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Knowledge Grows by Subtraction
Nassim Nicholas Taleb once said, “Knowledge grows by subtraction much more than by addition – what we know today might turn out to be wrong, but what we know to be wrong cannot turn out to be right, at least not easily.” This insight perfectly captures the challenge facing today’s investors, particularly in India.
Three decades ago, investing in mutual funds was simple – most people didn’t know they existed. The job was to explain the basics: what a mutual fund is, what NAV means, and how investments grow. It was a process of addition, building knowledge from scratch.
Today, the landscape is dramatically different. Financial information is abundant, yet much of it is misleading. Investors arrive armed with technical analysis charts, complex derivatives strategies, and market-timing opinions, often confident in knowledge that is fundamentally flawed. SEBI data shows 89% of derivatives traders lose money, highlighting how sophisticated knowledge can become a liability if built on misconceptions. Similarly, many can read charts fluently but lack understanding of the businesses behind the stocks.
The real challenge now is subtraction – helping investors unlearn dangerous ideas before teaching sound principles. Simple truths, like buying quality businesses, staying diversified, and maintaining patience, are overshadowed by the allure of complex strategies and speculation. Warren Buffett’s advice – focusing on business fundamentals rather than price predictions – remains countercultural yet timeless, surviving the subtraction test.
In today’s information-saturated world, the wisest investment strategy isn’t learning more techniques, but developing the discipline to discard appealing but harmful misconceptions. True financial wisdom comes not from accumulation but from clarity, honesty, and the courage to unlearn what doesn’t serve long-term wealth creation.
Personal Finance
- 25 personal finance hacks the rich don’t tell you: Got a bonus or tax refund? The rich don’t rush to buy the latest gadget. Instead, they invest unexpected money into SIPs, stocks, or debt funds, turning temporary cash into long-term wealth. Read here
- Why ignoring your credit score can cost more than you think: Ignoring your credit score may seem harmless, but experts warn it can lead to hidden costs, loan rejections, and even fraud risks. As India’s digital credit ecosystem grows, monitoring your report is becoming essential for financial stability.Read here
- How to save LTCG tax when selling mutual funds and property u/s 54 and 54F: If you redeem your equity mutual funds and earn long-term capital gains (LTCG), you can claim an exemption under Section 54F by investing the gains in a new residential property. But what happens when you own more than one house? Read here
Investing
- Global Bond Yields Surge: What It Means for Investors: Global 30-year bond yields are surging across major economies despite expected rate cuts, signalling market risk and potential financial stress. Could this yield spike trigger a global market shock? Read here
- Are Quality Stocks in a Bubble? Even top-quality companies may deliver poor returns as valuations hit extreme levels. Are you overpaying for safety? Find out why a strategy, not just quality, matters. Read here
Economy & Sector
- GST reforms set to reignite consumption growth, spur corporate profitability: India is set to implement new Goods and Services Tax reforms. These reforms aim to simplify tax structure and boost spending. Revised rates will take effect from September 22, 2025. Experts believe that the reforms will play a key role in addressing the demand challenges. Lower taxes on essential and processed goods will create savings for consumers and improve spending and consumption. Read here
- How is India’s economy resilient amidst global uncertainties? At a time when global uncertainties are mounting, India stands out. Real GDP growth at 7.8%, record GST collections, and stable inflation. All this resulted in India’s sovereign rating being upgraded by Fitch after 18 years. What differentiates India from rest of others is its strong domestic consumption (60% of GDP), strategic policy frameworks, a diversified economy, and an active approach to modernisation in critical sectors such as manufacturing and services. Read here
- How regulation is shaping a sustainable crypto assets sector in India: India’s crypto sector is on a sustainable path through robust government regulations and industry self-regulation. Could this model make India a global crypto leader? Discover how the framework works. Read here
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That’s it from our side. Have a great weekend ahead!
If you have any feedback that you would like to share, simply reply to this email.The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter