Sunday, November 29, 2015

The myth of the teen brain

The Myth of the Teen Brain [Preview]

Its not only in newspaper headlines--its even on magazine covers. TIME, U.S. News & World Report and even Scientific American Mind have all run cover stories proclaiming that an incompletely developed brain accounts for the emotional problems and irresponsible behavior of teenagers. The assertion is driven by various studies of brain activity and anatomy in teens. Imaging studies sometimes show, for example, that teens and adults use their brains somewhat differently when performing certain tasks.

As a longtime researcher in psychology and a sometime teacher of courses on research methods and statistics, I have become increasingly concerned about how such studies are being interpreted. Although imaging technology has shed interesting new light on brain activity, it is dangerous to presume that snapshots of activity in certain regions of the brain necessarily provide useful information about the causes of thought, feeling and behavior.

Automatically assuming that the brain causes behavior is problematic because we know that an individuals genes and environmental history--and even his or her own behavior--mold the brain over time. There is clear evidence that any unique features that may exist in the brains of teens--to the limited extent that such features exist--are the result of social influences rather than the cause of teen turmoil. As you will see, a careful look at relevant data shows that the teen brain we read about in the headlines--the immature brain that supposedly causes teen problems--is nothing more than a myth.

Cultural Considerations
The teen brain fits conveniently into a larger myth, namely, that teens are inherently incompetent and irresponsible. Psychologist G. Stanley Hall launched this myth in 1904 with the publication of his landmark two-volume book Adolescence. Hall was misled both by the turmoil of his times and by a popular theory from biology that later proved faulty. He witnessed an exploding industrial revolution and massive immigration that put hundreds of thousands of young people onto the streets of Americas burgeoning cities. Hall never looked beyond those streets in formulating his theories about teens, in part because he believed in "recapitulation"--a theory from biology that asserted that individual development (ontogeny) mimicked evolutionary development (phylogeny). To Hall, adolescence was the necessary and inevitable reenactment of a "savage, pigmoid" stage of human evolution. By the 1930s recapitulation theory was completely discredited in biology, but some psychologists and the general public never got the message. Many still believe, consistent with Halls assertion, that teen turmoil is an inevitable part of human development.

Today teens in the U.S. and some other Westernized nations do display some signs of distress. The peak age for arrest in the U.S. for most crimes has long been 18; for some crimes, such as arson, the peak comes much earlier. On average, American parents and teens tend to be in conflict with one another 20 times a month--an extremely high figure indicative of great pain on both sides. An extensive study conducted in 2004 suggests that 18 is the peak age for depression among people 18 and older in this country. Drug use by teens, both legal and illegal, is clearly a problem here, and suicide is the third leading cause of death among U.S. teens. Prompted by a rash of deadly school shootings over the past decade, many American high schools now resemble prisons, with guards, metal detectors and video monitoring systems, and the high school dropout rate is nearly 50 percent among minorities in large U.S. cities.

But are such problems truly inevitable? If the turmoil-generating "teen brain" were a universal developmental phenomenon, we would presumably find turmoil of this kind around the world. Do we?

In 1991 anthropologist Alice Schlegel of the University of Arizona and Herbert Barry III, a psychologist at the University of Pittsburgh, reviewed research on teens in 186 preindustrial societies. Among the important conclusions they drew about these societies: about 60 percent had no word for "adolescence," teens spent almost all their time with adults, teens showed almost no signs of psychopathology, and antisocial behavior in young males was completely absent in more than half these cultures and extremely mild in cultures in which it did occur.

Even more significant, a series of long-term studies set in motion in the 1980s by anthropologists Beatrice Whiting and John Whiting of Harvard University suggests that teen trouble begins to appear in other cultures soon after the introduction of certain Western influences, especially Western-style schooling, television programs and movies. Delinquency was not an issue among the Inuit people of Victoria Island, Canada, for example, until TV arrived in 1980. By 1988 the Inuit had created their first permanent police station to try to cope with the new problem.

Consistent with these modern observations, many historians note that through most of recorded human history the teen years were a relatively peaceful time of transition to adulthood. Teens were not trying to break away from adults; rather they were learning to become adults. Some historians, such as Hugh Cunningham of the University of Kent in England and Marc Kleijwegt of the University of WisconsinMadison, author of Ancient Youth: The Ambiguity of Youth and the Absence of Adolescence in Greco-Roman Society (J. C. Gieben, 1991), suggest that the tumultuous period we call adolescence is a very recent phenomenon--not much more than a century old.

