Buffett & I
When I first started investing in 2000, I knew absolutely nothing about the subject. The first book I read on the subject was Robert Hagstrom’s “The Warren Buffett Way”. One of the reasons most of us who started investing around that time are Buffett followers is because the books that were mostly available were about him. At most, you would see books by Peter Lynch.
Over the next decade, I had probably read nearly everything I could get my hands on, on Buffett and Munger. Today, when Buffett has decided to hang up his boots, it gives me time to reflect on my relationship with him (and Munger).
Buffett and his investing principles
As a long-term investor, it is very easy to understand and imbibe Buffett’s investing principles.
Buy great businesses.
Hold them for the long term.
Look for simple businesses that you can understand. Ignore those that you don’t.
The market is irrational. Make it work for you.
Look for earnings power and moats in businesses.
Wait for your opportunity and buy when the odds are in your favour.
Don’t lose money.
There is an entire industry that has cropped up that takes Buffett’s wisdom and regurgitates it in various forms. But his wisdom is timeless.
Buffett & Munger - the dynamic duo
From Buffett, it’s a short leap to Charlie Munger. Munger was a polymath, intensely curious about the world and had a razor-sharp mind that was interested in a variety of topics. Where Buffett was unidimensional and focused only on investing and business, Munger spent his time on understanding and creating better mental models for the world. Buffett was always politically correct in his words, but Munger never so.
Munger’s ability to synthesise the world better led him to approach investing slightly differently than Buffett in his initial years. Over time, this led to Buffett changing his style from pure Grahamian cigar-butts to buying quality businesses.
My takeaways from Buffett and Munger
I started my investment journey as a “Buffetian”. Over the years, I have tried to merge my own learnings and experiences into my process like what Munger has taught us to do.
Over the years, I have deviated from following the approach that Buffett uses and tried to merge my learnings and experiences into my process, like what Munger has always suggested, to what is best suited for my temperament. The one thing I have always tried to imbibe from them is the life lessons I have received from them.
A good life is a continuously improving one. Stay curious. Read widely. Seek truth over confirmation.
Always invert your problems and look for solutions.
Reputation is critical. It takes decades to build it and minutes to lose it.
Always try to give more than you receive.
Choose the people you spend time with carefully. You are the sum total of the five people you spend most of your time with.
Avoid envy, fear and resentment.
Wealth is freedom, not flaunting. True wealth is living on your own terms.
Always focus. The difference between successful people and really successful people is that really successful people say no to almost everything.
Have a multidisciplinary approach to life.
Be rational, ethical and consistent.
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