You couldn’t miss Mano at an AGM. He was always one of the first shareholders to seek clarification. While some of his questions left me puzzled, I appreciated his overall inquisitiveness.
I chanced upon his book and decided to give it a read. It’s a fantastic book, especially for investment newbies. The ideas aren’t groundbreaking, but Mano skilfully weaved them together into a coherent and engaging narrative.
There are many learning points from the book, but those that caught my attention comes from “Chapter 5: How and What to Invest In”. Here are my five takeaways.
Combine Common Sense with Critical Thinking
“This combination is important because, without critical thinking, common sense can easily lapse into common stupidity – mindlessly believing something just because the crowd believes in it.”
This is especially true in today’s information-overloaded world, where opinions and facts are often blur. Critical thinking prompts us to question assumptions and assess the credibility of the information, allowing us to make sound judgement.
On the other hand, having critical thinking without common sense, might result in over-analysing and miss out practical considerations.
Cultivate Emotional Discipline
“The reason why most people buy high and sell low is that they cannot control the twin beasts of greed and fear within their human psyche.”
If you are in the market long enough, you would have experienced both greed and fear. Even with over two decades in the market, I could still feel their pull at me.
Mindfulness has taught me that the key is not to avoid these emotions, but to recognise and regulate them. This emotional discipline is a cornerstone of long-term investment success.
Invest at Part of A Holistic Financial Plan
“While investing is probably the sexiest and most exciting of our financial endeavours, remember that it is just one part of a financial framework that keeps us on solid ground.”
I associate this with asset allocation. This is often the neglected part of our financial plan. Beyond investing, it is necessary to consider cash, fixed income and insurance in our financial plan. They formed the foundations, allowing investment to help us grow out wealth.
Know What You Are Doing
“In investing, not doing your homework is likely to have a more serious repercussions.”
“Cut down on Korean drama serials or English Premier League highlights and squeeze in 30 minutes on a weeknight to peruse the business news on an investment website or book.”
There’s not two ways around it. To do well in investing (or anything), it takes effort. Time must be spent to have a basic understanding of the businesses, their leadership and the reported numbers.
Looking back, that was what I did. It’s only in recent years that I subscribed to Netflix and watched K-dramas. I remembered telling my spouse that I was probably a decade late in “chasing” K-dramas. Time, squeezed out after family and work, was dedicated to learning about investing and the companies I invested in.
Are These Guys Capable?
“I found a common thread running through the leaders of winning companies, which was that they were all gifted problem-solvers.”
Based on personal experience and observations, a strong management team with an aligned purpose, is the key in making an organisation exceptional.
This does not contradict the thinking that no one is indispensable. Any organisation with strong structure and systems will do well (for some time), even under mediocre leadership. But it is the catalytic influence of exceptional leadership that propels an organization to greater heights.
These leaders inspire and create a culture of high performance, ultimately determining an organization’s long-term success.
Highly Recommended
As mentioned, the books offers many valuable insights. The following are some other chapters of his book:
- The Three Prongs of Financial Planning
- Routes to Financial Independence
- Property and REITs
- Common Sense Stock Valuation
I wholeheartedly recommend this book and awarded it a five-star rating. It’s conveniently available for eBook loans from the National Library.
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