My own recent research, viewed in combination with many other studies from anthropology, psychology, sociology, history and other disciplines, suggests the turmoil we see among teens in the U.S. is the result of what I call the "artificial extension of childhood" past the onset of puberty. Over the past century, we have increasingly infantilized our young, treating older and older people as children while also isolating them from adults and passing laws to restrict their behavior [see box on next page]. Surveys I have conducted show that teens in the U.S. are subjected to more than 10 times as many restrictions as are mainstream adults, twice as many restrictions as active-duty U.S. Marines, and even twice as many restrictions as incarcerated felons. And research I conducted with Diane Dumas as part of her dissertation research at the California School of Professional Psychology shows a positive correlation between the extent to which teens are infantilized and the extent to which they display signs of psychopathology.

The headlines notwithstanding, there is no question that teen turmoil is not inevitable. It is a creation of modern culture, pure and simple--and so, it would appear, is the brain of the troubled teen.

Dissecting Brain Studies
A variety of recent research--most of it conducted using magnetic resonance imaging (MRI) technology--is said to show the existence of a teen brain. Studies by Beatriz Luna of the Laboratory of Neurocognitive Development at the University of Pittsburgh, for example, are said to show that teens use prefrontal cortical resources differently than adults do. Susan F. Tapert of the University of California, San Diego, found that for certain memory tasks, teens use smaller areas of the cortex than adults do. An electroencephalogram (EEG) study by Irwin Feinberg and his colleagues at the University of California, Davis, shows that delta-wave activity during sleep declines in the early teen years. Jay N. Giedd of the Child Psychiatry Branch at the National Institute of Mental Health and other researchers suggest that the decline in delta-wave activity might be related to synaptic pruning--a reduction in the number of interconnections among neurons.

This work seems to support the idea of the teen brain we see in the headlines until we realize two things. First, most of the brain changes that are observed during the teen years lie on a continuum of changes that take place over much of our lives. For example, a 1993 study by Jsus Pujol and his colleagues at the Autonomous University of Barcelona looked at changes in the corpus callosum--a massive structure that connects the two sides of the brain--over a two-year period with individuals between 11 and 61 years old. They found that although the rate of growth declined as people aged, this structure still grew by about 4 percent each year in people in their 40s (compared with a growth rate of 29 percent in their youngest subjects). Other studies, conducted by researchers such as Elizabeth Sowell of the University of California, Los Angeles, show that gray matter in the brain continues to disappear from childhood well into adulthood.

Second, I have not been able to find even a single study that establishes a causal relation between the properties of the brain being examined and the problems we see in teens. By their very nature, imaging studies are correlational, showing simply that activity in the brain is associated with certain behaviors or emotions. As we learn in elementary statistics courses, correlation does not even imply causation. In that sense, no imaging study could possibly identify the brain as a causal agent, no matter what areas of the brain were being observed.

Is it ever legitimate to say that human behavior is caused by brain anatomy or activity? In his 1998 book Blaming the Brain, Elliot S. Valenstein, now psychology professor emeritus at the University of Michigan at Ann Arbor, deftly points out that we make a serious error of logic when we blame almost any behavior on the brain--especially when drawing conclusions from brain-scanning studies. Without doubt, all behavior and emotion must somehow be reflected (or "encoded") in brain structure and activity; if someone is impulsive or lethargic or depressed, for example, his or her brain must be wired to reflect those behaviors. But that wiring (speaking loosely) is not necessarily the cause of that behavior or emotion.

Considerable research shows that a persons emotions and behaviors continuously change brain anatomy and physiology. Stress creates hypersensitivity in dopamine-producing neurons that persists even after they are removed from the brain. Enriched environments produce more neuronal connections. For that matter, meditation, diet, exercise, studying and virtually all other activities alter the brain, and a new study shows that smoking produces brain changes similar to those produced in animals given heroin, cocaine or other addictive drugs. So if teens are in turmoil, we will necessarily find some corresponding chemical, electrical or anatomical properties in the brain. But did the brain cause the turmoil, or did the turmoil alter the brain? Or did some other factors--such as the way our culture treats its teens--cause both the turmoil and the corresponding brain properties?

