Summary of today’s issue

🔑 #1 - Why reading about dead people can help your life

🔑 #2 - Please don’t take that job

🔑 #3 - Valuation mistakes I’ve made…🫣

🔑#1 - A life well spent & regret minimization (avoid drugs & alcohol, hang w/ family. Everything else takes care of itself. over indulgence on ambition)

How does one go on a fantastic journey?

Come up with a destination, and start moving.

Without a destination, you may find yourself in a place you didn’t want to be.

My version of this for life is reading obituaries and talking to grandparents.

The obituary is my map for a life well lived.

I’ll tell you why…

In 250 words or less you get the description of great people. These are complex people who lived for many decades. They struggled, they laughed, they built families, they built empires…but you don’t get much description on these details. There simply isn’t space.

Constraints on language force the truth to come out.

When you can’t write the life biography of a person, you focus on the things that mattered. Usually; family, impact on your community, and industry.

Each of us is different, and we won’t choose the same destination. But if you read enough obituaries you’ll find stories that resonate for you. Stories that will help inform you on what is a life well lived.

Here’s a famous quote from Charlie Munger:

Early on, write your desired obituary & then behave accordingly

Let’s all write our obituary so we know where to go.

Some closing thoughts…

My observation is that life can be difficult but also incredibly simple.

Things seem to workout.

If you avoid drug and alcohol addiction, and you commit to doing work…things eventually come together.

🔑#2 - Please don’t take a job without doing this research

I think very highly of you my dear readers.

You would never take a new job without doing this kind of research. 👆

As an employee of a business, you’re making an investment (of time) in the company you’re joining.

Summary of research steps:

• sign-up for a sales call, you can be honest and tell the salesperson you’re doing research
• review the website (seems simple, but many won’t do this)
• find ex-employees - ask them to do a quick call with you to share their experience
• browse reviews + try the product

Please don’t disappoint me.

Do your research.

🔑#3 - Valuation mistakes I’ve made…🫣

The most expensive company I ever bought was the ‘cheapest’ company I bought.

I thought I was getting a great deal. But alas, most businesses are priced fairly.

If you feel like you’re getting a great deal, ask yourself “why am I so lucky?”.

I’ve made a few of these mistakes that Brian mentions in his tweet.

The ones that hurt me the most are

1. buying a company because it’s cheap
2. overvaluing people’s opinion
3. overvaluing growth

Overvaluing people’s opinion

I made this mistake the most early on.

I made the mistake of assuming people know more than me, especially if they have industry experience. Please don’t make this mistake my friends.

It’s called the “Expert Fallacy”.

I found someone who was an expert and trusted their advice on an investment.

This was a horrible mistake.

The person you’re talking to may be the best in their industry, but that will have no correlation with if they are a good investor or not.

Also, your advisor may not have skin in the game. If they’re not sacrifcing a lot of money, and a lot of their time after the acquisition to make it right, then their opinion should carry very little weight.

Now I commit to building my own understanding of why an investment is a good one.

If I don’t understand the key levers and details of what makes a business tick, then I don’t invest.

Overvaluing growth

I’ve started to ignore businesses that are growing too fast. The owner’s expectations are that they will get paid on future value, and it’s often hard for me to build a good enough understanding of the growth to see if its dependable post acquisition.

Extremely fast growth leads to misaligned expectations for me.

Have a great week,

Sieva

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