distrust in society everywhere.

So, lying is ineffective as it cannot be consistently applied as universal law.  Hence it is immoral.

2. Principle of ends – Human should not be treated as a means to your end. They should be an end itself. Ask if your action affect dignity of individual for your own benefits. Treat everyone as a human. They all are individual consciousness. They are not means for your personal desires.

3. Rationality – Whether your actions are driven by rationality or your emotions. Moral actions should be done out of duty not for selfish reasons.

Do we need religion to practice morality

Wisdom is more important for morality than religion. Religion have set rules and principles that apply in certain context and circumstances. We cannot use them everywhere.

The problem in religious morality is that people blindly believe in it. People do not follow religion in parts. They follow everything. And that includes both right and wrong. It is ok if people use their judgement and follow good things from religion and discard the bad things. But people generally do not do this.  They believe that everything written in religious scripture is right and unquestionable.  

And that could be called as slave morality. And it becomes dangerous too. We know how many people have been killed in name of religion across the world.

Religious morality is sustainable only if people judge what is written in scriptures before practicing it.

Another problem with religion is that it becomes one’s identity. And that is the reason humans do not want to be free from it. Religion should be means to end but it generally becomes end to means.

A rational religious person should make humans as an end and religion as means not the other way.  

Is morality subjective or objective

Well! It’s a debatable issue. Let’s see what different philosophers said about this.

According to Immanuel Kant, morality is objective which apply universally to all beings. It does not depend on individual emotions or circumstances.

David Hume, who was a Scottish philosopher argued that morality is not result of reason or rationality. It is deeply grounded in human sentiments and emotions and it changes from culture to culture.

No one can reach any conclusion whether morality is subjective or objective.

We can just put our ideas which do not let us anywhere. But at least these ideas help us in developing our intellect.

Share your views in comments

10 Sep
Finance

Long term investment strategies – 1

The is a lot of buzz around the word “stock market”. After covid-19, many people entered the market hearing the buzz. But most of them suffered huge losses. Part of reason for such loss is investing for short term.

In order to create wealth, one need to invest for long term.

Here are some long term investment strategies.

Never chase daily price movement –  you are investing for long term. You need not to worry about daily share price fluctuations. If you are involved in daily price monitoring, you are wasting lot of time. Stock market is just our passive income source.

Instead you should invest your time in your own professional work so that you can earn more money from there and invest that in stock market. So focus on earning more.

If you earn more, you have more capital to invest in stock market.

Don’t be emotional and greedy – You should understand that investment decisions are never made in greed.

Decisions should be made based on data and logic. I have investment in 12 stocks. Once I had selected 2 stocks just on the basis of their past performance. Their financials were decent but their growth was extraordinary. I overlooked other factors and fallen for their extraordinary past growth. I invested heavily in these 2 stocks.  And the result was that, after 7 or 8 months, one of the company’s stock crashed to half of its original price. And it negatively affected my entire portfolio.

Now, I regret that those 2 stocks ruined my entire portfolio despite the fact that I had invested in other 10 stocks very carefully.

It is very important to prefer data and logic over greed.

Don’t fall for penny stocks – People think that this is penny stock of Rs 2. If it becomes even Rs 20, it will be 10x return. But that’s not the entire case. It can even fall to Rs 0.5.

Firstly you have to understand how share prices works. Consider 2 companies A ltd and B ltd.

A ltd has issued 10000 shares of Rs 1 each, total value being Rs 10,000.

 B ltd has issued 10 shares of Rs 1000 each. Its total value is also Rs. 10,000.

Now these two companies have same value of Rs 10,000. This 10,000 will grow. In your eyes, A ltd’s stocks are penny stocks while B ltd’s aren’t. But the fact is that both A lts and Bltd stocks have same value.

So it is not like A ltd’s Rs 1 will become Rs 100 and B ltd’s Rs 1000 will only become Rs 2000.

You should always invest as per data and logic, not as per price.

Ignore stock recommendation from friends and influencers.

You should stick to your own investment checklist no matter what your friends recommend. Even if you want to invest in your friend’s recommended stock, you should invest only after going through your own checklist.

Best is to ignore friends and influencer’s recommendations.

Yes if they have anything knowledgeable to share about market, then why not to increase our knowledge.

Learn more about investing – Two golden rules of investing