Unfortunately, news reports--and even the researchers themselves--often get carried away when interpreting brain studies. For instance, a 2004 study conducted by James Bjork and his colleagues at the National Institute on Alcohol Abuse and Alcoholism, at Stanford University and at the Catholic University of America was said in various media reports to have identified the biological roots of teen laziness. In the actual study, 12 young people (ages 12 to 17) and 12 somewhat older people (ages 22 to 28) were monitored with an MRI device while performing a simple task that could earn them money. They were told to press a button after a short anticipation period (about two seconds) following the brief display of a symbol on a small mirror in front of their eyes. Some symbols indicated that pressing the button would earn money, whereas others indicated that failing to respond would cost money. After the anticipation period, subjects had 0.25 second to react, after which time information was displayed to let them know whether they had won or lost.

Areas of the brain that are believed to be involved in motivation were scanned during this session. Teens and adults were found to perform equally well on the task, and brain activity differed somewhat in the two groups--at least during the anticipation period and when 5 (the maximum amount that could be earned) was on the line. Specifically, on those high-payment trials the average activity of neurons in the right nucleus accumbens--but not in other areas that were being monitored--was higher for adults than for teens. Because brain activity in the two groups did not differ in other brain areas or under other payment conditions, the researchers drew a very modest conclusion in their article: "These data indicate qualitative similarities overall in the brain regions recruited by incentive processing in healthy adolescents and adults."

But according to the Long Island, N.Y., newspaper Newsday, this study identified a "biological reason for teen laziness." Even more disturbing, lead author James Bjork said that his study "tells us that teenagers love stuff, but arent as willing to get off the couch to get it as adults are."

In fact, the study supports neither statement. If you truly wanted to know something about the brains of lazy teens, at the very least you would have to have some lazy teens in your study. None were identified as such in the Bjork study. Then you would have to compare the brains of those teens with the brains of industrious teens, as well as with the brains of both lazy and industrious adults. Most likely, you would then end up finding out how, on average, the brains in these four groups differed from one another. But even this type of analysis would not allow you to conclude that some teens are lazy "because" they have faulty brains. To find out why certain teens or certain adults are lazy (and, perforce, why they have brains that reflect their lazy tendencies), you would still have to look at genetic and environmental factors. A brain-scanning study can shed no light.

Valenstein blames the pharmaceutical industry for setting the stage for overinterpreting the results of brain studies such as Bjorks. The drug companies have a strong incentive to convince public policymakers, researchers, media professionals and the general public that faulty brains underlie all our problems--and, of course, that pharmaceuticals can fix those problems. Researchers, in turn, have a strong incentive to convince the public and various funding agencies that their research helps to "explain" important social phenomena.

The Truth about Teens
If teen chaos is not inevitable, and if such difficulty cannot legitimately be blamed on a faulty brain, just what is the truth about teens? The truth is that they are extraordinarily competent, even if they do not normally express that competence. Research I conducted with Dumas shows, for example, that teens are as competent or virtually as competent as adults across a wide range of adult abilities. And long-standing studies of intelligence, perceptual abilities and memory function show that teens are in many instances far superior to adults.

Visual acuity, for example, peaks around the time of puberty. "Incidental memory"--the kind of memory that occurs automatically, without any mnemonic effort, peaks at about age 12 and declines through life. By the time we are in our 60s, we remember relatively little incidentally, which is one reason many older people have trouble mastering new technologies. In the 1940s pioneering intelligence researchers J. C. Raven and David Wechsler, relying on radically different kinds of intelligence tests, each showed that raw scores on intelligence tests peak between ages 13 and 15 and decline after that throughout life. Although verbal expertise and some forms of judgment can remain strong throughout life, the extraordinary cognitive abilities of teens, and especially their ability to learn new things rapidly, are beyond question. And whereas brain size is not necessarily a good indication of processing ability, it is notable that recent scanning data collected by Eric Courchesne and his colleagues at the University of California, San Diego, show that brain volume peaks at about age 14. By the time we are 70 years old, our brain has shrunk to the size it had been when we were about three.

Findings of this kind make ample sense when you think about teenagers from an evolutionary perspective. Mammals bear their young shortly after puberty, and until very recently so have members of our species, Homo sapiens. No matter how they appear or perform, teens must be incredibly capable, or it is doubtful the human race could even exist.

