“[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 successful 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 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:
As it relates to portfolio construction, my goal is to make a small number of meaningful decisions. In the words of Charlie Munger, my preferred approach is "Patience followed by pretty aggressive conduct." I run a concentrated portfolio, with a handful of equities accounting for the majority of my portfolio (currently two). In the eyes of a businessman, I believe this is adequate diversification.