Everywhere I turn it feels like I’m inundated with thousands upon thousands of mindless investing quotes that seem profound but don’t actually tell us anything.
Warren Buffett quotes are by far the worst. I love Buffett. I’ve read his biography many times and I follow him on Twitter despite him tweeting about as often as I visit LinkedIn. No, I don’t care that my friend from high school has endorsed me for underage drinking.
Buffett is the master of saying quotable things that don’t actually say anything. Don’t believe me? These are considered to be some of his top investing quotes:
“I don’t look to jump over seven-foot bars: I look around for one-foot bars that I can step over.”
“Diversification is a protection against ignorance.”
“Only when the tide goes out do you discover who’s been swimming naked.”
“Never invest in a business you cannot understand.”
And so on.
It’s not that these are that bad, it’s that they really don’t go beyond anything the average investor doesn’t already know. Diversification protects against risk. Great opportunities are better than mediocre ones. And bull markets make everyone look good.
Well, duh. This is all pretty basic stuff.
Let’s face it. If somebody worth $10 million was sitting in an office somewhere and saying this stuff nobody would care. A few people would enjoy it, but there sure wouldn’t be thousands of people slobbering all over themselves in a race to talk about how smart the guy is.
Besides, Buffett breaks his own rules all the time.
Buffett’s favorite holding period is forever, yet he’s bought and sold big positions in stocks like Exxon Mobil, Suncor, and Tesco.
He’s a famous advocate for concentrated portfolios, yet Berkshire Hathaway has 62 operating divisions and owns 48 stocks. In what world is a portfolio with 110 different businesses considered concentrated?
And he’s staunchly anti-leverage despite using insurance float as a form of free leverage for decades.
There are a million other examples of this, but you get the point. Why should we take these quotes overly seriously when the guy who utters them changes his mind when it’s convenient to him?
They’re not going to make you rich
Investing quotes are like Doritos. They’re light, tasty, and hugely addictive. But if you’re not careful you’ll eat the whole bag and just feel bad about yourself after.
Let’s go back to the Buffett example. Warren Buffett did not get rich because he understands the difference between a concentrated and diverse portfolio. Warren Buffett got rich because he put his nose inside of annual reports for 40 years. Kids? Screw my kids. I gots reading to do.
This comes down to the real problem I have with investing quotes. They’re no substitute to actually doing the work. Yet we believe they are.
It’s much easier to go on Twitter and see what a certain superinvestor thinks about value than it is to crack open an annual report and make it through all of the accounting footnotes. And then read the previous annual report. And the one before that.
No, we’d much rather argue about the state of value investing today or creating mental models or the importance of inverting our thinking. Don’t get me wrong; those are all important things to understand. But then you’ve got to do the work, and that’s where most people drop the ball. It isn’t just about getting the concepts right. It’s figuring out the fine print, too.
Some of that stuff can come from a pithy investing quote. But a lot of people won’t actually learn the lesson without experiencing it themselves.
They don’t work for everyone
The basic rules of getting rich are simple. Save money. Then take risks. Do it right and that capital eventually grows into something much larger.
The details also matter, however. Investors like Walter Schloss and Benj Gallander have done well investing in the trashiest stocks. Buffett, Munger, and John Templeton have done well buying great businesses. Thousands more have gotten rich buying real estate, or starting their own business, or investing in private mortgages.
The point is there are plenty of people who forge their own path and still end up doing very well for themselves. They regularly ignore advice from the greatest investors in history because it doesn’t apply to them.
That’s the lesson here. There’s no reason to copy Buffett 100% of the time. Besides, that route is already pretty crowded. At the end of the day, reading investing quotes will only get you so far. To really understand more than the next guy, you’ve got to do the work. Which is far harder than scrolling through a bunch of one liners.
There’s a certain list that’s been making its way around the interwebz, passed around like a herpes outbreak at a communal farm. You’ve probably seen it, and hopefully hated it just like I did. Aww, you guys really are just like me. We finish each other’s… dinners?
Anyhoo, here’s the list, and it is delightful.
Of course it’s from the World Economic Forum. What, having a meeting in Davos each year isn’t douchey enough for you people?
