I come from a Marwari business family. My grandfather was the owner of mustard oil mills and many other businesses in West Bengal. My father, despite being a top-ranking engineer, had to join the family business. However, seeing labor and electricity issues in Bengal, he entered the sanitaryware and paint trading business with his brother, and then joined the marble and granite trade.
Now, despite hearing business talks at home all day long, I really had no interest in getting into the family business. Looking back, I think the reason for my lack of interest in business is my slowness in understanding fast calculations and the razor-sharp acumen required to be a good business owner that most Marwaris are.
That doesn’t mean I didn’t learn some useful lessons by watching how my father and uncle ran their business.
The most important lessons revolve around the usefulness and preciousness of cash which, according to a Marwari, is the most important thing that matters in business. Not only the amount of cash, but also the speed or speed at which cash can be moved or circulated.
Needing to save every buck as it may be useful in future was another important lesson I learned. This came from the Marwari’s high regard for hard-earned money and its usefulness as a commercial resource in times of need rather than from extreme skimping.
Outside of money lessons and patience (we’re usually an extremely patient one), one of the most important ideas I picked up from my father’s business talks and thought process was ‘mota-pearl’, which means ‘More or less. ‘
Mota-Moti is like the ‘Generally Accepted Accounting Principles’ taught at Marwari Business School (call it ‘Marwari GAAP’). It involves the outright calculation and estimation of a trading opportunity based on the ‘Economic Loss’ principle, which means a small loss or downside you can afford, one that is bearable in the pursuit of a potentially large profit or upside .
Marwaris use this rough-and-tumble rule of thumb to overcome inertia in many decision situations. And we don’t need detailed excel sheets or lengthy accounts to make these decisions. Just a sheet of paper and some quick mental calculations work. Because all we need is a rough idea of what will work and what won’t.
This rule of thumb helps to kill failures early and accumulate success by taking advantage of what works. The rationale is to make quick, though not reckless, decisions in a competitive environment.
The idea of fat is so ingrained in my psyche that when Ben Graham or Warren Buffett spoke of being almost (roughly) right when analyzing businesses or gauging their intrinsic values, I thought of it without any hesitation. Kota raised. Why doubt? And now my analysis and intrinsic value estimates are often on the back of the envelope. I’m dealing with less than enough knowledge of businesses to keep the pearlescents clean and good-looking. But I also make sure that my investment decisions are based on the principle of cost-effective loss, and therefore I avoid businesses where I may incur large losses (as much as I can afford) or that I don’t understand. is.
Outside of investing, I’ve tried mot-of-pearl in my school’s math class, but my teachers weren’t impressed. She wanted accurate answers, and often I didn’t know how to get them. And so I left maths at the first opportunity. But this idea has helped me in many other areas of life. My wife (also a Marwari) agreed to marry me because I was fine. After college, I chose a job that I liked fat-pearl. I quit my job to start a successful investor because, thick-of-pearl, it presented a low downside – high upside opportunity. I trust people who look good in their words and actions. Ask me “How’s life?” And you’ll get a response like, “Thick-pearl, that’s cool.”
Motta-Pearl is a great mental model for looking at professions and life (Marwari’s contribution to Charlie Munger’s jaali work).
Things are never perfect. But if those plump-pearls are good, you’re in luck. Stop complaining and move on.
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