In January of 2008, Tata Nano was launched at the New Delhi Auto Expo. See the reporters and photographers all trying to catch the first look of the world’s cheapest car.

For a while, it caught the imagination of an entire nation. Everybody wanted to own one. Apparently even owners of BMWs and Mercedes wanted one!

About 200,000 people paid the initial deposit but only about 100,000 would receive their cars in the first lot. Tata motors tied up with SBI, India’s largest bank, for accepting the deposit. Of those that applied, through some lottery system, the lucky half would got their cars. In short, this was like an IPO of the Tata Nano!

See below, the detailed procedure for applying for a Tata Nano. Try not to laugh, yet.

The first lucky owner of the car had paparazzi following him on scooters.

People thought, more Nanos on the road would make the traffic situation worse.

The auto rickshaw drivers thought they could upgrade to a Nano to give their customers a better ride.

A couple of westerners wrote a book on the Nano and how India can teach the world about innovation. (Don’t laugh, yet!) The snippets that I read, praised the car for its design and how it was suited for the Indian roads, Indian traffic conditions and the Indian wallet.

The Wall Street Journal covered it. And so did New York Times!

Can you guess how many Nanos were sold between 2009 and 2017? About 300,000! Compare that to the 200,000 applications during the Tata Nano IPO. Only 300,000 in 8 years!

And we thought what? That the auto rickshaws would get replaced? That everybody in India would own a car? That there would be so many Nanos that there would traffic jams? We were right on one count though- that we knew we would have traffic jams. You can laugh now.

And fast forward to today.

10 years since that Auto expo and it’s gone along with a few thousand crores of shareholder wealth! Goodbye Nano! But I hope we learn a few things from your demise.

So, back in 2008–09, given all the hype, given all the rush at dealerships, given all the media coverage, given all the design thinking, given all the innovation, given all the value for money, given all the intelligent fanatic-ness of Rata Tata — could anyone have seen this outcome? No- not even the best amongst us!

The point that I am trying to make is, if you saw what you saw, you read what you read and heard what you heard back then- what would have led you to predict this outcome for the Nano? Nothing!

Now, think about what we are seeing today, reading today and hearing today. What gives us the confidence that we can predict the outcome now? How is it different, this time? Think about it for a moment.

So, if we have a really bad record of predictions, what does this mean for investing? Several things:

1. We think linearly in a world with random forces. It’s just an evolutionary thing. Therefore predicting trends let alone outcomes very far out into the future is futile. (According to certain predictions of the past, we should all be in flying cars now, right?)
2. Have a healthy disregard for common perception, media and expert opinions. Ruthlessly cut off exposure to media, news and opinion on current affairs. If everybody can be wrong- even Elon Musk, why bother reading their opinions? I stopped reading the newspaper on 1st June and my life hasn’t degraded in the last 40 days!
3. Bet on time tested products and services. Time tested products have been around for centuries and have seen ups and downs and yet survived. Despite popular media and expert opinion. For example, liquor has been consumed for thousands of years; it’s unlikely to get disrupted. I can’t say the same for say WhatsApp or Cryptocurrencies.
4. Invest with a margin of safety. I am not so concerned about how much I will make when I am right but I want to lose the least amount of money when I am wrong. And we all have a track record of being wrong a lot. And that worries me. Therefore I’d rather bet on less risky but less glamorous companies than more glamorous but also more risky options.

Whenever you are sure about something, like 100%, seek an opinion of somebody who has an opposite viewpoint. He may just save you from future pain.

A healthy amount of diffidence is good!