In one of my blogs I had written that I am inspired by Howard Marks talk at Google. There he mentioned to go through a book called "Fooled by Randomness" which I have bought and going through.

In the last week I read Howard Marks's memo(oak tree capital) as it was heavily discussed on twitter. He primarily talked about growth and value investing. He openly talked about the time of Buffet and Graham when investing was more of defined way. The problem was actually in getting information. One of the ways that Mr. Buffet used was to go through countless pages of Moody's report. Initially he followed Cigar butt investing means buying companies far below from their liquidation price and then selling it once it reaches to that point.

The investment profession was far less sought among people. Valuation metrics developed by Graham and Dodd were being used. The heard had still not entered into direct equity research. With time  more and more people joined including PhDs in the race to become rich. As we entered into the internet era these information bias started reducing. Just imagine now you can get annual report of a company in than 5 minutes on your device. You can have all the metrics at an instant like EPS, ROCE, ROE, Debtor days, Inventory turnover. This is a common practice among value investors to apply DCF method to reach some intrinsic value. Usually investors also apply some other methods.

In the 20th century, investment was primary taken as value investing means investing in companies with moat, capital and stability. Most of the investors followed that approach and made tons of money. Then we had internet boom and with time we have the concept of growth investing getting popular means investing in companies which promise a higher growth rate. Most of the people had stayed away from tech companies in the early decade of 2000. However later on Mr. Buffet bought Apple and it is doing really well.

Howard Marks also displayed a chat between him and his son. I must say this time its a bit different. Investing is not just finding companies with decades of track record . I think the better way will be to put money in NIFTY 50(NSE) and S&P 500 as they with time take care of the changes in growth Vs. value stocks whatever it will be.

The big will get bigger. OK. HOW?

In the coming decade, investing is going to be more fun. It will be primarily about making good judgements and foreseeing the future without forgetting the past. Really software is eating the world. But it doesn't means that we will drink and eat software and will travel on software. At present I am trying to develop my mental model to make my mind open, clear and always curious.

One thing will definitely not change is PATIENCE. If you think that your company is going to be worthy much more in future, do you have the conviction to buy and hold it when there is no  clear track record and  also uncertainty in future and noise in the media?

At last, something that really excited me was mention of Bitcoin. He is still skeptical of crypto currency but openly admits that his son hold some for the family. Please go and read his memo. Its worth your time if you are in investing world.

Its time to be more curious and more skeptical.