Tuesday, September 02, 2008

Who Do You Want To Be?

Warren Buffett often tells his audience to perform a simple exercise which runs like this: Imagine if you had to invest all your money today in a person, a friend. It would work similar to any investment, in that you would be getting a stake of his future income. Who would that person be? And more importantly, which of their qualities make you willing to put such faith in them? The point of the exercise is to get you thinking about qualities you admire, respect, and believe will lead to success.

I've run through this exercise countless times. I've found that the people I admire usually are:
Long term outlook

And no exercise would be complete without inverting the question.Which qualities do I dislike in others? That list of opposites would be something like:

Entity Mentality

Once I had this list, it became simply a matter of acting like the first list and avoiding the second. And although perfection is near unattainable, it helps immensely if you know what you are aiming for. Should you not uphold the qualities which you admire in others?

As you ask other people to perform this exercise, I think you will find the list of positives overlaps for many people; and you'd be hard-pressed to give approbation for any of the second list of qualities. The lesson has some bearing for the investors out there as well. It is difficult to find a truly great investment when you are entrusting your money in a crooked culture. So I recommend all of you to make your lists, study it closely, and start finding people and organizations which match your admirable ideals.


Anonymous said...

It's interesting that you listed cold/unsympathetic as a negative also counted emotional as a negative and rational as a positive. It's tough to resolve those often conflicting traits.

Have you read Roger Lowenstein's bio of Buffett? Lowenstein highlighted Buffett's debatable parenting choices and also his behavior while working with the Buffalo Express.

When the paper was under siege by a local competitor, as well as by anti trust issues, the paper's employees worked double time to increase the quality, and the circulation, of the paper. BUT, when the Express finally drove out their competitor, Buffett dashed his employees' hopes of increased profit participation. In other words, despite his testimony in the anti trust courts, Buffett knew the natural monopoly of the local paper business model trumped any differentiation in the news staff.

Rational, yes, but not at all sympathetic.

Nnejad said...

I can see the possibility for misunderstanding, so let me try to explain. By rational, I meant that their decisions are based on calculated thought from the facts in front of them. Whereas, an emotional person will simply react in a knee-jerk fashion to what his instincts tell him he should do right now.

Now, I don't think that conflicts with being sympathetic or cold. A personal can be rational in a decision with the intent of helping other people. Or, he can think of rational ways to serve his self-interests, or to even to hurt other people. I'd find that an objectionable way to think over problems.

Now was Buffett acting unsympathetically in this case? I don't know the exact situation, so I can not comment. All I can say is that in the end, Buffett was a major blessing to this world, and he will leave the world a much better place for future generations.