How to Learn just about Anything? – Part II – Acquiring Skills

We have all wanted to learn new skills like painting, singing, playing an instrument as an adult when we do not have the luxury of attending series of classes or the 10,000 hours as claimed by several. It is not so hard and even some life skills like swimming, driving can be learnt in as low as 20 hours. In this post we discuss the method for acquiring a skill at an amateur level at the shortest possible time.

Planning Stage:

Step 1: Define Success

A clearly defined goal is the starting point of the journey. Don’t start with more than one skill or goal.

Eg: 1) To be able to type 60 wpm using a qwerty keyboard with not more than 3 mistakes.
2) To be able to do a portrait sketch in pencil with reasonable semblance.
3) To be able to play ‘chinna chinna asai‘ song in my keyboard with correct tempo and tune.
4) To be able to swim across the 50m pool in freestyle without stopping
5) To be able to park the car in any parking lot properly

Defining Success
Defining Success

You can always build upon your knowledge sequentially, but it is important to do it only one at a time. Once you have reached your goal, you can give yourself a tougher goal in the same skill, or move on to a different one, as you choose.

Let us also address, motivation issues here. Learning a skill is hard, a goal with a purpose often works better than learning for leaning sake. For Eg: I want to learn conversational Gujarati so that I can talk to my fiance’s parents when I meet them in 5 weeks works better than I want to learn Gujarati.

So let your goal be,
“I want to learn ___________ in ___ time, so that I may ________”

Step 2: Deconstruct the Process

You may have noticed swimming, driving classes for absolute beginners are for about 20 hours in general. In 20 hours they are able to take you from someone who has never been inside water to be able to swim reach from one end of the pool to another, or in case driving as someone who has never been on driver seat to be able to handle from the highways to the chaotic Indian roads.

Josh Kauffman in his research as found similarly that learning any skill can be done in 20 hours.

You are by no means going to come out the other side as the next Michael Phelps or Michael Schumacher but would have learnt just enough to survive the roads or the water.

Any skill involves a series of steps. so first we need to deconstruct the steps. For example, the goal of swimming across the pool would involve mastering steps like:

  1.  Hand Movement
  2.  Leg Movement
  3.  Breathe in
  4.  Breathe Out
  5.  Take Off
  6.  Landing
  7.  Turn
  8.  Landing a Jump
  9.  Body Posture
  10.  Float

Step 3: Select: Identify Key Components

Pareto’s rule of 80/20 fits well into this context i.e 80% of your learning is going to come from 20% of your components. The most important components for the considered Goal according to me would be

  1. Floating
  2. Breathing
  3. Hand Movement
  4. Leg Movement

 

Learning to swim

So from about 10 + components we have identified  key components that we will focus on for our 20 hours of learning. For critical skills like swimming, driving etc which can endanger your or other lives when not practiced properly, it is preferable to have a trainer or atleast an experienced person around you while practicing. But for all skills, it is beneficial to have a trainer, who can provide good feedback and prevent you from practicing incorrectly. But professionals can at times impart incorrect/non-beneficial industry practices that does not suit your lifestyle or goal. You may notice that your driving methods resemble a lot to the person you have learnt from. So choose your trainer well.

Step 4: Sequence the Learning

In pencil sketching, the learning would start with choosing the right HB Pencils, holding the pencil,  lines and then shades.

Similarly in swimming, one has to learn to float to be able to get over the fear of drowning, then combine it with learning of hand, leg movements and breathing to be able to swim. Each of this can be identified as a sub skill and learnt and until it is reasonably mastered.

Step 5: Plan for failures

Visualizing that you have failed and to find out reasons for failure is one of the easiest ways to find out where we may fall before we even start. Pre-mortem your result and identify the weak links that may have caused you to fail and account for them in your practice. You may be too lazy to pull the guitar out to practice, put a stand near your favorite chair. Your partner may get too busy to practice salsa, find an alternative.  You’d be too lazy to follow through and finish lessons on your Gujarati, schedule the sessions with your tutor and pay for them ahead of time. You think you might put off learning cooking again – Invite your friends over a home cooked dinner at a scheduled date. Websites like StickK can really help you in sticking to your commitments.

