Letters from a self-made merchant to his son – 2

This is the 2nd part of my notes from the book “Letters from a self-made merchant to his son”. You could read the first part here.

Graham on the art of selling:

A salesman has to talk, but before that he ought to know when to talk.

A real salesman is one-part talk and nine-parts judgment; and he uses the nine-parts of judgment to tell when to use the one-part of talk.”

Never badmouth competition, never give up your dignity. Yet, be humble enough to sell.

Never run down your competitor’s brand to them, and never let them run down yours. Don’t get on your knees for business, but don’t hold your nose so high in the air that an order can travel under it without your seeing it. You’ll meet a good many people on the road that you won’t like, but the house needs their business.”

3 steps to making it big in sales.

First—Send us Orders. Second—More Orders. Third—Big Orders.

Continue reading

Letters from a self-made merchant to his son – 1

Recently, I casually picked up a free Kindle copy of “Letters from a Self-Made Merchant to His Son” when I was feeling bored. Boy, I kept it down only after I finished it.

It’s a brilliant book – witty, simple, wordly advice from a wealthy father (Howard Graham of Graham & co, a meat packing company) to his son Pierrepont. It covers nearly everything that a man goes through in his life – management, business, money, education, college, women, love, work, speculation, etc. Most of it is solid advice applicable even today.

I realized late that this was actually written by George Horace Lorimer and there never was any Howard Graham. Still, every page is realistic and on the money.

Must read!

Continue reading

Books I’ve liked: Personal finance, investing & entrepreneurship

Every now and then, a friend asks me for a book recommendation, especially on personal finance, entrepreneurship and investing. Not because am an investing guru (which I am not), but because I read a ton of them!

I thought I will note it down here as well.

All these are books that I have read and liked a lot.

Few like One up on Wall street gave me the confidence that I too can be an investor in the stock market, which until then was crocodile infested space to me. Few like Intelligent Investor have been a huge huge help on almost everything finance. Few like Where are the customers yachts? changed my opinion on the stock market quite abruptly and changed my style of investing drastically.

And yet, few like Richest man in Babylon made me realize that simplicity and a principled method matters. A few like Extraordinary popular delusions helped me stay away from making costly mistakes.

Perhaps, there have been a few that have led me astray as well. Rich dad poor dad? Could be!

Continue reading

The family just got bigger

News!

My family just got bigger! The additions are a Mr Nikkor 10-24 and a Ms SB600.

Recently I decided to take my photography even more seriously. But photography skills are not sold on Adorama, Amazon or flipkart. They sell only equipment and books.

So I did the quickest and easiest thing I could. I bought new gear! Yay!

And, I have more coming my way soon, esp if my trip to the US happens (May)

  • Manfrotto / Gitzo tripod – mostly a 055xProB with a 498RC2
  • Nikon ML-L3
  • Circular polarizer
  • GND filter
  • A telephoto length macro lens
  • SU-800 commander
  • Light meter
  • 2nd speedlight
  • misc stuff

Does it make me a better photographer? Nay! Its the same old baggage behind the camera… perhaps more confused now with more gear.

Now, to add more knowledge to handle this additional stuff, I have purchased a few books.

  1. Light – science and magic by Fil Hunter, Steven Biver, Paul Fuqua
  2. Photographer’s eye by Michael Freeman
  3. The Hot Shoe Diaries: Big Light from Small Flashes by Joe Mcnally
  4. Creative Composition: Digital Photography Tips & Techniques by Harold Davis
  5. few more from this list

I know there are those who don’t read books so as not to get influenced by other’s style… to maintain their individuality.. blah blah, I don’t give it a blink. As long as I improve my skills, I am fine.

Whether the gear and books will help me gain knowledge is another question. And whether the knowledge will help me gain better skills is yet another question. And whether the skills will help me take good photos is yet another question. I will conveniently not talk about them.. at least for now.

Now, before anyone bats an eyelid about the cost…

  • yeah, its a big hole in my smallish pocket
  • if I invest it somewhere and let it compound for many many years, my daughter will have a few lakhs more as her inheritance (will help her buy her Nikon stuff maybe). But hey, I would expect her to support herself fully beyond her higher education!
  • I let all my personal finance learning over the years out of the window… and just let my heart follow a passion! You gotta break rules at times!
  • opens up a lot of areas for me, which may (or may not) be a great help over the next few years
  • I feel it is more of an investment than an expense (too nascent maybe)
  • my savings is still in pink health (maybe its just me dreaming… )

For those that are inclined towards psychological explanations and behaviour patterns, there is a better explanation of such acts. Read more about it here.

