On Sunday 21-Apr-24, there was a brilliant piece of article in The Hindu by Devdutt Patnaik. It was about LGBTQIA+ tales in temples. Anybody familiar with the works of Devdutt Patnaik would know of his vast knowledge, especially of Hindu mythology. And he has a brilliant way of expressing without hurting anybody. Imagine, in today’s society being able to stand up and talk about LGBTQIA+ and that too about their depiction in temples! And last when I checked, no one has asked him to leave India and go to Pakistan.

What I found interesting about the article was that we were aware, tolerant and maybe even accepting of the LGBTQIA+ community way back then. But today, the narrative is that these are western imports. For example, in 2006, I was having lunch with a coworker in USA and this coworker was also an Indian. She said, while her children were with her in the USA, she plans to send them to India before they learn “bad things” like LGBTQIA+ (that term did exist back then). In other words, she was of the opinion that LGBTQIA+ existed only in the west.

That reminded me of the bed of Procrustes.

According to Greek mythology, Procrustes was sort of an evil inn keeper and he had an iron bed. Guests would be invited to stay at the inn and sleep on the iron bed. Those who were bigger than the bed would have their head and legs cut off until they fit the bed. Those who were smaller than the bed would be stretched until they fit the bed (and die in the process of stretching).

The Bed of Procrustes is a metaphor for our our ideas of the world, our preconceived notions, our biases, our prejudices and opinions. When the reality does not match our ideas, we’d rather make reality fit the Bed than discard the Bed.

For example if you take people who have opposite view points say like a Socialist and a Capitalist or an Atheist and a Believer or a BJP supporter and a Congress supporter and you present them with facts- they will question the source, the validity, the methodology, the data, the facts etc. etc. but will not change their view point. They want to fit the reality to their internal narrative rather than adjust the narrative to the new fact. You see, it is easier to be at peace when you have an opinion and you can find facts support the opinion. Confronting an opinion, questioning it or even changing your opinion is hard and uncomfortable. How many times have you had the feeling: I have been wrong all my life?! I am guessing, not that many.

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As an investor, I have to frequently confront the many Beds in my head. And in many an instances, I admit I have behaved like Procrustes.

When I first started as an investor, I was of the opinion that Buffett-Munger way of finding businesses, high on quality maybe not so high on growth was the only way to invest. I looked down upon commodity businesses, businesses without moat etc. etc. Then during Covid I met a few good men who changed my mind for me. Now, I am more open to looking at different kinds of businesses from across all spheres. If I had remained Procrustes, I would have been a far lesser investor.

Here is another example. In 2016-17, I came across this company called Thyrocare. What was so wonderful about this company was that it was the World’s lowest cost diagnostics company. They were able to offer diagnostic tests at prices no one else could match. And the CEO was a fantastic operator, living a simple and frugal life etc. At that time, there were just 2 diagnostics companies that were listed- Dr. Lal and Thyrocare. And since I loved Thyrocare so much, I invested in it. (You can read my blog on Thyrocare that went viral in 2021 here.)

If Thyrocare had the lowest prices, Dr. Lal’s tests were expensive. If Thyrocare had a limited menu like McDonald’s, Dr. Lal was the running the equivalent of a fine dining restaurant. You can see my Bed of Procrustes from a presentation I made to my friends in 2020, below.

That was my simple mind saying: “If Thyrocare is good, then Dr. Lal is bad”. And therefore since I invested in Thyrocare, my mind said do the opposite: don’t invest in Dr. Lal. In fact, I didn’t just not invest in Dr. Lal. Like Procrustes I started mentally chopping Dr. Lal by telling myself that it is not a good business, it is not pro society, they are sitting on cash and a poor capital allocator etc. etc. But what my simple mind failed to understand was that Dr. Lal was just as capital efficient as Thyrocare. And Dr. Lal was expanding too and so the incremental revenue growth would lead to a far higher incremental profit growth (what we call as Operating Leverage).

My guru Warren Buffett started life as a cigar butt investor, looking for fair businesses at throwaway prices. However, he realized the limitations of that style of investing and switched to investing in wonderful businesses at fair prices. If not for the willingness to switch, he may not become the multi-billionaire that he did and the world may never have gotten to know about him.

Far away from investing in the world of Cricket, even Sachin Tendulkar at first was dismissive of the power of analytics when planning the strategy. But he too quickly changed his mind about it.

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So your takeaway from this blog should be: be it humans (and their orientation) or investing or anything else, keeping an open mind can be your superpower. With a closed mind you are nothing more than Procrustes fitting reality to your narratives rather than the other way around.

Cheers!