Practice Stage:

This is the most important stage of the learning, where the initial enthusiasm of learning a new skill can quickly get replaced by the frustration of not making a progress fast enough. This is why the purpose of the goal that we mentioned in planning stage is very important. While our tactics will help you get through it in record time, it is still going to be frustrating and will need the purpose powered willpower to drag you through.

Pomodoro Technique

Short spurts of learning (say 20 mins) before and after your bed is the most efficient time for you to learn. While this can be definitely used for learning a musical instrument, language, typing etc it can understandably be difficult to learn swimming or windsurfing if your practice area is not in your vicinity or if the industry only provides standard slots like flight log or scuba. Go for the next best alternative.

Set up low stakes Environment

This might sound contradictory to the high stake target we set for ourselves. But it is not. For practicing set up a low stakes environment where you can fail without hurting yourself much. Start swimming in shallow waters, practice uni – cycling or bare foot running in soft grass, practice the new language with non-critical native speakers, try rope walking at a lower height or trapeze with the nets underneath.

Practice – Repeat – Commit to 20 hours

20 hours is not a lot of time. Most of us might watch more TV than that in a week. But this 20 hours may seem excruciatingly long, while practicing and miserably failing along the way. But do it anyway.

Monitor progress – Get Feedback – Get better

Have sub goals and timeline for the sub-skills that you have to develop and allot a time to integrate them. This will be no different than assembling a car, while each part that goes into making the car is quality checked on production or purchase, assembling it together will also take time and due steps need to be followed.

Keep realistic timelines for your sub- goals and measure your progress against them. Seek feedback and help as required to adjust your process and routine to help you get to the finishing line.

Taking care of Basics

I was tempted to leave this part, but it surprised me how many people mentioned this as one key part of learning that I couldn’t help but putting this in a separate section.

Hydrate Yourself:

Over 70% of the body is comprised of water and water play a huge role in helping to regulate nervous system and brain function. All the learning experts swear by the need to hydrate oneself well while attempting any learning exercise.

Exercise:

Regular exercises benefits your brain as much as it benefits your body. A fit mind in a fit body. So lace up and get going.

Recommended Read:
The First 20 Hours – Josh KauffmanAmazon.in / Amazon.com

The Master Deconstructor Tim Ferris on Accelerated Learning

How to Learn just about Anything? – Part I – Acquiring Knowledge

Schools, the hub of education has taught us what to learn. But has surprisingly never taught us ‘how to learn’. So often kids with different learning requirements are labelled ‘slow’ than find compatible teaching methods. No wonder Einstein, Edison, Graham Bell were all labelled ‘learning challenged’.

Process of Learning - JK Quote
Process of Learning

So how do we go about learning.  I’d like to broadly divide into acquiring knowledge i.e on subjects of chemistry, philosophy, investing etc and acquiring a skill. In Part 1. let us focus on acquiring knowledge. Continue reading How to Learn just about Anything? – Part I – Acquiring Knowledge

How to get Lucky?

Lucky People

We have all known people for whom things always fall into place at the right time and right place. These lucky people meet their future spouses by accident, they get a brilliant business idea from a random conversation, strangers seem to help them everywhere they go and they get introductions and guidance from the most unexpected places and people. We have all heard stories like the FEDEX founder who gambled with the last $5000 in the business and won enough to save the business and thrive. Life is full of fortunate coincidences for these lucky people.

The Everyone Else: Unlucky

They are also the other kind of people for whom bad luck and misfortune follow everywhere. After a long wait and much trying they scheduled an appointment with a big prospect who had to cancel  due to an emergency, the stocks that they invest in fall, the parking fills up just before they come, the traffic lights turn red on seeing them, they loose their valuables routinely, they don’t get the big breaks they think deserve despite their talent and hard work. The many like the talented Vinod Kambli who despite his superior batting talent had a short career unlike his friend who went on to become the little maser.

So does luck exist?

Continue reading How to get Lucky?

How to keep your Brain Young?

Brain is the most important and vital organ in our body. Unfortunately, numerous modern age practices have taken a toll on our brain. But it is not only possible to reduce the aging of your brain, it is even possible to reverse the aging effect i.e get younger. The good thing is none of them are terribly difficult to do. Let us look at the the 10 things we need to practice to keep our brain young.

