As an entrepreneur, there are many times when I have to hire people who are quite older and have a longer professional career than myself. In order for myself to stay on top of the game, I have resorted to try reading as much as possible.
My current read is a read that is actually quite dear to me. I try to read this book at least once a year, and while I am only in my 3rd year reading this, I glean new information every time, because every time I reread this book, I am at a stage in life that is different from the previous time I read the book. What book is this you may ask?
While the name Buffett has only entered my life less than ten years ago, after it did, it became a symbol of the type of person I wanted to become. While the media have portrayed this man into an almost god-like character, I knew that there must be a human aspect behind this idealistic media portrayal.
Here are a few quotations/aspects from the book up until my current read position that I wanted to share with you
- "Buffett is not a simple person, but he has simple tastes"
- There is always a need to have a cash position
- The Importance of Reputation
For me, these really hit home. Let me try to explain ... ...
"Buffett is Not a Simple Person, but has Simple Tastes" means Depth over Breadth
In this world where much of arguments bounce around between breadth and depth, I would like to go towards the argument of depth. Having simple tastes is crucial is making sure that you know your priorities in the world and you make sure you really go all out in your priorities. This is much more evident after becoming a dad. Older adults have always told me to stop doing startups after I had a family. While I don't plan to go that route, I see the wisdom of what they have been saying. You really have to go out of your way to make time for anything and a startup is prone to really screw up your schedule so that it is truly chaotic.
For a while, I've always been wanting to try new things, be pretty good at a lot of little stuff (you see some friends doing this, some friends doing that, and you also want to dabble in it), but as I put perspective on what I have learned so far, here's my big takeaway: most people can get better than average with a little bit of practice. That means for me, people who champion breadth will ultimately lose the race. Why? My logic is that there are way too many people practicing breadth and therefore probability-wise you lose. On the flip side, in order to be truly good at something, it will take years and years of hard work and gruel to get good at the skill you want to be the best at. A lot fewer people digging to be the best. The competition may be harder at the end, but the perseverance and crossing the finish line will feel that much better!
Asset Rich, Cash Poor
As an entrepreneur, I have always jumped at opportunities when I have had the ability to do so, whether the outcome of those opportunities was good or bad. While this quotation refers to Buffett and not myself, because I tend to think of my life as comfortable, not cushy, I have learned that it is necessary to have a cash pool on hand. With the startup blood in me, I tend to make use of opportunities where I will not be able to convert my investments into cash when the need arises. This is one of the biggest mistakes that I have made within the past decade. While cash may not produce the biggest ROI, there is no predictive indication that you won't need cash in the future. And when you have that cash when the need arises, the peace of mind you have is quite priceless.
Also, from personal experience, investing in cash at all of the opportunities little bit by little bit has a worse outcome than jumping at what I tend to call the whale opportunities. This is comparable to Buffett's approach compared to his idol, Graham's approach. Buffett chose to put all of his eggs in a few baskets, concentrating them on bets that he did the homework on, ultimately investing in himself, trusting in himself.
The Importance of Reputation
The quotation below is the epitome of Buffett's life.
I'll stop my blabber here for the day.
Have a great week everyone!