What you should be reading: #6 January 2022 – Good reads – Trading Q&A by Zerodha

1. The pursuit of monopoly

“Stock markets are a great business. They are the best business network, and they are leaders in this category. Before there were social networks, and even before payments networks, there were stock exchanges. The particular case of the New York Stock Exchange is particularly fascinating. It’s a great story from fragmentation to monopoly to retail to monopoly.

2. Many worlds are enough

You may have set some goals to save X amount for thing Y. But when that finish line approaches, we are never sure if X is enough and we want to push that line even further.

The question of sufficiency does not seem to have an answer. People have tried to quantify it with complex formulas, but you can’t apply mathematics to what is really a question of philosophy.”

How do we resolve the tension that arises when we set future goals based on today’s desires? How do we deal with the fact that when we’ve had enough, we’re no longer the person we once wanted? Is it inevitable that enough will always turn out, or can we get past this?

This post is a great deep dive into elusive enough. Not through the lens of numbers, but through the lens of personal identity.

3. Silver Thursday: How the Hunt Brothers Besieged the World’s Silver Market and Then Lost It All

In 1980, brothers Hunt Bunker, Herbert and other members of the Hunt clan owned approximately two-thirds of all privately owned silver on the land. But the historical hoarding of bullion was not a ploy to manipulate the market. Instead, it was the voracious inflation hedge of the 1970s, which they and their legal team would insist in the following years.

Whatever the motive, it was a historically bad bet. The debt-fueled boom and bust in the global silver market not only wiped out Hunt’s fortune, but also threatened to destroy the American financial system.

  • The Silver Thursday panic occurred more than 35 years ago, but it still raises questions about the nature of financial manipulation.

  • From a spot price of about $6 an ounce in early 1979, the price of silver rose to $50.42 in January of 1980. In the same week, silver futures were trading at $46.80. Film companies such as Kodak saw the costs as too much, while the British film producer, Ilford, was forced to lay off workers.

  • After the oil crash of the early 1980s and a series of lawsuits that brought down what remained of the Hunt brothers’ historic fortune, the two declared bankruptcy in 1988. Under $10 million in his name.

4. Inside “The Greatest Trade of All Time” by Bill Ackman

Hedge fund manager Bill Ackman is celebrated and ridiculed for his confidence and tenacity when it comes to betting big on a few positions. His ‘all or nothing’ approach has led to some of the investment world’s greatest and most insightful calls – and some of its biggest meltdowns.

That $27 million bet he placed at the start of COVID-19 earned him $2.6 billion and was hailed in an editorial in the New York Times as perhaps “the best single deal ever.”

5. The Long vs. Short Game

  • Why you need to focus on the long road to success: In the game of exaggerated ratings and intense hero branding overnight, it is essential to focus on businesses that can be built over the long term, forever.

  • The importance of consistency and continuity: When you choose between what’s right and what’s appropriate, it eases your effort into building a long-term business. Doing the right thing is the constant right decision to make in every difficult challenge. Constant awareness of the bigger picture is critical.

  • The downside of the short game and how to become an obsession: you will have to constantly look for new games after the previous players and new after the old etc. This drains your ability to make long-term decision-making along with productivity.

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