How do you become the world’s best known investor – well, Warren Buffett spends 80% of his time reading and thinking.

This is a series dedicated to Warren Buffett and his belief that we can all become smarter at investing (and life) by reading.

Every few days, I’ll send you interesting thoughts and ideas about investing. These could be stock related ideas or articles worth reading from the world’s best investors.

Do read and if you do find something interesting then add those links in the comment section below, so that other readers can enjoy the journey too.

All of us know who Warren Buffett is. What makes him really loved is not that he is one of the richest man on Planet Earth but it is his wisdom, his humility, and that he is very generous with sharing his investment approach. His ideas can be read by anyone in his yearly Shareholder letter which is written in a very simple and lucid way.

What makes Warren Buffett what he is? When you find a single line, which summarizes the formula behind Warren Buffett’s success, you stand up and notice. That’s what I did when I recently came across this amazing headline, “The Buffett Formula: Going to Bed Smarter Than You Woke Up”

The article is on the Farnam Street website. How to Get Smarter? It says:  Read. A lot. According to Warren Buffett , “I just sit in my office and read all day.”  It seems he spends 80% of his working day reading and thinking!

I have been in the markets for more than 25 years and I must confess, I do not read enough. So, I have decided that I will not only read more but I will share some of the interesting stuff I am reading through this platform. I will shamelessly borrow from the above headline and call the piece “Going to Bed Smarter”.

This edition covers three ideas. You can read further by clicking the link at the end of each idea.

1) MISTAKES WE MAKE

John Huber, like Warren Buffett, is very generous in sharing his views and writes extremely well.  He is the portfolio manager of Saber Capital Management, LLC, a value-focused investment firm. Here are nuggets from his 2018 investor newsletter…where he talks about the mistakes he has made.

Mistake 1

“A more significant mistake resulted from selling too early and holding too much cash as a result. Unfortunately, I didn’t recognize this and was selling when I should have been holding. The lesson here is to be reluctant to sell good companies with steadily rising intrinsic value, especially when cash is the alternative. A better approach is to wait to sell until a better opportunity comes along, or until you believe they are overvalued (because when you think good companies are fairly valued, they are often still undervalued).”

Mistake 2

“The most significant mistake this year involves anchoring bias, which is not buying a stock that has gone up recently, despite still being clearly undervalued. The result is missing out on gains that should have been made.”

But this is really the crux: Honesty!

“The good news is that I am much more conscious of my own pitfalls. I realize you may question the optimistic tone of that statement, but I believe a necessary step toward getting better as an investor is to first possess the willingness to be honest with yourself about what needs to improve. The ability to look at yourself in the mirror and recognize imperfections is the key to long-term staying power in this game.”

Read the detailed newsletter here.

2) AFTER A 13x RETURN, IS THE STORY DONE?

When your stock sails 13X in 19 months –many worry whether there is any steam left in the stock – so I decided to look at Graphite’s  investor presentation and here’s what they are saying

1. “…structural changes have resulted in a paradigm shift in our industry’s supply and demand dynamics which has led to recovery of graphite electrode prices globally, both of which are expected to be sustained going forward.”
2. “Looking into the year ahead, our capacity is fully booked for the first half of the year, mostly at current market price levels. This will result in significant margin expansion and enhanced profitability.”

For full details, explore it for yourself here

3) $100 bn MARKET CAP, 44% RETURN YEAR TILL DATE, WHAT NOW?

$100B marketcap  – can it scale anymore. Well TCS management thinks so. Here’s the must watch interview of this gigantic company. The normally conservative company is excited about its future!

TCS is the largest company in India on Market Cap basis. In a difficult market, the stocks is up 44% this year! It now has market cap of more than USD$100 bn.  The First Quarter FY19 results have been very good. In an interview that ET NOW did with the management post the first Quarter results.

Rajesh Gopinathan, the CEO of TCS, is sounding extremely Bullish in this interview. Some of the points he made:

1. The company is witnessing a broad-based growth and the outlook for the rest of the year is very positive
2. North America, which accounts for 50% of their business, has seen a turnaround as has the Banking & Finance vertical.
3. They ae committed to returning 80-100% of their Free Cash back to shareholders through Dividends or Buy Backs.

Watch the interview here(the first 13 minutes)