Value Investing

Sanjay Bakshi – BFBV: Opening Remarks

Sanjay Bakshi – BFBV: Opening Remarks

About three weeks ago, I posted a philosophical tweet about equanimity — the need for people to treat gains and losses, triumphs and disasters, just the same — and why that deep insight is important not just for investing but also for life.

Sanjay Bakshi - BFBV

One of my followers on Twitter asked me a question.
Sanjay Bakshi - BFBV

My response to that question was
Sanjay Bakshi - BFBV

BFBV is a course on philosophy. My objective is to make you a worldly wise man or woman. I suspect this will happen slowly during this course. However, I expect the pace to gather momentum over the years as you relate your life’s experiences after you leave MDI to the main ideas that you will encounter here in BFBV.

Why is this course being offered by the Finance department? There are three reasons.

One, MDI does not have a Philosophy department.

Two, I needed an excuse to teach you something that I think is far more valuable than just how to make money by buying and selling securities and I think you’ll agree that it’s much more likely for me persuade MDI to let me teach you BFBV — although that wasn’t easy — than to create a Department of Philosophy.

Finally, making money by operating intelligently in financial markets is a subset of being a wise person. How could it be otherwise?

I believe that you really cannot understand how the world truly works unless you have financial independence. Many of you don’t have that independence today and indeed have taken loans to fund your MBA. If that’s true for you, then you really do need a job which promises a salary that will help you pay off your loans and, over time, make you financially independent.

Then imagine that a tobacco company makes a lucrative job offer to you. Should you decline it if that’s the only offer on the table? Probably not. But what if you were financially independent and didn’t really need to work for money? Would you decline the same job which requires you to market tobacco products? Possibly yes. And you may reason along the following lines:

Look, I don’t need to do this. I am financially independent. Why should I get involved in something that’s not good for civilization? Why should I be part of a business which causes so much misery?

You see, financial independence changes everything. It enables you to look at reality in a truly unbiased manner.

Upton Sinclair was right when he said that

it’s hard for a man to understand something when his salary depends upon his not understanding it.

And so while my objective is to make you wise, one of the means of achieving that objective is to teach you how to become financially independent.

BFBV, then, is an excuse — a conduit — for teaching something that should be very important to you. I agree with Munger when he says:

I think it’s a huge mistake not to absorb elementary worldly wisdom if you’re capable of doing it because it makes you better able to serve others, it makes you better able to serve yourself, and it makes life more fun. So if you have an aptitude for doing it, I think you’d be crazy not to. Your life will be enriched – not only financially, but in a host of other ways – if you do.

Teaching BFBV is also very important to ME for a selfish reason as once stated by William Glasser:

We learn…

10% of what we read 20% of what we hear 30% of what we see
[drizzle]
50% of what we both hear and see 70% of what is discussed 80% of what we experience personally 95% of what we teach to someone else
See the full PDF here.

[/drizzle]