Today, with teens trapped in the frivolous world of peer culture, they learn virtually everything they know from one another rather than from the people they are about to become. Isolated from adults and wrongly treated like children, it is no wonder that some teens behave, by adult standards, recklessly or irresponsibly. Almost without exception, the reckless and irresponsible behavior we see is the teens way of declaring his or her adulthood or, through pregnancy or the commission of serious crime, of instantly becoming an adult under the law. Fortunately, we also know from extensive research both in the U.S. and elsewhere that when we treat teens like adults, they almost immediately rise to the challenge.

We need to replace the myth of the immature teen brain with a frank look at capable and savvy teens in history, at teens in other cultures and at the truly extraordinary potential of our own young people today.

(The Author)
ROBERT EPSTEIN is a contributing editor for Scientific American Mind and the former editor in chief of Psychology Today. He received his Ph.D. in psychology from Harvard University and is a longtime researcher and professor. His latest book is called The Case against Adolescence: Rediscovering the Adult in Every Teen (Quill Driver Books, 2007). More information is at www.thecaseagainstadolescence.com

(Further Reading)

Blaming the Brain: The Truth about Drugs and Mental Health. Elliot S. Valenstein. Free Press, 1998.
The End of Adolescence. Philip Graham. Oxford University Press, 2004.

Wednesday, November 18, 2015

Confirmation Bias

As Austrian-British philosopher Karl Popper says, the only way of testing a hypothesis is to form a view and to spend the rest of the day looking for evidence that proves you are wrong, a process known as falsification. Good decision-makers should consciously seek out diverse views that challenge their existing opinions


The root cause of confirmation bias is self-gratification, a constant need to feel right about the choices we make, because intrinsically we all tend to believe that our choices are a manifestation of our 1) character or 2) persona or 3) ability. Self-gratification is an aftermath of over-confidence or under-confidence and a self-driven confusion between cause and effect, often times wrongly attributing higher weights to the outcome than the process. The cure to this issue is active self-quarantine and a sense of scepticism in every observation, which by nature is very difficult because to err is afterall human

Sunday, November 15, 2015

Andy grove and CEOs

Later, in 2001, I met with Andy again and I asked him about a recent run of CEOs missing their numbers despite having told investors that their businesses were strong. The bubble had burst for the first wave of Internet companies nearly a year prior, so it surprised me that so many many of them had not seen this coming. Andy replied with an answer that I did not expect: "CEOs always act on leading indicators of good news, but only act on lagging indicators of bad news."

"Why?" I asked him. He answered in the style resonant of his entire book: "In order to build anything great, you have to be an optimist, because by definition you are trying to do something that most people would consider impossible. Optimists most certainly do not listen to leading indicators of bad news

Saturday, November 14, 2015

Durges Shah

I guess they have seen each other’s values over a long-period of time and whether it is markets or life, just come to think of it. How many guys do you know whom you would be willing to make an executor to a will? So, there are certain qualities that you believe that some people have seen through times and their behaviour makes you feel that when somebody is putting trust on to you, you know it is a burden, but you are willing to take that and deliver because you know there is a reciprocation from the other side. In more such relationships, the person feels obliged to be a part of the group or a part of the relationship rather than the other way around.

Read more at: http://www.moneycontrol.com/news/market-outlook/why-durgesh-shah-believes-knowledge-is-over-ratedmkts_3953801-1.html?utm_source=ref_article

Thursday, November 5, 2015

Baupost

A letter gives a rare glimpse into one of the world's most secretive — and most successful — hedge funds


(Getty Images/ Scott Olson)
There are two types of investing, according to the departing partner of hugely successful and secretive hedge fund Baupost Group: "needle in a haystack investing" and "tide comes in and tide goes out investing."

One type takes rigorous work as you search for a small number of opportunities. The other, "chutzpah."

The partner, Brian Spector, made those comments in a letter to investors in the $27 billion hedge fund.

The letter, included with Baupost's quarterly update, provides a rare glimpse into the Boston-based fund, which is led by iconic value investor Seth Klarman.

Spector, a senior member of the fund's public investment group, will retire at the end of the year after 17 years at the fund to focus on his family and philanthropy, according to the third-quarter update, dated October 15 and obtained by Business Insider.

