Here are the best things I am reading and thinking about this Saturday morning. But before that, here are the posts I published on the site this week, in case you missed any –

• Who Wants a 20% Annual Risk-Free Return?
• A Simple P/E Valuation Model that Works
• Nobody Knows What’s Going to Happen
• 20 Lessons on Starting Up

Krishnamurti on Meditation
Jiddu Krishnamurti was an Indian philosopher, speaker and writer, and one of the best teachers the country has produced. I have been inspired by his thoughts for long, especially on education and meditation. In fact, my initiation into the kind of meditation I practice now happened after reading Krishnamurti’s work.

I was recently re-reading his book Meditations, wherein he described what meditation is all about, and thought I must share that with you. Here is how he described the practice at a couple of instances in the book –

Meditation is one of the greatest arts in life, perhaps the greatest, and one cannot possibly learn it from anybody. That is the beauty of it. It has no technique and therefore no authority. When you learn about yourself, watch yourself, watch the way you walk, how you eat, what you say, the gossip, the hate, the jealousy, if you are aware of all that in yourself, without any choice, that is part of meditation. So meditation can take place when you are sitting on a bus or walking in the woods full of light and shadows, or listening to the singing of birds or looking at the face of your wife, husband or child.

Meditation cannot be learned from another. You must begin without knowing anything about it, and move from innocence to innocence. The soil in which the meditative mind can begin is the soil of everyday life, the strife, the pain and the fleeting joy. It must begin there and bring order, and from there, move endlessly. But if you are concerned only with making order, then that very order will bring about its own limitation, and the mind will be its prisoner. In all this movement, you must somehow begin from the other end, from the other shore, and not always be concerned with this shore or how to cross the river. You must take a plunge into the water, not knowing how to swim. And the beauty of meditation is that you never know where you are, where you are going, or what the end is.

On the question of how do you meditate, Krishnamurti answers that in Chapter 1 of his book On Education –

Krishnamurti: You know people talk a great deal about meditation, don’t they?

Student: They do.

Krishnamurti: You know nothing about it. I am glad. Because you know nothing about it, you can learn about it. It is like not knowing French or Latin or Italian. Because you do not know, you can learn, you can learn as though for the first time. Those people who already know what meditation is, they have to unlearn and then learn. You see the difference? Since you do not know what meditation is, let us learn about it. To learn about meditation, you have to see how your mind is working. You have to watch, as you watch a lizard going by, walking across the wall. You see all its four feet, how it sticks to the wall, and as you watch, you see all the movements. In the same way, watch your thinking. Do not correct it. Do not suppress it. Do not say, “All this is too difficult”. Just watch; now, this morning.

First of all sit absolutely still. Sit comfortably, cross your legs, sit absolutely still, close your eyes, and see if you can keep your eyes from moving. You understand? Your eye balls are apt to move, keep them completely quiet, for fun. Then, as you sit very quietly, find out what your thought is doing. Watch it as you watched the lizard. Watch thought, the way it runs, one thought after another. So you begin to learn, to observe.

Are you watching your thoughts – how one thought pursues another thought, thought saying, “This is a good thought, this is a bad thought”? When you go to bed at night, and when you walk, watch your thought. Just watch thought, do not correct it, and then you will learn the beginning of meditation. Now sit very quietly. Shut your eyes and see that the eyeballs do not move at all. Then watch your thoughts so that you learn. Once you begin to learn there is no end to learning.

Combine Krishnamurti’s thoughts with
Naval Ravikant’s thoughts on meditation, and you will have ample ideas to start the practice yourself, in case you were looking to do so.

In my personal experience, meditation has been a great tool to help me learn to be mindful, which is to be present and aware, moment by moment, regardless of circumstances. And when it comes to investing, I find mindfulness to be one of our best defenses against behavioural biases. Why?

You see, the stock market is by definition, anxiety-inducing. Ben Graham called stock price fluctuations represented by Mr. Market as manic depressive. Look at people trading inside dealing rooms. Or just look at the talking heads on business television and you will know what I’m talking about. Amidst this chaos, a state of mindfulness can help you put your mind in a healthier, more balanced and unemotional state.

• You won’t be worried about short term fluctuations in stock prices.
• You won’t act in haste or on impulse.
• You won’t be distracted by regrets of your past performance or worries about your future returns.
• You would keep yourself immune to the news and noise all around.
• You would try to do your best work in the present, with utmost focus and discipline.

These are all necessary attributes you need to achieve success as an investor. As Charlie Munger says –

A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success.

This is all what meditation and mindfulness can teach you, and much more. Try it to see for yourself.

A Few Stories You Shouldn’t Miss

• The Ladders of Wealth Creation (Nathan Barry)
• Inside Mark Zuckerberg’s Lost Notebook (Wired)
• Permanent Assumptions (Morgan Housel)
• Bill Ackman: The Failed Investment of JCPenney (
  Investor Talk)
• The Magic Formula for Financial Freedom (Market Watch)
• Why Everybody Needs An Inner Citadel (Ryan Holiday)
• We Should Fail Better (Barry Ritholtz)
• A Tale of Cooperation (Farmers Fable)
• How To Take Smart Notes (Forte Labs)

From My Inbox
Question – Nice post [on the P/E Valuation Model] but there is one confusion. Why you have taken Nestle P/E as 25x in 2030? Is it not the case that if the market is giving today 80x P/E to Nestle because of this business growth visibility then in 2030 also we should expect the same P/E and then the calculations will be changed? ~ Ashish

Answer – Thanks for asking, Ashish. I have used this multiple as an exercise in discipline, even though I know that many businesses would be worth a lot more than 25x earnings a decade from now, given their profitability and growth potential even beyond 10 years. However, the idea behind the above is to create a source of margin of safety, apart from the fact that I will do such an exercise only for high-quality businesses, that I know well about, and that I see doing profitable business over the next 10 years and beyond. So, a 25x multiple is just my way of being reasonable a decade from now.

You may take a higher multiple, but have your own reasons for doing so. Also know that, over time, all kind of businesses – even the best ones – would go through phases of maturity and decline and thus won’t command high multiples as they do now. I am not sure if Nestle would command 80x or 60x or 40x multiple in 2030. But all I know is that I must be reasonable in my assumptions, simply because that takes care of most uncertainty and adds to my margin of safety.

A Question for You
There may be someone in your life you may have wronged. If that’s the case, it may be an open wound for both parties. The only way for you to step forward and find closure is to apologize.

Ask yourself – To whom do I need to apologize?

That’s about it from me for today.

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Have a great weekend. Stay safe. Meditate.

With respect,
— Vishal

https://www.safalniveshak.com/power-of-meditation-life-investing/