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Warren Buffett's genius lies apparently in character not just in intellectual horsepower

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Rammsteinfanboy

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Jun 7, 2017
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I am reading about Warren Buffett, I like his seemingly simplicity,and one writer made a comment, that his genius also lies in his character. That kinda gives me hope, cause it means that there are behaviors that can be emulated by people who are not crazy smart.
He has a long attention span, he does not drown in wall street noise but does decisions based on reasoning. The smartphone generation googles everything, yet
not long enough to go deep in a subject, they are influenced by headlines not by intense research on subjects. Warren and Charlie seem to be much more simpler and clearheaded but I guess that`s because they understand the themes and structures behind complex subjects.
I don`t know I get the feeling they use common sense more, but that`s probably deceiving. That all sounds good, but as I wrote this out, I get the feeling that sounds like fortune
cookies advice. What do you think? I also read that Charles Darwin had also a long attention span, he ignored his career and the competition for 20 years he obsessively
watched smallest occurencen in nature and pondered the underlying principles behind the phenomenon which led to the Origin of Species. Charlie Munger descriped
him as a turtle who outran the hare, which reasonates with me, cause I consider myself a laidback type B personality. Am I not yet informed enough about Warren Buffett
or what? What do you think? Has anybody got successful by copying Buffett?
 

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Kevin88660

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I am reading about Warren Buffett, I like his seemingly simplicity,and one writer made a comment, that his genius also lies in his character. That kinda gives me hope, cause it means that there are behaviors that can be emulated by people who are not crazy smart.
He has a long attention span, he does not drown in wall street noise but does decisions based on reasoning. The smartphone generation googles everything, yet
not long enough to go deep in a subject, they are influenced by headlines not by intense research on subjects. Warren and Charlie seem to be much more simpler and clearheaded but I guess that`s because they understand the themes and structures behind complex subjects.
I don`t know I get the feeling they use common sense more, but that`s probably deceiving. That all sounds good, but as I wrote this out, I get the feeling that sounds like fortune
cookies advice. What do you think? I also read that Charles Darwin had also a long attention span, he ignored his career and the competition for 20 years he obsessively
watched smallest occurencen in nature and pondered the underlying principles behind the phenomenon which led to the Origin of Species. Charlie Munger descriped
him as a turtle who outran the hare, which reasonates with me, cause I consider myself a laidback type B personality. Am I not yet informed enough about Warren Buffett
or what? What do you think? Has anybody got successful by copying Buffett?
They underperformed the market more than a decade, missed the tech trend, and lost out to quantitative trading firms.

Bashed bitcoins..missed out another trend.

And they are proud of not being able to use email!

I would avoid them like a plague. Their attitude of systematically refusing to learn new stuff and dismissing things they do not know.
 

S.Y.

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They underperformed the market more than a decade, missed the tech trend, and lost out to quantitative trading firms.

Bashed bitcoins..missed out another trend.

And they are proud of not being able to use email!

I would avoid them like a plague. Their attitude of systematically refusing to learn new stuff and dismissing things they do not know.

I meet you half way.

Their unwillingness to learn has been negatively affected them. And they missed a lot on certain opportunities. (though in fairness their value investing philosophy goes against trend).

There is a lot turn from that duo. Specifically on managing people and on leadership.
 

Kevin88660

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I meet you half way.

Their unwillingness to learn has been negatively affected them. And they missed a lot on certain opportunities. (though in fairness their value investing philosophy goes against trend).

There is a lot turn from that duo. Specifically on managing people and on leadership.
I think they are highly successful and have points worth learning. But I think young people should think vercritically when trying to learn from them.

There are a lot of “literal interpretation” that could be bad advice. A 25 year old can just think he can get rich “stock picking” or buy an index.

Buffet has been highly successful for his era, basically “bet on America, with leverage and other people’s money, practise value investing in traditional industries.” When he gets famous he leverage on his reputation and scale to do activist investing.
 

Rammsteinfanboy

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They underperformed the market more than a decade, missed the tech trend, and lost out to quantitative trading firms.

Bashed bitcoins..missed out another trend.

And they are proud of not being able to use email!

I would avoid them like a plague. Their attitude of systematically refusing to learn new stuff and dismissing things they do not know.

They deliberately only invest in businesses they understand, they even said only they only invest when the odds are heavily in their favor and only go all in on those occasions, they are not risktakers, but their unwillingness to not jump on trends and ignore pressure but to basically wait it out for years and ignore the noise, I dont know there is something to be said about that. He admits though, that has been a mistake but investing in apple still reflected his philosophy which is investing in consumer company who have competitive advantages beyond "just having new cool stuff".

Its refreshing to me because the popular meme is a hard charging type a risktaker. I am a stubborn lazy mule, so I am happy there is a exception to the rule.
 

Kevin88660

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They deliberately only invest in businesses they understand, they even said only they only invest when the odds are heavily in their favor and only go all in on those occasions, they are not risktakers, but their unwillingness to not jump on trends and ignore pressure but to basically wait it out for years and ignore the noise, I dont know there is something to be said about that. He admits though, that has been a mistake but investing in apple still reflected his philosophy which is investing in consumer company who have competitive advantages beyond "just having new cool stuff".

