Surrender: responding to life without a bias

My life coach recommended The Surrender Experiment to me. I have been reading the book ever so slowly.

My primary takeaway from the book so far is to accept life as it happens without the influence of my own personal preferences. The following quote captures the core of the advice:

From now on if life was unfolding in a certain way, and the only reason I was resisting it was because of personal preference, I would let go of my preference and let life be in charge.

For a couple of days, it seemed obvious what I had to do. But slowly it started to be confusing. If on a Sunday I feel like eating at a fancy restaurant, is that my own personal preference, or is that life offering me a fancy meal (in the form of a spontaneous thought)? I didn’t have an answer.

Then it occurred to me. Accepting life means living spontaneously; pausing to question every single choice is anything but.

If always acting by one’s personal preferences is the south pole of the earth, purposely acting against one’s preferences is the north pole. The direction may be different, but they are qualitatively the same; you are still on the same plane; you are still anchored to the earth. What we really need is to rise above the earth. Rather than basing your actions on your preferences, you should ignore the preferences.

Respond to the situation that life presents. If the response aligns with your preferences, so be it. If the response is against your preferences, so be it.

Dream big to realise your potential

I am a credit card enthusiast. I often browse through credit card offerings to see if there are better cards than what I currently have.

Earlier in 2024, I got the Infinia credit card from HDFC Bank. This is sort of like “winning” the credit card game. There is no clearly better card an Infinia holder can upgrade to. (While there may be more beneficial cards for some people based on their spend patterns, it’s hard to do better than Infinia for most people.)

My “credit card optimisation” game pretty much ended when I got the Infinia, with me winning the game. However, I still habitually explore other credit cards every now and then. As expected, such explorations end with a reaffirmation of what I already know: there aren’t many cards I can upgrade to. The time spent looking at credit cards is wasted time, more or less.

But why do I still look at credit card options even when I know it’s not a productive use of my time? I think it’s because I don’t have anything more productive to do.

This is where the advice to “dream big” shines through. Dreaming big and working towards achieving those dreams is an effective way to realise your potential. Had I dreamt of doing something more meaningful than simply collecting credit card rewards, I wouldn’t be wasting time now browsing credit card brochures.

Where GenAI tools struggle

A tricky, niche, tax question. Basic clauses that apply to the majority of taxpayers in the country are described and discussed everywhere on the web. But this specific question is not.

Since GenAI tools are the new panacea, I asked Gemini about this. It said something that was clearly wrong. I thought its “deep research” mode may do a better job. I asked the same question again but in the deep research mode. It did a lot of work and eventually spit out a report, which was also unsatisfactory.

There are nuances in tax rules that need to be considered for answering this question. Most web sites don’t care about this nuance; Gemini, which uses information from the web as its source, also couldn’t understand the nuance. It produced an answer without solid justification.

I then did a regular Google search and found a site that said the opposite of what Gemini said. I asked Gemini a follow-up request to include information from this new page.

My expectation: Gemini will reconcile the differences between the sources and improve on its previous answer.
What Gemini did: Gemini simply overwrote whatever it had said before with what was in the new site.

Gemini did exactly what I do when a code reviewer is forcing me to do what I don’t want to do, but I am tired of arguing. I just do whatever the reviewer says and move on. Gemini doing that to me did not exactly instill confidence in the report it had generated.

While GenAI tools are great at many things, they are not exactly good at answering niche questions based on conflicting information from different sources.

A different kind of social media diet

As I was going to write a rageful comment on a random post by a random person on Facebook, I realised something.

If someone told me in real life the exact same thing as that post, what would I do? I would say the least amount of words possible to stay polite and flee the scene. I know not to engage with idiots in the real world.

But when it comes to social media, I was constantly engaging with idiots. That’s why I wasn’t feeling good after spending time on social media. I am choosy about whom I engage with in real life; I should emulate the same on social media too.

(In my defence, this was not an issue in the initial days of social media. I only have sensible people as my connections; they don’t post garbage. With every social network promoting everything from outside the user’s own network, chancing upon random garbage has become more frequent.)

Starting to appreciate consistent performance

The following graph shows 3 year rolling returns of 3 different mutual fund schemes. (I have removed the fund names from the graph since the names of specific funds are not needed for this post.)

Rolling return graph taken from primeinvestor.in

The green and purple funds had sharp declines in March 2020 when the market had just reacted to the Covid-19 shock. The blue fund also fell, but not by as much. The reverse of this fall can be seen in March 2023. Any investor that invested in these funds in March 2020 got a significantly higher return than anyone invested right before or right after.

When I was new to evaluating investment assets, the peaks that the green and purple lines reach used to attract me. I liked such funds. “There is a chance of making an incredible return from these funds,” I’d tell myself.  Investing in funds like the blue line felt like leaving some returns on the table. I wanted to invest in assets that have the potential to maximise returns.

But high volatility can be hard to live with. When investing in a fund that provides fairly consistent returns, entry and exit times do not matter as much. A volatile fund can leave us less than satisfied depending on our entry/exit time.

Let’s say a fund’s NAV goes up from ₹100 to ₹130 within 4 months, and then falls to ₹121 in the next month. I’d find it hard to sell my holdings when the price is ₹121 despite knowing that anchoring to ₹130 is irrational. I’d delay exiting the fund as much as possible in the hope that the NAV may rise back up. Of course, the NAV can keep dropping below ₹121 as I wait. But that knowledge hasn’t been enough to gather the conviction necessary to sell at ₹121.

Over time, I have started appreciating consistent performance over potentially high—but uncertain—performance. I think the following reasons triggered a change of mind in me.

• Reading various articles on portfoliocharts.com and looking at the various charts that they plot to compare different portfolios.
• My experience selling the RSU shares that I receive from my employer. Working with volatile assets can be emotionally taxing.

There’s another angle to this, too. I used to think that investors avoided risk only when they were afraid of it. But now I know better. I avoid certain risky assets or risky portfolio mixes not because I fear the potential loss. Rather, I don’t particularly want the added return, so I am happy to keep both the extra risk and return outside my portfolio.