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Explaining Success

December 07, 2013 | About:
The Science of Hitting

The Science of Hitting

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“[Ted] Williams always believed there was no such thing as a natural hitter… there was only one way to be really great: through hard work and practice.”

- Ben Bradlee Jr., Biographer and Author of “The Kid”

Note: This isn’t about investing, and is a one-time diversion...

Listening to the talking heads babble about Warren Buffett is an interesting thing; considering his stature in the investment community, you would think people would take the time to read about the Oracle, or at least skim his fabled shareholder letters. Yet, as I’ve noted previously (here), that’s not really the case; many commentators need to spend a bit more time researching the life and career of Mr. Buffett.

A favorite for the financial media is Warren’s “folksy” nature; they’re convinced that the simplified rationale for many Berkshire investments is a veneer. There’s something that Warren is hiding, and they are intent on finding it.

Most of their explanations come back to the innate – his off the charts IQ (even though he has repeatedly stated that an astronomical IQ isn’t a key determinant of success investing), his photographic memory and ability to recall details from decades ago, or a natural knack for capital allocation. I’m certainly not arguing that’s inaccurate: Warren is undoubtedly in the top 1% on all of these measures, which collectively go a long way in being a successful investor.

But the innate is not in a vacuum; Williams wasn’t born with a bat in his hand, and Warren didn’t emerge with a 10-K either. The combination of hard work, practice, and time is consistently understated as a building block in the formula for success – and I believe that those of us without the natural abilities to match the Warren Buffett’s of the world still have a good shot of doing quite well if we are intensely focused on the factors we can control (maybe I’m just speaking my own book, because I’m firmly planted in that group).

Warren read every book in the Omaha Public Library about investing by the age of 10 – and some of them twice; the voracity with which he has pursued investment knowledge in the ensuing seven decades has only accelerated. Assuming he spent four hours on the average day studying and learning, that’s more than 105,000 hours over the course of his investment lifetime; it’s amazing that twelve years of work can essentially be written-off as secondary in explaining Warren’s success. Just as importantly, this piece of the equation that can be copied by anyone.

I’m writing this article as a note to myself more than anything else – though I believe many of you have shared these feelings at some point in your life. I’ve been enamored by the world of investing and business for six years or so, and have emulated Warren Buffett every step of the way; telling people you wish to follow in the footsteps of the Oracle is like saying you want to be the next Michael Jordan when you’re a kid – people laugh it off as a fanciful dream. My impression is that they believe this is because of some innate disadvantage, not a lack of work ethic – and maybe they’re right; if you’re like me, you didn’t even read a single investment book by age 10 (let alone all of them), and weren’t worth more than many of your teachers when you walked out of high school (as Warren was).

But writing off Warren’s success as what happened in the first nine months of his existence rather than examining what has happened since is nonsensical; concluding that you cannot reach previously unimaginable heights by working your butt off is just as ludicrous. I don’t know if I can ever get within spitting distance of Warren’s investment record; I’m willing to bet he’s light-years ahead of me intellectually, and he had a decade-plus head start over me in the field.

The one thing I do know is that hard work will get me as close as I’m capable of, and claiming defeat will ensure failure; trying is the only way to find out how far you can go – and will likely result in a satisfactory outcome, even if not where you had originally envisioned. Play the hand you’ve been dealt as best you can and let the cards fall where they may – and don’t waste your time listening to those watching who “know” that you have no chance of winning the game.

About the author:

The Science of Hitting
I'm a value investor, with a focus on patience; I look to buy great companies that are suffering from short term issues, and hope to load up when these opportunities present themselves. As this would suggest, I run a fairly concentrated portfolio by most standards, usually with 8-10 names; from the perspective of a businessman rather than a market participant / stock trader, I believe this is more than sufficient diversification.

I hope to own a collection of great businesses; to ever sell one, I would demand a substantial premium to the average market valuation due to what I believe are the understated benefits to the long term investor of superior fundamentals and time on intrinsic value. I don't have a target when I purchase a stock; my goal is to replicate the underlying returns of the business in question - which if I've done my job properly, should be very attractive over many years.

Rating: 4.6/5 (15 votes)

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Comments

Tannor
Tannor premium member - 10 months ago
Great Article Thanks Science,

I thought this quote was very fitting to the concept of your article.

“Gentlemen, we will chase perfection, and we will chase it relentlessly, knowing all the while we can never attain it. But along the way, we shall catch excellence.” - Vince Lombardi
The Science of Hitting
The Science of Hitting premium member - 10 months ago
Tannor, Thank you for the kind words; and great quote by the way - added it to my book :)
vgm
Vgm - 10 months ago
Great piece Science! A couple of other things come to mind:

- investing is as much art as science, which helps explains why IQ is not the whole story; Buffett has the necessary emotional control as well;

- Munger has said he and Buffett are markedly better investors than when they first met; both developed over time; constant reading and learning was key;

- Buffett has often said that he was genetically coded for capital allocation; it was his groove;

- when we are exceptional at doing something, we tend to love and enjoy it, and it's easy to dedicate our time and effort to it. It becomes a virtuous and self-sustaining cycle. Someone once said: "Find something you love doing and you'll never work another day in your life." In that context Buffett says he gets to do what he loves every day and tap dances to the office. That's worth aspiring to.

Thanks for the stimulation.
The Science of Hitting
The Science of Hitting premium member - 10 months ago
Vgm, Agree with all four of your points; thank you for commenting and hope to hear from you again soon!
mbilenkis
Mbilenkis premium member - 10 months ago
Thanks for writeup, Science. “Everything is theoretically impossible, until it is done.” - Robert A. Heinlein
The Science of Hitting
The Science of Hitting premium member - 10 months ago
Thank you Mbilenkis! And agreed :)

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