1. A Good Brain Diet

Brain needs numerous nutrients esp Omega 3 to keep it healthy and running. These nutrients are found in plenty in foods like Walnut, Avocoda, Brocolli, Bluberries etc. Eggs and Salmon Fish as well for those who eat them can be extremely good supplements for the necessary nutrients.

Having withdrawal symptoms ? Check out how I won this one !!

Reference: Brain Super Foods

Brain Foods
Brain Foods

Continue reading How to keep your Brain Young?

How to change a habit?

Getting Ready for New Year Resolutions?

New year is less than three months away. We will soon be drawing up our list of goals, aspirations, resolutions and hope this year would be different. But like Einstein said,

“Its Insanity to expect a different result when you do the the same thing over and over”

Changing an habit is hard. 21 days of will power is not going to magically get you over the hump. So what will?

good vs bad habits
good vs bad habits

Continue reading How to change a habit?

How to leverage your partner for your success?

When I talk about leveraging your partner for your success, I don’t mean marrying into money like ‘Who wants to marry a multi millionaire‘ or the ‘Millionaire Match maker‘. With the disclaimer set aside, lets see what I am talking about.

superpower
superpower

How can you guarantee Failure?

Once we can remove things that guarantee failure, success will eventually happen if you try hard enough. Following through and sticking to a process does not guarantee success. But not doing so can guarantee failure. We have already discussed about the importance of the process here, here and here. When I look at things and events in my life where I have guaranteed failure vs risked success, one thing stands out: An Accountability partner.

Continue reading How to leverage your partner for your success?

Is debt bad?

We have seen finance experts like Dave Ramsay tell us to cut up our credit cards. We have seen how delinquent home loans not only caused people to lose their homes but also a systemic crisis that spread across several financial institution and countries during 2008. Repossessed cars and two wheeler are common in many low income households. To add to this trouble student loan defaults have become high all over the world as the income opportunities often don’t match up with the cost of some of these courses.

So is debt a bad thing? Should we indeed cut up credit cards? Save for 15+ years to buy a home. Never take a loan in our life?

From Shylock of ‘Merchant of Venice’ to today’s bank that offer Personal loans and credit cards with dubious terms the bankers have been portrayed as Vultures. It is often joked ‘Banks will only lend money to those that don’t need them.’. Are these Financial institutions just vultures that serve no real need?

Continue reading Is debt bad?

Book Summary: One upon Wall Street by Peter Lynch

One_upon_wallstreet_PeterLynch

  • ISBN-10: 0743200403
  • ISBN-13: 978-0743200400

Buy Amazon.in

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Peter Lynch, one of the greatest investors of our time has given ample time tested techniques in this book.

 

How retail investors can win in the stock market

-> Take advantage of what you already know. i.e invest in familiar sectors.
-> Invest in a house before you invest in a stock market
-> Ignore short term fluctations
-> Predicting economy or stock market direction is futile
-> 6/10 wins is a stellar record

Types of Stocks

  1. Slow Growers – 4 – 6% growth. Stable Business like Power and other Utilities. Buy when you can’t find anything else.
  2. Stalwarts – Medium Growth. 10- 12% growth. Established companies like HUL, CocaCola, P&G etc that grow year on year and make standard profit. Take profits at 30 – 50% and repeat with other stalwarts.
  3. Fast Growers – Medium to small size companies that grow at 20 – 25%. Assess growth phase and sustainability.
  4. Cyclical – Expands and contracts over time. Eg: Auto, Airlines, Tyres, steel, Chemicals.
  5. Turnarounds – Stay with bad news for a possible good turnaround. But stay away from tragedies where outcome is unmeasurable. Lynch considers companies moving into unrelated fields as ‘diworsification
  6. Asset Plays – Properties i.e land and other assets held by a company is more valuable than the quoted price.

Categorise the stocks you purchase into the above buckets and arrive at target price based on the category it falls.

Peter Lynch Quotes
Peter Lynch Quotes

What is a Perfect Stock?

  1. Dull or simple business with a boring name
  2. It does something dull Eg: Packaged Foods like biscuits, soap etc
  3. It does something disagreeable Eg: Harpic
  4. It’s a spinoff from a well known holding company Eg: Bajaj Finance
  5. Institutions don’t own and analysts don’t follow.
  6. Rumours abound like toxicity, mafia Eg: Casino
  7. There’s something depressing about the business Eg: Funeral homes
  8. It’s a no growth industry. Steady business, reliable customer base.
  9. It’s got a niche
  10. People have to keep buying it. Eg: Razor blades, cigarrets
  11. It’s a user of technology which results in massive cost savings.
  12. The insiders are buying
  13. Company is buying back shares

Which stocks to Avoid ?

