New Delhi to New York. ✈️

Naval Ravikant has built a loyal fan base by sharing classic wisdom with a mix of science and rationality. It is very unlikely to hear an investor talk about everything but markets. Naval is not just famous for his investment advice; he also calls himself a modern-day philosopher and has shared tremendous amounts of wisdom through his Twitter storm and through interviews. The tweetstorm that he did back in 2018 on getting rich without getting lucky attracted a lot of attention. As of March 2023, Naval Ravikant had a staggering net worth of $70 million. As a kid who faced food issues, for him to be one of the wealthiest Americans has got to be one hell of a journey.

Uber, Twitter, Postmates, Open DNS, and the list goes on. These super companies are investments made by Naval at a time when no one had heard about them. More than his investment lessons, Naval is famous for his life lessons. In one of his tweets, he mentioned that happiness is a skill. It is the sense that nothing is missing. And he's right. However, an investor talking about happiness and other philosophies is not something you would come across every day. While every quote from his tweetstorm and the beautifully organized compilation of his words in "The Almanack of Naval Ravikant" radiate wisdom and inspiration, here is a list of 10 amazing things that have taught me a great deal:

1. "You will get rich by giving society what it wants but does not yet know how to get. At scale." - Money is an IOU from society. "You did something good in the past. Now here's something that we owe you for the future." And so, society will pay you for creating things that they want. Almost everything that we use in our house, in our workspace, and on the streets used to be technology at one point in time. There was a time when oil was a technology that made John D. Rockefeller rich. There was a time when automobiles were a technology that made Henry Ford rich. Figure out what product you can provide, and then figure out ways to scale it.

Back in January 2023, when I started my consulting and money management business, I found out that the average Joe in India had the willingness to invest but was scared because of scams and insufficient knowledge. That's when I thought about a business, which luckily turned out to be favorable. Naval says that entrepreneurship is a job in which you try to predict what society will want while simultaneously figuring out ways to scale it.

2. "If you can't see working with someone for life, don't work with them for a day." - As simple as it gets. We all have a finite number of years to live on this beautiful planet. Working with someone you don't admire or don't understand won't take you far. That doesn't mean that the person you are discarding to work with is inferior to you, nor are you superior. It simply means that you just can't match the right wavelength with that person. This might be because of upbringing, different values and principles, etc. Mohnish Pabrai, a renowned value investor, has a very unique philosophy for this. He says that if people know how long they are going to live on this plant, they will stop doing things that they don't like and actually start living. In an interview with LBS, he said, "An average American lives for 70 years. I don't indulge in substances and regularly workout. That means my probability of dying at 70 is less than that of an average American. Let's say I live until I turn 80; that means I only have 22 years left. Why would I spend those precious 22 years doing something I don't like with people I don't admire"?

3. "Everyone is trying to lead but someone has to follow." -  Mohnish Pabrai suits best for explaining this quote. As I earlier mentioned, he is a renowned value investor. What I didn't mention was that he is called the famous "Copycat investor". Mohnish was traveling from London to the US when he read about Mr. Buffett. Muffett's ideology and philosophies inspired him to read more about Warren. For the next few years, he studied Buffett and allocated his capital the Buffett way. He compounded his money by 50% for a few years. After converting his million dollars into $13 million, Mr. Pabrai thought about doing this business full-time. When he was setting up a partnership, he took out the biography of Buffett called "The Snowball" and copied his investment partnership rules, which, to his surprise, no one in the industry was following.

He didn't invest in companies where Buffett invested. He simply copied his philosophy and minted money. As of March 2023, his net worth stood at $1.8 billion. He calls himself "the shameless cloner". Copying someone's idea is something that is looked down upon in our society. If Mohnish had cared about society's opinion, he wouldn't have made those billions.

4. "Play long-term game with long-term people. All returns in life, whether in wealth, relationships or knowledge, come from compounding." -  In his 75 years of life, Einstein said many things, of which I understood only one. "Compounding is the 8th wonder of the world". Some things in life are like intra-day trading. You quickly trade and get out of the security. Some are like short-term trades, where you take delivery of shares and hold them for a few months. The thing with these short-term trades is that your conviction might blow up. On the contrary, you are almost always sure that you will earn handsomely in the long term, provided you have researched well. Even when it comes to relationships with somebody for a while, whether it's business or personal, life gets easier because you know that person has your back. You don't have to keep asking questions. 

5. "Become the best in the world at what you do." - Whether it is investing or your personal life, diversification won't get you the desired results. You would definitely decrease the risk, but you would force the returns to drop as well. I have said this before and will say it till the end: specialization is the key. When we look around, we can find a number of examples that shout out the benefits of specialization. The most prominent would-be Coca-Cola and Bisleri. Whenever you think about a soft drink or a bottle of water, there is a high chance that you think about the brand itself. This was because of specialization. They specialized in one business, and now they own the markets. On the contrary, if I say Mahindra group, what comes to mind would differ from what I might think. This is because of overdiversification. Legends have said it. Inch wide and a mile deep.

6. "Seek wealth, not money or status. Wealth earns while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy." - Wealth is what you want. Wealth is an asset that you earn while you sleep. Wealth is the factory, the robots, that's cranking out things. Wealth is the computer program that's running at night and that's serving other customers. Wealth is even money in the bank that is being reinvented into other assets and into other businesses. Even a house can be a form of wealth because you can rent it out, although that's probably a lower use of land productivity than doing some commercial enterprise. The true definition of wealth is much more than just businesses and assets that you can earn while sleeping like a baby. Wealth can buy freedom. It's not to buy fur coats, drive Ferraris, sail yachts, or jet around the world in your Gulfstream. Money is how we transfer wealth. Money is social credit. It is the ability to have credits and debits for other people's time. If I do my job right, if I create value for society, society says, "Oh, thank you. We owe you something in the future for the work you did in the past. Here's a little IOU. Let's call that money." 

7. "Happiness if being satisfied with what you have. Success comes from dissatisfaction. Choose!" -  Naval says, "Whatever happiness means to me, it means something different to you. I think it's very important to explore what these definitions are. My definition keeps evolving. The answer I would have given you a year ago will be different from what I tell you now. Today, I believe happiness is really a default state. Happiness is when you remove the sense of something missing from your life. Happiness is a state where nothing is impossible. When nothing is missing, your mind shuts down and stops running into the past or future to regret something or to plan something. People mistakenly believe happiness is just positive thoughts and positive actions. The more I've read, the more I've learned, and the more I've experienced, every positive thought essentially holds within it a negative thought. One can be very happy as long as one isn't too caught up in their own head." Think about it.

With that, I have nothing left to add. "The Almanack of Naval Ravikant" is must-read. It is rare to find a book that encapsulates lessons from different fields into one. The only other book that I can think of that has the same qualities is the Bhagvat Gita. Ahh, I have my next blog idea.

Happy Investing.