Richer, Wiser, Happier.
This has been my favourite investing book of 2021.
Here's 20 of my favourite quotes and lessons:
Thank you @williamgreen72
This has been my favourite investing book of 2021.
Here's 20 of my favourite quotes and lessons:
Thank you @williamgreen72
1. Bet big but infrequently
You have to be like a man standing with a spear next to a stream. Most of the time he’s doing nothing.
When a fat juicy salmon swims by, the man spears it. Then he goes back to doing nothing. It may be six months before the next salmon goes by.
You have to be like a man standing with a spear next to a stream. Most of the time he’s doing nothing.
When a fat juicy salmon swims by, the man spears it. Then he goes back to doing nothing. It may be six months before the next salmon goes by.
2. Read a lot + Patience
How long can he go without buying? “Oh, I can wait ten years—even longer,” Chou replied.
In the meantime, he studies stocks that aren’t cheap enough to buy, hits balls at a golf range, and reads two hundred to four hundred pages a day.
How long can he go without buying? “Oh, I can wait ten years—even longer,” Chou replied.
In the meantime, he studies stocks that aren’t cheap enough to buy, hits balls at a golf range, and reads two hundred to four hundred pages a day.
3. Optimize for peace of mind, not just profits
Buffett made it clear that Berkshire’s decentralized structure was never designed to maximize profits.
It simply suited his character to oversee many businesses in a hands-off manner, trusting his CEOs to use their freedom wisely.
Buffett made it clear that Berkshire’s decentralized structure was never designed to maximize profits.
It simply suited his character to oversee many businesses in a hands-off manner, trusting his CEOs to use their freedom wisely.
4. Wealth buys you control over your schedule
On a typical day, Pabrai sleeps late and arrives at his office after 10am. Like Buffett and Munger, Pabrai spends most of the day reading.
He takes a guiltless nap most afternoons, then resumes reading until late in the evening.
On a typical day, Pabrai sleeps late and arrives at his office after 10am. Like Buffett and Munger, Pabrai spends most of the day reading.
He takes a guiltless nap most afternoons, then resumes reading until late in the evening.
5. Struggle gives our lives meaning
I’ve never thought it wise to pursue pleasure.
There must have been some deeper reason why God created human beings. And one of the fairly obvious things is that the people who are busy with useful work are happier than the ones who are idle
I’ve never thought it wise to pursue pleasure.
There must have been some deeper reason why God created human beings. And one of the fairly obvious things is that the people who are busy with useful work are happier than the ones who are idle
6. Narrow down the key variables that matter.
"I don’t build models anymore. It’s stupid." Instead, he concentrates on three or four critical issues he believes will drive the business.
“For every company, there are a few key investment variables. The rest is noise"
"I don’t build models anymore. It’s stupid." Instead, he concentrates on three or four critical issues he believes will drive the business.
“For every company, there are a few key investment variables. The rest is noise"
7. Find good management teams, and let them compound wealth for you.
“If they’re thinking rationally and thinking about the long term,” says Sleep, “you can subcontract the capital allocation decisions to them.
You don’t have to be buying and selling shares.”
“If they’re thinking rationally and thinking about the long term,” says Sleep, “you can subcontract the capital allocation decisions to them.
You don’t have to be buying and selling shares.”
8. Risk is not knowing what you own
It was less risky for them to own a small number of stocks than to own hundreds.
“We knew that we didn’t know many things. So it made sense to only have a few shares because those were the only things we understood and ever really knew.”
It was less risky for them to own a small number of stocks than to own hundreds.
“We knew that we didn’t know many things. So it made sense to only have a few shares because those were the only things we understood and ever really knew.”
9. Know what amount of $$ is enough for you
“Once we had proved what we wanted to do running Nomad, it was very obvious to both of us that the job at hand was to give the money back to society"
“It lowers the risk of us being bent out of shape by having too much money.”
“Once we had proved what we wanted to do running Nomad, it was very obvious to both of us that the job at hand was to give the money back to society"
“It lowers the risk of us being bent out of shape by having too much money.”
10. Think long term
“It’s all about deferred gratification".
"When you look at all the mistakes you make in life, private and professional, it’s almost always because you reached for some short-term fix. And that’s the overwhelming habit of people in the stock market.”
“It’s all about deferred gratification".
"When you look at all the mistakes you make in life, private and professional, it’s almost always because you reached for some short-term fix. And that’s the overwhelming habit of people in the stock market.”
11. Environment influences your behaviour
Sleep and Zakaria set themselves up in a peaceful office above a Chinese herbal medicine store, far removed from the frenetic action.
They were so detached from all the excitement that they likened themselves to hermits or monks.
Sleep and Zakaria set themselves up in a peaceful office above a Chinese herbal medicine store, far removed from the frenetic action.
They were so detached from all the excitement that they likened themselves to hermits or monks.
12. Buy for keeps. Not to flip. Think like an owner.
“It’s been my experience that the richest people were those who found something good and held on to it.
The people who seemed the least happy and the most frenzied are those that are always chasing the next hot thing.”
“It’s been my experience that the richest people were those who found something good and held on to it.