-> Hottest stock in the hottest sector
-> The next something
-> Avoid ‘Diworsification’ i.e  companies that expand into unrelated business
-> Avoid acquisitions that lack synergy
-> Avoid whisper stocks i.e great stories with no substance and no earnings
-> Too dependent on a handful of clients
-> Beware of stock with an exciting name

When to Buy ?

Buy when Price line is below Earnings line and Sell when Price line goes way above the earnings line.

P/ E guideline – check historic P/E levels to know average.

Utility/slow growers – 7 – 9
Stalwart – 10 – 14
Fast growth 14-20

Check if companies have a plan on how to increase future earnings – reduce costs, raise prices, expand into new markets, sell more to same market, close down loss making operations etc.

What to look for before you buy

(1) Does this new trending product have an impact on co’s prospect. If yes consider, else no.
(2) PE Ratio & Growth  = long term growth rate + dividend yield / P/E Ratio – ratio < 1 poor, 1.5 – 2 – Ok , 3 and above – Excellent. This is not same as PEG ratio.
(3) Cash Position – Cash, Cash equivalents and marketable securities over long term debt. Revised P/E = Market Price (less) Cash Per Share/ Earnings
(4) Debt Factor esp for companies in trouble. Can they survive the crisis?
(5) Dividends – Regualr dividends payouts acts as floor for drop in price.
(6) Book Value (BV) – Before buying for Book Value examine the assets that form part of BV and ensure it is worthy. BV could also be Asset plays due to nderstaed value of real estate,land, securities, tax write offs etc
(7) Cash flow – Free cash flow to be checked for heavy capex industries

Signs to look out for – Piling up of (obsolete) inventory , pension plans and future obligations including contingencies. Eg: litigations.

A 20 PE at 20% growth rate will make more than 10 PE stock at 10% growth rate

Recheck your story every few months to see if they are still relevant.

How to avoid the ‘dotcom’ crash scenarios yet participate in the upside of new technology

Pick and Shovels Strategy : Investing in Denims rather than the gold rush. More money is to be made by the suppliers or direct beneficiaries of a much hyped industry Eg: Microsoft Vs Dell

Through Holding Company: When a holding company has a subsidiary in the much hyped sector which might later be spun off. Holding co. business is a downside protection.

Through ‘Brick and Mortars’ that benefit from the efficiency by use of this new technology.

Personal preferences can be a reason to add companies to list of stocks to research . But never invest without doing the homework i.e knowing

(1) Company’s earning Prospects
(2) Financial Condition
(3) Competitive Position
(4) Plans for Expansion
(5) At what stage of Expansion phase is the company currently in

  Invest for the the long term so that you will not be forced to liquidate for need of cash in a bear market. Only Invest what you can afford to lose without the loss having any effect in your foreseeable future.

The Final Checklist:

  1. P/E ratio – High or Low – Compare with similar co’s in same industry.
  2.  % of institutional ownership – Lower the better
  3. Are insiders (Promoters/Directors) buying ? Company buyback?
  4. Are earnings growing consistently
  5. Strong or Weak Balance sheets i.e Debt/Equity Ratio
  6. Cash Position
  7. For Slow growers – Dividend consistency and Dividend/Earnings ratio
  8. For Stalwarts – Check P/E, for possible ‘diworsificcations’, growth rate, momentum and for long holding periods chk performance over prev. recessions and downturns.
  9. Cyclicals – Watch out for new entrants. Anticipate shrinking P/E. auto up and down cycles last for 4-5 years each.  Deeper down cause higher ups.
  10. Fast Growers – Is PE almost equal to growth rate in earnings. Is Expansion speeding up or slowing down? Does it have room to grow ? Proven ability to expand ?
  11. Turnaround – Will business survive ? Liquidation Value of company. How will turnaround happen? Is Business coming back or costs being cut ?
  12. Asset Plays – Is there any hidden value in the assets? Is company taking on new debts ? Beware of Provisions and contingencies.

