Wit. Wisdom. Value Investing.
This is a Warren Buffett birthday post, and like all birthday wishes, I will not take long. This message will never reach Mr. Buffett, but I silently hope the thoughts form some kind of waves and time-travel to reach him before he celebrates his 100th birthday.
Happy birthday to you.
Trust you are doing well, feeling young at 91, and in the pink of your health.
Rework by Jason Fried is one of the best books I have ever read on starting up. Jason has condensed his wisdom in starting and running a business into pithy, one-page, chapters.
One of the interesting chapters from the book is about the idea of being a curator. In this, Jason writes –
You don’t make a great museum by putting all the art in the world into a single room. That’s a warehouse. What makes a museum great is the stuff that’s not on the walls. Someone says no … There is an editing process. There’s a lot more stuff off the walls than on the walls. The best is a sub-sub-subset of all the possibilities.
Re-reading this chapter reminded me of Costco, one of the world’s largest wholesale retailers and among the very few that have shown remarkable resilience in an industry that has been subjected to increasing pressures from online retail.
[Read more…] about Is Your Stock Portfolio A Museum or A Warehouse?
It was Valentine’s Day in 1990. The Voyager 1 space probe, which had completed its primary mission, was leaving the Solar System.
At the request of astronomer Carl Sagan, the American space agency NASA commanded Voyager to turn its camera around and take one last photograph of Earth, across a great expanse of space. The photograph that got clicked was from a distance of about 6 billion kilometers (same as 240,000 round trips from Mumbai to New York).
In the photograph, against the vastness of space and among bands of sunlight scattered by the camera’s optics, Earth appears like a ‘pale blue dot’ (that’s what the photograph was named) that is smaller than a pixel.
Morgan Housel, who appears on The One Percent Show tomorrow, tweeted this four years back –
Just that doing this is not that easy.
The idea of buying and holding high-quality businesses over a long period of time is simple. Everyone knows that, and even those who don’t practice it appreciate that this works with most high-quality businesses as history has proven time and again. But then, it’s important to understand that the action of not doing anything over such a long period of time involves hundreds of decisions over months and years that lead to such inaction.
Like this –
So, overall, it’s not easy. And it’s not supposed to be easy.
But if you have done your homework well, and keep your eyes and ears open, ‘shut up and wait’ remains the best bet in your pursuit of wealth creation from stocks.
And like Frank Partnoy wrote this in a brilliant article many years back –
If we are limited to just one word of wisdom about decision-making for children born a hundred years from now, people who will have all our advantages and limitations as human beings but will need to navigate an unimaginably faster-paced world than the one we confront now, there is no doubt what that word should be.
Wait.
Better, shut up and wait.