The Guy Who Studied Buffett for 25 Years
05 Sep 2024 (13 days ago)
The Posse
- A group of five or six people, all interested in Warren Buffet's style of investing, formed a group that met weekly, sometimes more often.
- The group, which met for two to four years, would gather in one member's midtown office and discuss investment ideas.
- Each meeting, a member would bring a written stock idea to present and the group would discuss it for 45 minutes to an hour.
Farmer Mac
- An individual with a Harvard MBA had limited investing experience but was mentored by established investors like Warren Buffet and Tom Russo.
- This individual invested in Farmer Mac, a government-sponsored enterprise, based on its similarities to Freddie Mac and Fannie Mae, but without conducting thorough due diligence.
- Bill Aman, a more experienced investor, informed the individual of his short position in Farmer Mac, arguing that it was essentially business lending disguised as a mortgage-backed security.
Lessons from going to 9 Tony Robbins seminars
- Attending a Tony Robbins seminar was a turning point, leading to a journey of self-improvement and a shift in perspective.
- The experience of the firewalk served as a powerful metaphor for the potential of human capability when psychology and physiology align.
- A significant personal rewiring involved shifting from an arrogant belief of intellectual superiority to recognizing the importance of interpersonal skills and treating others with respect, exemplified by learning and remembering people's names.
Handwritten notes from Warren Buffett
- A story is recounted about the most successful car salesperson who attributed their success to writing a thousand cards a year expressing appreciation to clients.
- Writing thank you notes, even if not feeling genuinely caring at the time, can cultivate genuine care and interest in others.
- Warren Buffett sends personalized holiday cards as a gesture of appreciation, demonstrating his understanding of the power of small gestures in building relationships.
Don’t study lottery winners
- It is important to focus on avoiding significant losses in investing rather than solely aiming for big wins.
- Studying the habits and routines of successful individuals may not be as beneficial as understanding the underlying principles of their success.
- Immersing oneself in the work and mindset of individuals they admire, even without direct mentorship, can be a highly effective way to learn and grow.
Berkshire vs Index
- Berkshire Hathaway does not have management fees or carry, buying a piece of the company is equivalent to buying a piece of Buffett.
- Investing in Berkshire Hathaway can be a better alternative to index funds because it fosters a stronger emotional connection to the company, potentially leading to better long-term investment behavior.
- An individual's investment strategy should consider the potential impact on their thinking and behavior, with Berkshire Hathaway potentially offering a more personally rewarding experience compared to the impersonal nature of index funds.
Finite vs infinite games
- Finite games have a defined set of rules, a designated playing area, and a clear winner and loser, while infinite games have no defined end, rules, or boundaries.
- Many aspects of life, such as investing and careers, are infinite games, but people often approach them with a finite game mindset, leading to burnout or failure.
- It is important to define a personally satisfying version of success rather than chasing external validation or comparing oneself to others, as this leads to a more fulfilling life.
Be a promiscuous reader
- Readers should not force themselves to read material they do not find engaging.
- Readers should frequently re-evaluate their reading material to determine if it is providing them with valuable insights.
- Readers should embrace a diverse range of reading materials and approaches, selecting books that resonate with their individual interests and goals.