Klarman, the author of the famed book on value investing "Margin of Safety," described Spector as "an outstanding investor, collaborator, and mentor."

Klarman also asked Spector to write directly to investors.

"Because of his unique perspective and insights, I asked Brian to draft a letter to you that accompanies this letter. He alone determined the content. I hope you find that it furthers your understanding of Baupost," Klarman wrote.

As of the end of last year, Baupost Group had achieved net gains (after fees) of $23.4 billion since its inception in 1982, placing it amongst the top-performing funds in the world, according to data from LCH Investments.

In more than three decades, it has had only two down years. Right now, the fund is on track for its third annual loss, suffering a "mid-single-digit year-to-date decline" after what Klarman described as a "painful" third quarter.

Dot-com bubble

Spector was 25 when he joined Baupost in May 1998 during the "heart" of the dot-com bubble. It was a tough time to be a value investor — broadly defined as finding stocks that are undervalued by the market and poised to rise.

Back then, some thought that the glory days of value investing had passed.

"Traditional metrics like cash flow and asset values were being blatantly disregarded by the market in favor of newfound metrics such as eyeballs and clicks. High-tech companies were the darlings in a rapidly rising market while less-sexy value stocks significantly lagged," Spector wrote in the letter.

Baupost finished the year down over 12%.

Two years later, though, the dot-com bubble burst, presenting an opportunity for Baupost.

While others were selling off their positions, Baupost continued to buy tech stocks at "remarkable prices."

It wasn't easy. Spector wrote that there were many sleepless nights watching investments they made at bargain prices continue to fall:

The bear market picked up steam and we found a number of stocks trading near or even below their net cash value. We bought baskets of formerly hot technology stocks that were getting pummeled, despite having good businesses with contracted revenues. Although many of these companies were experiencing negative cash flow, their management teams were shrinking headcount to align to the new economic reality and were successfully lowering or eliminating cash burn. It seemed like shooting fish in a barrel. We were buying cash at a discount with an option that the underlying businesses had real value. All we had to do was wait for that underlying value to be recognized. What could be easier than buying cash at a discount?

It turns out buying a dollar for 50 cents is a lot harder than it seems. Every day we added to these positions, thinking we were getting an even better bargain than the day before, only to wake up and watch prices drop further. Other respected investors would often comment about how 'value tech' was a 'value trap,' best to be avoided. It was as if the market was having a 'going out of business' sale and we happened to be the only customer who showed up. While both exhilarating and painful at the same time, what I remember most vividly is exhaustion. After countless late nights at the office, I would head home, collapse on my couch and stare at the ceiling. I was unable to read, watch television, or fall asleep. All I could do was worry about what we might have missed in our analysis.

Ultimately, Baupost was right in its thesis. The market turned, and the stocks they had bought shot up.

What's more, moments like that don't come up too often in the market. It was a "tide comes in and tide goes out" opportunity.

"Most of the time we are in periods of haystack investing," he explained. "We sift through lots of investment ideas to find a few decent opportunities. We sell more securities than we buy and our cash reserves begin to build."

Then, once or twice a decade, the markets "become significantly dislocated" and the tides change. That's when it's time to get in, and it takes nerve.

From the letter:

We see distressed sellers, illiquid securities, huge redemptions, and an excess of paranoia and fear. We quickly find a number of interesting opportunities, deploying our significant cash balances as we trade our precious liquidity for mispriced securities. We may lose money in the short term, as we add to our portfolio while prices are dropping. But when markets turn, we expect multiple years of strong profitability.

Investing in tide markets takes chutzpah. To do so effectively, you need to fly in the face of public opinion, you have to fight normal human emotions, and you have to be prepared to double down on your bets when your conviction is most in question. As Benjamin Graham once said, 'The investor's chief problem and even his worst enemy is likely to be himself.' But most importantly, you have to be at a place that empowers you to succeed—a place that is uniquely situated to take advantage of these market conditions. A place like Baupost.

A typical day at Baupost involves the team sifting through possible investment ideas:

On most days, it offers a menu full of bland, unhealthy, and fully-priced choices. We do enough work on the offerings to make sure we aren't missing anything and often go home feeling unsatisfied and unproductive.