This list is so dumb, starting with the first thing. EVERYBODY WAKES UP BEFORE BREAKFAST YOU BLUNDERHEADS. You’re already 1/14th of the way there just by being a person who doesn’t jam Eggo Waffles into their mouth while sleeping.
And then they drink water. Or is it coffee? What about milk? Or juice? Or some mystery liquid in a mug with the slogan Men’s Tears printed on it? I have that mug. It’s ironic.
Numbers 3, 4, and 5 are the best though. Apparently you’re supposed to wake up, then exercise, then work on a top-priority business project, and then work on a personal-passion project. Really? How much work are we talking about here? Five minutes? Cause I’d argue you might as well do nothing if you’re only going to dedicate five minutes to something.
And then, after working on two important projects and getting a workout in, it’s not even close to breakfast time. You’ve still got to make the bed, meditate, and spend quality time with both the wife and kids. Obviously as the same time because, y’know, multitasking.
We’re not done yet. You’ve still got to write down things you’re grateful for (productivity lists, obvs), plan and strategist, and then check their email and read the news. Only then, at 4:46pm, can you finally have breakfast. Oh, you fainted from hunger hours ago? Slacker.
These dumb productivity lists
I absolutely hate productivity lists.
I get it. We all want to get more done in a day. If I can up my output from 3,000 words a day to 4,000 words without having the quality all go to hell, I would do it. And I do try stuff to try and make that happen. Some of it even works.
But there’s one thing I’ve realized in life. There’s no set way to doing the things you want to do.
I remember being 18 years old stocking shelves in a grocery store, a job I took because there was no way in hell I was going to go to university. I was making $10 per hour, which was a decent wage for kid fresh out of high school without any experience.
The rest of my graduating class took the more traditional route and went to college. Many of them live in nicer houses than I do. They drive better cars and stay in five-star hotels when they go on vacation, not in the three-star joints my ass usually ends up.
But they don’t have as much money in the bank. Not even close.
Alright, alright. You can stop humblebragging now.
That’s not even a humblebrag, Italics Man. That’s a 100% brag.
What’s the point of my story? For years I did everything wrong. I didn’t have to-do lists and I barely even thought about my productivity. I didn’t set goals or meditate or wake up at 4:30 am. And I sure as hell didn’t network over coffee before breakfast.
All I did was make smart decisions, over and over and over again. And then I worked harder than my peers. The rest all fell into place.
The problem with productivity
I usually fall asleep within 15 minutes of my head hitting the pillow. Sometimes even within five minutes.
But other times I’ll toss and turn as my brain goes a million miles a minute. There’s no turning it off when that happens. The best I can do is distract myself temporarily.
I used to hate it, but t I’ve changed my tune completely. I need uninterrupted time to work out my problems. I’ll think about buying some particular stock or some sort of blog project or whatever. After thinking about it for an hour or two a solution will become obvious and I’ll implement it the next day.
There’s nothing in a productivity log about setting aside time to think. Yet those hours I spend wrestling with my problems can end up being incredibly profitable. If I think about something for two hours and it makes me $5,000, that thinking time is incredibly profitable.
But is it productive? Damned if I know. All I do know is I guarantee your productivity log or whatever it’s called doesn’t have much time for self-reflection or thinking about things. And no, you can’t just schedule that stuff in. It’s not like a meeting with Bob in accounting.
Stop with the obsession
Smart, ambitious people will naturally gravitate to these kinds of things. It’s a byproduct of having those attributes.
But I think the average person needs to channel their inner Warren Buffett. No, I’m not talking about having two wives, although you could do that if it floats your boat. I’d suggest moving to Utah.
Buffett is the master of saying no to things. He doesn’t jam his schedule full of useless meetings and strategy sessions. He understands the power of making a few important decisions that really matter. Much of his time is dedicated to working up to those large decisions.
Compare that to your normal day. How much time is spent on important shit? And how much time is spent answering dumb emails?
The ultimate lesson here is simple. Don’t let productivity consume your entire life. It’s okay to take a little time to sit back, relax, and smell the roses. In fact, you might end up richer doing just that.