PS: If you are a photography enthusiast, let me know what you are secretively planning for, to buy next! (And pray that your spouse doesn’t read about it)

The Go-Getter: A Story That Tells You How to Be One

More than 85 years old. Less than 85 pages.And the story sounds dumb as you are half way through. But when you keep the book down, you cant deny that it was really inspiring.

Thats Go-Getter, a fantastic book written in the 1920s.

Its a small book (and the mother of all fable based business books like Who moved my cheese?) that I finished in one sitting flat. It talks about being a go-getter. The attitude and qualities that you have to have to be a go-getter.

It cost me only Rs 100.

PS: You may not like the book until the first half is over. So I suggest that you dont keep the book after reading a few pages. Its only when the story is over, you realize how valuable the lessons in it are.

The richest man in Babylon

I am reading the 1920s classic, “The richest man in Babylon“. I liked the book. It is full of simple wisdom that is so difficult to notice these days. I liked the simplicity of the book. I would recommend this book to anyone.

In fact, I think this book could have been the inspiration for books like “The wealthy barber” and “Rich dad poor dad”.

Here are excerpts from 2 of my favorite chapters.

Seven cures for a lean purse

Step 1: Start Thy Purse to Fattening.
For each ten coins you earn, spend only nine.

Step 2: Control Thy Expenditures
Budget your expenses that you may have coins to pay for your necessities, pay foryour enjoyments and gratify your worthwhile desires without spending more thannine-tenths of your earnings.

Step 3: Make Thy Gold Multiply
Put each coin to labor so that it may reproduce its kind.

Step 4: Guard Thy Treasures from Loss
Guard your treasures from loss by investing only where the principal is safe, where itmay be reclaimed if you desire so, and where you will not fail to collect a fair rental.

Step 5: Make of Thy Dwelling a Profitable Investment
Own your own home.

Step 6: Insure a Future Income
Provide in advance for the needs of your growing age and the needs of your family.

Step 7: Increase Thy Ability to Earn
Cultivate your own powers, study and become wiser, become more skillful, andrespect yourself.

The five laws of gold

1. The First Law of Gold
“Gold cometh gladly and in increasing quantity to any man who will put by not lessthan one-tenth of his earnings to create an estate for his future and that of his family.”

2. The Second Law of Gold
“Gold laboreth diligently and contentedly for the wise owner who finds for it profitableemployment, multiplying even as the flocks of the field.”

3. The Third Law of Gold
“Gold clingeth to the protection of the cautious owner who invests it under the adviceof men in its handling.”

4. The Fourth Law of Gold
“Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.”

5. The Fifth Law of Gold
“Gold flees the man who would force it to impossible earnings or who followeth thealluring advice of tricksters and schemers or who trusts it to this own inexperienceand romantic desires in investment.”

Conservative investors sleep well !! Good book!!!

I just finished “Conservative Investors sleep well”  by Phil Fisher. (It is also sold as part of “Common Stocks and uncommon profits”). Its really very good and I enjoyed it a lot. Here is a brief on it.

Fisher talks about Four dimensions of conservative investing.

1. First dimension

Excellence in the following activities

A. Low cost operation. (High profit margins)

B. Stong marketing organisation.

C. Strong research and technical efforts.

D. Good financial skills.

And of course the skill to integrate all of this in the right mix.

2. Second dimension.

This is the people factor. Competent management and good labour force make all the difference. Fisher also talks about 3 elements needed with regards to this dimension. They are

1. Managements need to realize that the world is changing fast.

2. Take efforts to make the employees feel that their co is a good place to work for.

3. Orientation towards sound & long range growth.

3. Third dimension

These are the characteristics that make the business favorable as a conservative investment. They are

1. Profitability.

This can be expressed in ROIC and OPM. But also the sales turnover is also an important consideration.

2. Economies of scale.

3. Market leader in sales and high OPM

4. Multidisciplinary technology development

5. Well marketed products that have become habit buying now

6. Extremely high ROIC is also a danger, says Fisher as it might attract a lot of new people to start business thereby reducing profits.

4. Fourth dimension.

This dimension talks about how the Financial community

1. values an industry

2. values a company

3. values stocks in general.

A stock price is not only what the financial community thinks of the company, but also of the industry and also of stock picking in general. During a time when the industry is viewed negatively, even a good company would be valued low. And during times when stocks as a whole are considered as bad investments, again, stocks of such companies would be cheap.

This is only a very brief gist. Please do take the time to read this fantastic book.