You can read Part 1 of this interview here.
Dev: As a long-term investor, how should one control oneself to not to panic? Also, when should one panic (say, panic to buy more when markets falls a lot)?
- There are two rules of investing: #1: Don’t lose money. #2: Don’t forget rule #1. – Warren Buffett
- I will tell you how to become rich: Be fearful when others are greedy, and be greedy when others are fearful. – Warren Buffett
- An investment in knowledge pays the best interest. – Ben Franklin
- Just practice diligently and you will do very well. – Johann Sebastian Bach
- And the one thing that all those winner bettors in the whole history of people who’ve beaten the pari-mutuel system have is quite simple. They bet very seldom. – Charlie Munger
- It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it – who look and sift the world for a mispriced bet – that they can occasionally find one. – Charlie Munger (an extension from the previous quote).
- Warren Buffett’s letters (not a book, but must reads. Excellent for developing your investment process as well. Larry Cunningham wrote a book summarizing these letters also)
- The Snowball
- The Intelligent Investor
- Anything by Mark Twain (I don’t read much fiction, but Mark Twain books are excellent, and indirectly have a lot of discussion on general human behavior)
- You Can Be a Stock Market Genius by Joel Greenblatt (bad title, as many have pointed out, but an excellent book on developing a process for special situation investing).
Ben Graham made 20% per year buying bargains, and then happened across GEICO, which made him very wealthy. He had many base hits, and one home run. But the home run wasn’t necessary to produce.
Dev: That’s all from my side John. I thank you for answering my questions. It was wonderful to have you share your insights.
John: Thanks Dev.