Then, they find something that's compelling and focus their energy on it:

We work furiously to understand the drivers of the investment. We spend an enormous amount of time focused on the downside and the risk of permanent capital loss. We also try to understand potential optionality and upside. We ask ourselves, 'How and when will the market eventually see the situation differently?' Once we have a hypothesis about why an investment may be interesting, we start down the path of trying to confirm or reject our original thesis. Depending on complexity and price, this process may take days, weeks, or even months. Oftentimes we place investment ideas back on the shelf and wait for a lower price. Only when the investing stars line up will we add the position to our portfolio.

We can do this successfully because we have a culture of patience. Even though we work hard every day trying to uncover the next great investment, we only deploy our capital when we have real conviction that we have found one. When we don't find interesting ideas, we do nothing and hold cash. For this reason, I've often joked that I'm 97% unproductive. While this means I better be damn productive the other 3% of the time, it also means exercising patience often and waiting for great opportunities. On the flip side, when an idea has been analyzed and is fully baked, we drop whatever else we are doing, discuss the investment, and make a decision. Our portfolio decision process must be incredibly efficient, as we recognize that good ideas are scarce and may prove fleeting.

Warren Buffett said, 'Big opportunities come infrequently. When it's raining gold, reach for a bucket, not a thimble.' When a great opportunity comes around, it is imperative to size it correctly.

One key reason the fund is able to invest in those big ideas is it keeps cash on hand:

One of the most common misconceptions regarding Baupost is that most outsiders think we have generated good risk-adjusted returns despite holding cash. Most insiders, on the other hand, believe we have generated those returns BECAUSE of that cash. Without that cash, it would be impossible to deploy capital when we enter a tide market and great opportunities become widespread. Seth has said on a number of occasions in both types of markets, 'If you have great ideas, you will have capital to deploy.' This is incredibly motivating to our investment team.

Aside from discussing how the firm uses the fundamentals of value investing, Spector also delved into the culture of Baupost. Unlike some funds where the environment is super competitive, Spector said that Baupost has a culture revolving around teamwork and confidence in one another.

When a team member finds a good idea, we discuss who should work on it and how it compares to other ideas we are currently finding (as well as other past ideas). This is a complicated management issue. Good ideas are scarce and most investors like to pursue investments they have sourced. At most investment firms, analysts operate as free agents. Their pay is based primarily on the performance of their individual "book." Rather than cooperating and maximizing investment returns for the firm, they are often incentivized to do the converse. This may breed a culture of mistrust and misplaced motivations.

At Baupost, it is just the opposite. This is an area that I believe makes Baupost exceptional and can't be fully understood from the outside. People work together to maximize the returns for our clients, partly because they are incentivized to do so, but also because they believe in one another. No one would want to hand off a good idea and watch another analyst drop the ball. But, since our investment staff is accountable to both the partners and the team, they comfortably make hand-offs, root for one another, and try to help in any way possible. This means reviewing investments, exchanging impactful information and opinions, as well as mentoring one another.

It is a running joke in our industry that portfolio managers look enviously at the teams of their competitors, always assuming the other groups are better. Not here. At Baupost, I've never thought that I would want to go into 'investment battle' with anyone else. Our team is excellent and I believe it has improved as we have grown. (Quite frankly, I wonder if I would even have the opportunity to interview at today's Baupost!) We get along, share ideas, support one another, mentor younger analysts, and have a good time together. I know the part I will miss most about Baupost is the daily interaction with my smart, ethical, hard-working, and funny (some intentionally) colleagues.

He noted that you'd never know what the market is doing based on the atmosphere of the fund's trading floor:

We try to maintain a calm working environment. In order to really understand a firm and its decision-making process, one needs to comprehend how it acts in a period of uncertainty and stress. Are people calm or yelling at each other? Does it feel like business as usual or is everyone paralyzed by all the red on their screens? At Baupost, if you were in our trading room, you would not know if the market was up 5% or down 5%. This is by design. It is much easier to make reasoned decisions without someone screaming at you or second guessing your judgment. It's not always easy, but we try to maintain the same atmosphere and investment process in all markets.

Spector concluded that Baupost's successful long-term track record isn't due to a "silver bullet" of "formula," but rather the 215 people who make up the firm.

