Nic Liberman is a Melbourne-based investor whose fascination with the way Warren Buffett views the world inspired him to write his first book, Warren Buffett: Life Lessons from a Cheerful Billionaire. In this guest post, Nic explains what he learnt about how to approach investing from studying how one of the world’s richest men approached life in general.
If, as the old saying goes, the love of money is the root of all evil, then it’s surprising or perhaps reassuring that we can turn to someone who has pursued money so vigorously for good advice on how to live.
In researching Warren Buffett for my book, Being Warren Buffett: Life Lessons from a Cheerful Billionaire, I discovered that Buffett has within him, by his very nature, the perfect combination of helpful qualities that you could ever wish to bring together in an ideal investor. He has a charismatic personality, a wonderful way with words, irresistible charm and an enormous intellect. His equal would be difficult to find.
Does this necessarily mean that all “investment hopefuls” should pack up and go home? Or is there something to be learned from the essential features that make up Buffett’s brilliance as an investor, while still remaining ourselves? Is there some way in which we can understand the nature of his exceptional ability and integrate it into our own natural style, without simply mimicking him?
In seeking an answer to these questions, I interrogated the Buffett that is revealed through his writings. I sought to discover what the essential qualities of his genius are and how they interact to create a certain kind of whole. I did this because it had always struck me as odd that so few commentators have paid any heed to his personality structure − the foundation of the man that is Warren Buffett and the source of his acclaimed actions in the world. For me, the lack of attention to these aspects reflects a widespread tendency to overlook the journey of the self – of who one really is and what one’s life is really about.
It seems to me that there is great danger in rushing to take advice without placing it within the context of the individual personalities giving and receiving it. Let’s take a piece of ‘technical advice’ to illustrate what I mean. Buffett suggests that it is important to have the capacity to survive a 50 per cent drop in price in a stock one owns. This advice works only when the person taking the advice is, like Buffett, extremely diligent and rigorous in his understanding of his stocks and the market; and not sloppy, ill-informed and prone to having a beer while watching his stocks decline by another 50 per cent, heeding the essence of Buffett’s advice with ease.
If we want to be successful investors, it is not sufficient to take Buffett’s advice. We need to discover who we are by questioning ourselves, looking into ourselves and finding an investing style that is respectful of who we are. This is no small challenge but is undoubtedly a worthwhile one because, if we do not understand who Buffett is and who we ourselves are, we cannot fully digest his advice.
Indeed, the avoidance of this kind of exercise could go some way to explaining why Buffett’s generous advice has not helped anyone achieve close to his level of success.
If we can come to know ourselves and find a way of investing that is honest and reflective of who we really are, we have a much greater chance of succeeding. We can then feel at home there – committed, connected and engaged − to spend sufficient time developing our mastery without distractedly looking elsewhere at what the rest of the world is doing. The significance of finding a place where we belong shouldn’t be underestimated. It has the capacity to hold us to our work in a powerfully connected way and also to energise us with the level of intensity that is required for major achievements.
A further surprising benefit of studying Buffett was the realisation that I was learning something more than how Buffett’s qualities facilitate the way he invests: I was learning how to live a good life. And so, in many ways, my book equally hints at what qualities promote a good life, such as loving people, being loyal, thinking independently and accepting our limits.
I have no interest in making judgements about how people should live and what should be important to each individual, and do not suggest that we should emulate Buffett, but it has struck me that there is much to be gained from the way Buffett deals with some of the biggest and most important issues in life.
Buffett’s overall level of emotional maturity – his ability to accept life as it is and people as they are – is also reflected in the way he invests. And it is because he invests in this way, attuned to who he is, that he is so successful.
While I support the idea of knowing who we are and finding a way of investing that is in tune with our personalities, I am not suggesting that it is always helpful to just be the way we are. It is regrettably true that the ‘way we are’ is sometimes very unhelpful or destructive.
Buffett is lucky. He is lucky in the sense that he has the personality that enables him to be a good investor. He can simply “be himself” because all the qualities he has and the way they hang together are conducive to being a great investor. Most of us are not so lucky and need to struggle to overcome those aspects of our selves that prevent us from being successful investors, whether they be our impatience, our ruthlessness or niceness. But even if it’s not our natural inclination and even if we can only achieve some partial approximation in this struggle, we may give ourselves a better chance of a good life.
Of course one cannot overlook the hard work, the time and energy that Buffett has put into cultivating his gifts. But it is also true that many of us could apply ourselves with equal determination and still fall far short.
I have learned an enormous amount from Buffett and through him I have begun the lifelong journey of understanding myself. My hope is that we can all be ourselves but be real with ourselves. To acknowledge our strengths but to equally understand that some parts of who we naturally develop to be might hinder us on our path to success
Ultimately, the qualities I have described in Buffett exist in all of us, in one way or another. Perhaps it is through our understanding of the way in which these qualities exist and interact within Buffett that we can discover how to both harness and battle these qualities in ourselves to become the kinds of investors that most naturally suit our personalities.
* Warren Buffett: Life Lessons from a Cheerful Billionaire is on sale now.
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