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Warren Buffett is 85---Let's talk about one thing we have each learned from him


AzCactus
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I learned the power of the inner scorecard.  Although this isn't related to investing, it's powerful, enduring and valuable.  If I could ask him one question it would be if he regrets never selling his Coca Cola stock.

 

Buffett did say in 2004, "Clearly, Berkshire’s results would have been far better if I had caught this swing of the pendulum. That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged. Our huge positions add to the difficulty of our nimbly dancing in and out of holdings as valuations swing.

 

Nevertheless, I can properly be criticized for merely clucking about nose-bleed valuations during the Bubble rather than acting on my views. Though I said at the time that certain of the stocks we held were priced ahead of themselves, I underestimated just how severe the overvaluation was. I talked when I should have walked."

 

I've learned so much from Buffett it's wonderful to reflect back on. Only Charlie Munger and Elon Musk have helped shaped my life and worldview as much as he.

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The most important thing I learnt from him is - there is no one thing. Each time I read one of his letters randomly, I learn something new. Whether it is a new insight or new philosophy or general approach to way he conducts his business, there is something new.

 

He taught me investing at its core is best when it is kept simple

He taught me the importance of rationality

The concept of whether I would buy the whole business if I had the money, saved me so much money by helping me avoid unnecessary catalyst driven bets

I thought I understood compounding but after seeing him do it in practice, it gave me a whole new perspective on just letting things compound.

 

Finally, living a modest life, doing the thing you love with humility and self deprecating humor. He continues to teach us that through example. What better way to lead one's life.

 

I agree with others that if you follow his ideas, it can change your life.

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Okay, now that I got the elephant in the room out of the way, the most important thing I learned from Warren Buffett comes from his speech at the University of Florida a few years ago:

 

I was going to do the same things when I had a little bit of money as when I had a lot of money. If you think of the difference between me and you, we wear the same clothes basically (SunTrust gives me mine), we eat similar food—we all go to McDonald’ s or better yet, Dairy Queen, and we live in a house that is warm in winter and cool in summer. We watch the Nebraska (football) game on big screen TV. You see it the same way I see it. We do everything the same—our lives are not that different. The only thing we do is we travel differently. What can I do that you can’t do?

 

It gave me a significant amount of perspective.

 

http://tilsonfunds.com/BuffettUofFloridaspeech.pdf

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He taught me perspective, how to look at big picture and developing ideas. In fact now I look at most things like that and it did amazing things for me. He always come up with something original to say about companies, which is his  own analysis, not something he read somewhere. He has turned a physican into a devout value investor and because of him, I learned that, just like medicine, value investing is also scientific art !

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Okay, now that I got the elephant in the room out of the way, the most important thing I learned from Warren Buffett comes from his speech at the University of Florida a few years ago:

 

I was going to do the same things when I had a little bit of money as when I had a lot of money. If you think of the difference between me and you, we wear the same clothes basically (SunTrust gives me mine), we eat similar food—we all go to McDonald’ s or better yet, Dairy Queen, and we live in a house that is warm in winter and cool in summer. We watch the Nebraska (football) game on big screen TV. You see it the same way I see it. We do everything the same—our lives are not that different. The only thing we do is we travel differently. What can I do that you can’t do?

 

It gave me a significant amount of perspective.

 

http://tilsonfunds.com/BuffettUofFloridaspeech.pdf

 

The biggest thing wealth affords is the ability to not have to answer to anyone but yourself, and certain laws. It doesn't even take that much; mid hundreds of thousands at the low end, probably, in certain areas of the U.S. and depending on your lifestyle.

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Buffett taught me how easy it is to make money!  I chanced on Buffett and BRK in my late teens and it immediately made sense to me and i dedicated a few years to studying and learning everything I could about him and then slowly implemented what i learnt.  And over the subsequent decades everything unfolded logically and pretty much as expected.

 

It blows my mind how so many people don't pay attention.  I have a young social acquaintance who told me he's really interested in investing a year ago and I said he should study Buffett and learn how to value cash flows.  I bumped into him again 6 months ago and I reiterated my suggestion and made a couple of book suggestions.  Just the other day we were at a birthday party and he lent over and said with complete sincerity: "I know you're focused on the Buffett/Value approach but I have been spending a lot of time studying technical signals and I've decided to do a course on technical analysis".  I said: "Very interesting. There are so many good way to approach the market".  And we both nodded seriously at one another and went on our ways.  Over the last two decades I've only come across a handful of people who pay attention.

 

Buffett makes repetitive chitchat with Becky Quick a bit too much these days, but that doesn't change the fact that the man is a god.  He's to investing what Euclid is to Geometry.  And anyone interested in the logic of money making who doesn't spend a few years studying Buffett is insane.

 

 

 

 

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Buffett taught me how to have a thing for blondes.  Or just attractive lady reporters in general.

 

Also, to never criticize someone specifically, rather in category.  And to give praise specifically.  One more, to really focus on the predictability of the business and have patience.

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In addition to many things already mentioned, he really helped me embrace a contrarian mindset. I'd describe myself as a natural contrarian (through life in general and now in investing) which would sometimes make me feel like an outsider when I was younger. Buffett made me realize that having alternate worldviews and kind of marching to the beat of your own drum is often far better than accepting the status quo groupthink of society.

 

On a separate note, one of my favorite Buffett quotes is one of his simplest: "You have to go to bed wiser than you got up." Even when I'm traveling or on vacation or whatever it is, I always try to learn something or become a better person every single day. Small efforts day in and day out compound over many years and end up making a big difference later on.

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