Its refreshing to me because the popular meme is a hard charging type a risktaker. I am a stubborn lazy mule, so I am happy there is a exception to the rule.
They made their fortune in an era of high growth in U.S. economy, debt fueled consumption and rapid globalization. Even boring business do grow fast.

They have access to low cost borrowing and cheap leverage- through their insurance company ownership. If you read Buffett biography he started investment partnership to convince his rich network to park their money to him. That was how he started.

The problem is you will not make serious money just by investing in Apple today just investing your own money.

The world is struggling to find the next engine of growth, global assets are likely not going to get 30x in the the next 30 years, in real term.

Buffet being ranked the richest person in the world for being an investor could be a misleading role model for young people. In reality people get rich either through having an high income or owning a business. Smart investing is of the least importance.
 

MarkLavagne

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Jan 27, 2019
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They underperformed the market more than a decade, missed the tech trend, and lost out to quantitative trading firms.

Bashed bitcoins..missed out another trend.

And they are proud of not being able to use email!

I would avoid them like a plague. Their attitude of systematically refusing to learn new stuff and dismissing things they do not know.

You can't catch everything - they did miss some opportunities, but oh boy - unless you can show better results than Munger and Buffet I'd suggest to stay away from your advise. And something tells me you can't show it (please don't take it personally mate).

To OP - you certainly can learn something from people who achieved something in life (and also from those who failed!). I highly recommend Belevin's book "From Darwin to Munger", it will certainly help you to look at things under different angle.
 

SamRussell

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As a side note, it is possible to increase your IQ / intelligence / decision making skills over time.
 

Kevin88660

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You can't catch everything - they did miss some opportunities, but oh boy - unless you can show better results than Munger and Buffet I'd suggest to stay away from your advise. And something tells me you can't show it (please don't take it personally mate).

To OP - you certainly can learn something from people who achieved something in life (and also from those who failed!). I highly recommend Belevin's book "From Darwin to Munger", it will certainly help you to look at things under different angle.
It is more about relevance than anything. Learning “value investing” from Warren and Buffet and expecting to get rich from picking the next Coca Cola is like learning to be the best archer in an age of fire arm.

Go to any top investment firm today, they are not looking for analyst interpretation financial statement. They look for people who can either using python to code or math phd who can form trading hypothesis to be tested.

Secondly investing one’s own money will reach you nowhere. Investors get rich investing other people’s money. Most young people do not realize that, that unless they want to professional money manager (which is Dead end today for 99.99 percent due to heavy regulation and overhead cost), spending too much time learning how to invest is a waste of time, that should be better invested in skills to generate income (either through work or business).

Unfortunately I saw most young people who claim to be Buffet fan adopt a “Naive literal interpretation” to learn from Buffett, thinking that security analysis skill will multiply their wealth.
 

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Every day Warren wakes up and does what he enjoys doing; what else is there?
 

Edd--19

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I was speaking with my step-dad some time ago. He's done well with his pension and retired a few years ago with £1.2 million from some good investments.

We were talking about whether we would invest in Facebook. I answered no and he shared with me that one of the investors he follows (I can't remember his name) has 4 criteria he judges every investment decision on.

One of those is social responsibility. This investor didn't believe that Facebook was socially responsible and therefore refused to do business with Facebook stock.

Whether or not it's the right (financial) decision, I don't know, but this investor is successful (of course take with a grain of salt as I can't verify their identity).

The point I'm making is, it's a matter of having a process that works for you and being disciplined about it. Warren Buffet found a process that works for him and works through it with religious-like diligence. It's helped his success. It's part of his character.

Character is built, and forged by the decisions you make on a daily basis. This is why he has succeeded (again, take with a grain of salt as I am not successful, yet).
 

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MarkLavagne

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Jan 27, 2019
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It is more about relevance than anything. Learning “value investing” from Warren and Buffet and expecting to get rich from picking the next Coca Cola is like learning to be the best archer in an age of fire arm.

Go to any top investment firm today, they are not looking for analyst interpretation financial statement. They look for people who can either using python to code or math phd who can form trading hypothesis to be tested.

Secondly investing one’s own money will reach you nowhere. Investors get rich investing other people’s money. Most young people do not realize that, that unless they want to professional money manager (which is Dead end today for 99.99 percent due to heavy regulation and overhead cost), spending too much time learning how to invest is a waste of time, that should be better invested in skills to generate income (either through work or business).

Unfortunately I saw most young people who claim to be Buffet fan adopt a “Naive literal interpretation” to learn from Buffett, thinking that security analysis skill will multiply their wealth.

You're right about relevance here - the only way to judge one's performance is to look at consistent returns over years. How many hedge funds or investment firms who are using python/R and bunch of math PhDs who outperform BH over long run? I bet your list won't be long.

Their approach is still relevant and will be so for a long while since market behaviour didn't change much over last 50 years - FOMO and greed are still there playing major roles for movements. We can see influx of retail investor lately, constituting substantial share of market players. They do behave differently compared to traditional investors/traders. That perhaps the most significant change.

For OP I suggest not to focus on Munger/Buffer investment approach per se but to look at their decision-making process. It's quite valuable wisdom to be at least aware about.
 

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