The people who seemed the least happy and the most frenzied are those that are always chasing the next hot thing.”
13. Develop pattern recognition
"The more companies you can analyze, the more cash-flow statements you can go through—and go through every line of—the more good ideas you’re going to find and the better the performance is going to be.
There’s no substitute for hard work.”
"The more companies you can analyze, the more cash-flow statements you can go through—and go through every line of—the more good ideas you’re going to find and the better the performance is going to be.
There’s no substitute for hard work.”
14. Fall in love with boredom
“I try to read four, five, six, seven hours a day, seven days a week,” he says.
“I have no hobbies. I have never golfed in my life.… It’s just my personality—always trying to get smarter, to learn.”
“I try to read four, five, six, seven hours a day, seven days a week,” he says.
“I have no hobbies. I have never golfed in my life.… It’s just my personality—always trying to get smarter, to learn.”
15. Financial statements only tell you about the past. Look beyond the numbers. Quality matters.
“The problem,” says Lountzis, is that qualitative factors such as adaptability or courage “are not measurable” in financial statements, which offer a quantitative record of the past.
“The problem,” says Lountzis, is that qualitative factors such as adaptability or courage “are not measurable” in financial statements, which offer a quantitative record of the past.
16. Exercise restraint in your emotions
Munger has also learned to control certain toxic emotions that would corrode his enjoyment of life.
“Crazy anger. Crazy resentment. Avoid all that stuff. I don’t let it run. I don’t let it start.”
Munger has also learned to control certain toxic emotions that would corrode his enjoyment of life.
“Crazy anger. Crazy resentment. Avoid all that stuff. I don’t let it run. I don’t let it start.”
17. Pick unfair fights
“You have to play in a game where you’ve got some unusual talents.
If you’re five foot one, you don’t want to play basketball against some guy who’s eight foot three. It’s just too hard.
So you’ve got to figure out a game where you have an advantage"
“You have to play in a game where you’ve got some unusual talents.
If you’re five foot one, you don’t want to play basketball against some guy who’s eight foot three. It’s just too hard.
So you’ve got to figure out a game where you have an advantage"
18. Wealth buys independence
“You build capital and then you can do whatever you want.”
For many of the successful investors, that freedom to construct a life that aligns with their passions and peculiarities may be the single greatest luxury that money can buy.
“You build capital and then you can do whatever you want.”
For many of the successful investors, that freedom to construct a life that aligns with their passions and peculiarities may be the single greatest luxury that money can buy.
19. Specialize
They focus almost exclusively on what they’re best at.
Their success derives from this fierce insistence on concentrating deeply in a relatively narrow area while disregarding countless distractions that could interfere with their pursuit of excellence.
They focus almost exclusively on what they’re best at.
Their success derives from this fierce insistence on concentrating deeply in a relatively narrow area while disregarding countless distractions that could interfere with their pursuit of excellence.
20. Compounding works in all areas of life
Resounding victories tend to be the result of small, incremental improvements sustained over long stretches.
“If you want the secret to great success, it’s just to make each day a little bit better than the day before” says Gayner.
Resounding victories tend to be the result of small, incremental improvements sustained over long stretches.
“If you want the secret to great success, it’s just to make each day a little bit better than the day before” says Gayner.
Those are my 20 favourite quotes and lessons from the book.
But they're the tip of the iceberg.
Go buy and read the actual book.
William Green deserves full credit for everything I wrote above.
All text and quotes mentioned belong to him and the investors he interviewed.
But they're the tip of the iceberg.
Go buy and read the actual book.
William Green deserves full credit for everything I wrote above.
All text and quotes mentioned belong to him and the investors he interviewed.
Recap of the 20 lessons:
1. Bet big but infrequently
2. Read a lot + patience
3. Optimize for peace of mind
4. Wealth buys control over your schedule
5. Struggle gives our lives meaning
6. Narrow down key variables
7. Find good management teams
1. Bet big but infrequently
2. Read a lot + patience
3. Optimize for peace of mind
4. Wealth buys control over your schedule
5. Struggle gives our lives meaning
6. Narrow down key variables
7. Find good management teams
8. Risk is not knowing what you own
9. Know how much $$ is enough
10. Think long term
11. Environment influences your behaviuor
12. Buy for keeps. Think like an owner
13. Develop pattern recognition
14. Fall in love with boredom
9. Know how much $$ is enough
10. Think long term
11. Environment influences your behaviuor
12. Buy for keeps. Think like an owner
13. Develop pattern recognition
14. Fall in love with boredom
15. Look beyond the numbers
16. Exercise restraint in emotions
17. Pick unfair fights
18. Wealth buys independence
19. Specialize
20. Compounding works in all areas of life
16. Exercise restraint in emotions
17. Pick unfair fights
18. Wealth buys independence
19. Specialize
20. Compounding works in all areas of life
If you enjoyed this summary, then follow me at @heymaxkoh
I tweet about my journey of how I attained financial freedom before age 30, by investing in great businesses.
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I tweet about my journey of how I attained financial freedom before age 30, by investing in great businesses.
Go back to the top to Retweet this if you'd like to find it easily in future:
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