Points to note:

(1) Understand the nature of the company and specific reason for holding the stock.
(2) Categorise your stocks for right expectations
(3) Big companies small moves in prices, small companies make big moves.
(4) If consideration is based on specific product, consider impact on company
(5) Consider small proven and profitable companies
(6) Avoid hot stocks in hot industries
(7) Be suspicious of 50% growth rates
(8) Moderately fast growers in non growth industries is an ideal investment
(9) Insiders buying the stock
(10) Don’t buy only on stated Book Value. Consider Real Value.

Realistic Expectations – six of 10 ideas and 12- 15% return.

Portfolio Allocation

A small portfolio of 3 – 10 stocks would be a managable size. The composition of the portfolio should be

Growth – 30 – 40%  – Slow -Low Risk low gain /Fast – High risk high gain
Stalwarts – 10 – 20% – low risk moderate gains
Cyclicals – 10 – 20% – low risk high gains or high risk low gains based on entry level
Turnarounds – Rest – high Risk High Gain

Consider risk portfolio and age factor while allocation.

When to Sell

If company has gone up well to factor in all good news, it may be sold. But if original story is intact stay invested.

Slow Growth – On 30 – 50% appreciation or when fundamentals have deteriorated.
Stalwarts – Price strays too far from earnings, and/or industry P/E. Slowing growth or vulnerability of a major division.
Cyclical – 100% of capacity is used, Inventory build up, product slowdown, union demands, high capital requirement for expansion.
Fast Growers – too much media attention, no where to expand business, high P/E of 30 + when growth is below 20, high institutional holding, exit of key executives to join rival.
Turnaround – After the turnaround, High dependency on one customer, growing debt , rising inventory , High P/E.
Asset Plays– Once hidden value is unlocked and is fairly priced. Increased institutional ownership, lower sales, increase in debt , dilution of share value.

Do not buy a mediocre company because it is cheap.

Happy Investing. Stay Profitable 🙂


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Book Summary: How to Avoid Loss and Earn Consistently in the Stock Market by Prasanjit Paul

How to Avoid Loss and Earn Consistently in Stock Market
How to Avoid Loss and Earn Consistently in Stock Market

 

ISBN: 9352679717 PaperBack
ASIN: B076MKJV6Y Kindle

Buy Here

Who is the book for: The book is meant for retail investors with a long term investment horizon.

What retail investors must avoid to avoid losing money?

(1) Following the stock tips provided by brokers blindly. Brokers have vested interests in increasing volume of your trade and not your profits.

(2) Intraday Trading : Its a high speed game which hardly anyone has mastered. Its no wonder we don’t have any stock market millionaires/billionaires who have become rich solely due to intra day trading.

(3) Investing on Borrowed Money: Although stock market is one of the greatest wealth generators it comes with no guarantees or timelines. Pressure of borrowed money and to make higher returns than the cost of funds can cause the investors to take many high risk bets leading to loss of capital.

(4) F&O trading: High margin trading without understanding its risk can cause capital to be wiped out in no time.

The time tested strategy to create wealth in the stock market is to:

“Invest in high quality business(stocks) and hold it for the long run.”

Continue reading Book Summary: How to Avoid Loss and Earn Consistently in the Stock Market by Prasanjit Paul


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Why we write a blog and why you should too !!

Last week, we successfully published our 100th blog post in ‘We Are The Living’. The journey has been very transformative to say the least. To start this blog was a random whacky idea we picked from some online expert. The blog has been helpful in surprising ways. In this 101st post in ‘We Are The Living’, I would like to state these reasons and hope that they can persuade you to start your own blog too.

Encounter my devils

The lenses that in which we view our world as children often become some of the hardest filters to get out of in our life. Mine had been about my height. Even now when I write this sentence it gives me a little uncomfortable feeling. The first time I really caught this bull by its horn was in the post ‘The Joy of Acceptance.’ I can confidently say I felt infinitely better after I wrote and published that article. It was also reassuring to know that it helped many others with the same struggle.

Another of my devil was my stinginess which I faced in ‘Why we should celebrate.’ Putting my fears, inhibitions and guilt in black and white made me take a step back, accept and handle them much better.

Continue reading Why we write a blog and why you should too !!