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Before I start today, let me say a couple words about some of the biggest business news that has occurred.
If you are an investor or following investing like I have for many years, which is that Warren Buffett announced his retirement.
He's going to be leaving Berkshire Hathaway at the end of this year.
So much has already been said.
A lot of it interesting, some of it not so interesting.
I want to add just a couple of comments that I think were most important to me about Buffett and Berkshire Hathaway, which were the things that I think are repeatable, that you and I can actually learn from and do something about.
Because so much of the commentary about Warren Buffett.
What can you learn from him are things that you and I can't actually implement in our own lives.
They're either too complicated, they take too much time, they're only work for someone who's devoting 24 hours a day to investing, or they are lessons that are taken away from the trading environment, the investing environment of the 1960s, that just opportunities that don't necessarily exist anymore.
But there are lots of things that we can learn about investing and money and life from Warren Buffett's 60-year career that I think you and I can take away and implement in our own lives.
Some of these quotes I'm about to tell you came from Charlie Munger, his late business partner.
But all of these, I think, had a major impact on the success of Warren Buffett and Berkshire Hathaway that you and I can use.
Okay, quote number one.
I did not succeed in life by intelligence.
I succeeded because I have a long attention span.
That was Charlie Munger who said that, and I think that is so true about the entire career of Buffett and Berkshire Hathaway as well.
Yes, Warren Buffett is a good investor, of course, but the real secret, literally 99 of his success and wealth came from the fact that he's been a good investor for 80 years.
Buffett made his first investment before Pearl Harbor.
And he was a professional investing manager when Harry Truman was president.
Like this guy's been doing it for a very long time.
And that endurance and longevity and just that long tail, that's where the success came from.
And for you and I and everyone else listening, The biggest and most important thing that you can do to become a better investor, become better with money, is increase your time horizon.
That is not easy to do, but nothing that is worthwhile is supposed to be that easy.
But that's where all the success comes from.
If you want to be a better investor, spend less time thinking about how you can improve your returns and more time thinking about how you can be more durable and having a longer time horizon.
All right, number two. have maximum financial flexibility to face both hazards and opportunities.
That was part of the secret of Berkshire.
Hathaway, too was yes, when the world was falling apart, they did not get sucked into it, but also they had cash and money to take advantage of those opportunities.
What I'm reminded of here is a philosophy of saving like a pessimist and investing like an optimist.
You want to save money with the idea that the world is fragile, in your personal life and in the broader economy, because it is.
It's a constant chain of surprises and mishaps and setbacks.
But you want to invest your money with the idea that if you can endure those setbacks and take advantage of them, the returns for those who can stick around can be extraordinary.
All right, next one here.
This, I think, was from Munger2, who said, Wisdom is prevention.
Wisdom is prevention.
We can talk ad nauseum about what Berkshire Hathaway and Warren Buffett did, The investments that they made, the great trades that they made, the long-term time horizons that they had.
What is equally important, if not more important, is what they did not do didn't get caught up in leverage, didn't have many, if not any scandals, didn't fall for fads, didn't suffer from FOMO.
Wisdom is prevention.
It wasn't what they did, it was what they did not do.
This, I think, is very important for individual investors too, because we are so lucky to live in a world where we have so many investing tools and opportunities at our fingertips.
And if you have 10 to invest, you can open up a brokerage account and invest in a low-cost index fund that lets you invest alongside the most extravagant, incredible businesses in the world.
We're so lucky to live in that world, so fortunate to live in that world.
And it means that really all you need to do to do well over time is not screw up.
The upside is already kind of set for you.
It's not guaranteed, but the opportunity for upside is already set for you.
You just have to not screw up.
Wisdom is prevention.
And then last, this one is very related to that last point, but I love this quote.
The quote is, Berkshire success is an inversion process.
Start out with failure and then engineer its removal.
Rather than asking, how can I get better?
What is the path to success?
Start out by saying, what does failure look like?
What would I end up regretting?
What is failure?
And now how can I just avoid that?
And if you remove The paths, the avenues to failure.
A lot of times what you will see is what you end up with is something that looks a lot like success.
All right.
So getting into this episode, I think it's often true with money and investing, but a lot of things in life, that we are looking for answers to our problems, trying to find the right answers, but we're not asking the right questions to begin with.
That's a little bit cliche.
But I think it's often helpful to come up with a list of questions about your life, about the world, that you don't have any answers to whatsoever.
I've done this a couple of times.
I ended my book, same as ever, with a list of questions for you.
And it was questions that I think almost by definition are impossible to answer.
And so I want to leave you with a bunch of questions today that I will challenge you to ponder within your own life, but with the asterisks on there, that I don't think you can answer these questions honestly.
I think it's too difficult, if not impossible, but they're very helpful, to me at least, to ponder some of these questions about my own life.
So, all right, here we go.
Which of my strongest beliefs were formed off of secondhand information versus firsthand experience?
What do I strongly believe that I just read somebody else's view on versus actually experienced myself.
All right, next one.
If I could not compare myself to anybody else, how would I define a good life?
Next one.
Whose views do I criticize that I would actually agree with if I lived in their shoes?
Who do I envy that is actually less happy than I am?
Looking back, am I any good at anticipating how I would feel and react to risks that actually occurred?
Is my desire for more money based on the false belief that it will solve personal problems that have nothing to do with money?
How many of my principles are cultural fads?
Whose silence do I mistake for agreement?
What kind of lifestyle would I live if no one other than my immediate family could see it?
What events nearly happened that would have fundamentally changed my life for better or worse, had they occurred.
What views do I claim to believe in?
That I know are wrong, but I say them because I don't want to be criticized by my employer or industry.
How much of what I do is internal benchmark, as in it makes me happy, versus external benchmark, as in.
I think it changes what other people will think of me.
Am I thinking independently or going along with the tribal views of a group that I want to be associated with?
Whose approval am I auditioning for?
Which of my principles would I abandon if they stopped earning me praise and recognition?
If I could see myself talk, what would I cringe at the most?
What question am I afraid to ask because I suspect I know the answer and I don't want to hear it?
How much of things outside of my control contributed to things that I take credit for?
How do I know if I'm being patient, which is a skill or stubborn, which is a flaw?
What crazy genius that I aspire to emulate is actually just crazy.
What strong belief do I currently hold that is most likely to change in the future?
Which future memory am I creating right now, and will I be proud to own it?
Am I addicted to cheap dopamine?
As so many of us are on social media.
And last, if I were on my deathbed tomorrow, what would I regret the most?
So again, I don't know if I or you can answer those questions for yourself.
They're very hard to answer.
But I think, rather than spending your time trying to figure out what's right and what the answers are, I think if you ponder some of those questions, maybe you will become a little bit more humble, a little bit more grateful, a little bit more empathetic towards others, maybe even a little bit happier.
And so I will challenge you to think about those and ponder some of those questions, and we'll end it there.
That's it for this episode.
Thanks again for listening, and we'll see you next time.