NOW WATCH: Tony Robbins reveals the very first investment everyone should make

Monday, November 2, 2015

Chetan Parikh - ISB value investing summit

“Delta”, in investing, is a term that my friend and an investor whose ideas I respect, Dileep Madgavkar, introduced me to. Don’t look only at the fundamentals, but look at the changes, the deltas, in fundamentals.It’s just not changes in margins or changes in returns on capital employed, but even changes in intangibles such as the size of the moat. Markets rerate and derate on “deltas” and it is important to understand what causes them.

“Sigmoid”, I think it is important to be on the sharp upside of the sigmoid curve. It’s about getting in early in a large market opportunity. In my case, I must hasten to add, in most stocks where I have ridden the sigmoid curve up, it has been largely through luck.

"Practiced deconstruction: - If you have ever listened to someone explain a book, a movie, or even a magazine article and you wanted to interrupt and say “But I saw something that contradicts what you are saying”, than you have practiced deconstruction

Here's How Isaac Newton Remembered Everything He Read The scientific genius had very specific habits when he pored over books in his favorite library

Sir Isaac Newton is largely renowned for watching an apple fall to the ground -- in 1666.
While the event has become iconic as a "eureka" moment of inspiration, mostcreativity experts grasp that Newton's genius stemmed from the decades of hard work following that moment. "What most people forget," James Clear notes inQuartz, "is that Newton worked on his ideas about gravity for nearly twenty years until, in 1687, he published his groundbreaking book, The Principia: Mathematical Principles of Natural Philosophy. The falling apple was merely the beginning of a train of thought that continued for decades."
Which means that the juiciest insights into how Newton worked can come from examining his habits before and after the apple. Thanks to a recent post by the Royal Society of London, you now have a chance to learn about one of his most important habits: the way he read books. Specifically, his tendency to "dog-ear" pages that were important to him. 
In fact, the Royal Society -- with tongue firmly in cheek -- gives Newton a good old-fashioned librarian's reprimand. Rupert Baker, the Royal Society's library manager, calls Newton "a serial offender in the area of page-corner tampering." All told, the Royal Society has four books from Newton's personal library in its collection.
  • Samuel Foster's Miscellanies: or, Mathematical Lucubrations (1659) 
  • treatise on numismatics from 1700
  • A 1610 Basle edition of the Artis Auriferae, a collection of tracts dealing with alchemy
  • Heinrich Cornelius Agrippa's De Occulta Philosophia (1533), which was about occult philosophy and ritual magic.
Only the first title directly relates to Newton's study of gravity, which is why this quartet of books is fascinating in its own right. It shows Newton's interests were wide-ranging. Like Van Gogh and Einstein, Newton was a Janusian thinker, someone who could mix and combine seemingly disparate fields to stimulate creative breakthroughs.
Beyond this, there's the way Newton dog-eared these books. To learn more about Newton's dog-earing methods, Baker consulted a book called The Library of Isaac Newton by John Harrison (1978). Here are Baker and Harrison's insights: 

Newton dog-eared pages in a very specific way. 

The common way to dog-ear a page is to fold a corner of the page down or up (depending on whether you're folding the upper or lower corner of that page). Newton took it one step further. He made sure the tip of the dog-ear pointed exactly to the pertinent part of the text. "A sentence, phrase, or even a single word," writes Baker. 

Newton took extensive notes in the book itself. 

His marginalia is extensive. There's so much of it, "marginalia" almost ceases to be an accurate word for it. His notes are copious, often occupying the entirety of a page's white space. 

Newton was exceptionally organized as a note taker. 

In addition to taking up most of the margins with notes, Newton created handwritten indexes and contents lists. The indexes look like present-day indexes: They are alphabetical, by topic. They list page numbers directly after each topical listing. You can surmise how marvelously these indexes complemented his dog-earing habit. 

Newton wasn't afraid to damage the books.

It's a basic point, but it shouldn't be overlooked. Books are property. Sometimes they are valuable property. Newton's physical use of them "clearly reflects Newton's attitude that books are working tools to be used as convenient and to destruction," notes Baker.
Mind you, Baker doesn't want any visitors to the Royal Society library getting the wrong idea. Dog-earing, he notes, is a "habit of historical interest when found in the former possessions of a genius, but present-day culprits will not be treated quite so understandingly," he writes. "The Librarian Death Stare is an actual thing, you know."