LEGEND TURNS 93

It only takes one person to break the stereotypes and come out of a trap. The unexpectedness of that person forces you to think and connect the dots that have been lying around for a long time. That one person can literally break or make you. It can be anyone. It can be an old friend with whom you lost touch, that teacher who said something that you never thought of, a random date that inspired you, or that random guy you met while traveling and never saw again. For me, that one person was none other than Mr. Warren Buffett. It's really hard for me to put into words how drastically this man has changed my life. It's not a typical rags to riches story, but it's nothing less than that. I always marvel at how someone sitting thousands of kilometers away can help someone drastically change their life without even knowing who the person is that he is helping. I guess we will never know. 

I have been a disciple of Mr. Buffet for the last 4 years and have collected his words of wisdoms. Irrespective of your field, you passion, likes-dislikes, these lessons will definitely help you navigate every road. Below are 7 most valuable lessons that I learnt from Mr. Buffett. Let's get it started. 

1. Talking about the road, Buffett has famously said that when given a choice between two paths, always travel the road less travelled. The main idea behind taking the path less travelled is to stop following others and to craft your own path. Take some time to find out the starting point of this path, and how to go about to this point. Think about what you want and not others are doing. I would like to share an anecdote, pointing out the benefits of taking the road less travelled. During the tech stocks boom of 2000s, Buffett knew that it was a frenzy bubble that was driving the markets up and hence, he refrained himself from taking any positions in the market. Forbes, one of the largest finance magazines had scripted out an article, questing Buffett's ability to find great businesses and mint money. Buffett, being aggressively patient human being, knew the frenzy and was waiting for the right moment for the markets to fall and when they did, it was a blood bath. At that time, he poured in $15 billion and bought companies like JP Morgan, Bank of America, Wells Fargo, etc. Look at their current valuations and you would know why he is a billionaire. 

2. Buffett, through his speeches and articles, has highlighted his habit of observation. He said that it was very rare for someone to teach him something in person. Most of the time, he would just observe that person doing something good, which would resonate with his principles and values, and he would start inculcating that habit into his daily routine. One such habit that Buffett learned was the power of association. He saw that his father always had people better than him around. When you have people better than you around, you can't help but get better as time goes on. The reverse is true as well. Always associate yourself with people who are better than you in every aspect of life. If you ever get the feeling of superiority, make sure to calm your ego or change the circle. The world population stands at over 8 billion.

3.  It's not just markets where he invests. Buffett has been a flagbearer of concept of investing in yourself. He say's and I quote, "When I was 16, I had only two things on my mind, girls and cars. I wasn't very good with girls, so I thought about cars. Let's say that when I was 16, a genie appeared and offered me to gift that dream car. You name it and it would be in front of your house. Obviously, you would question, what's the catch? The catch is that it would be the only car that you would own throughout your life. Just think how much care and attention you would give to that piece of metal. You won't let anybody drive that car, you might get it checked every month for oil and engine quality, and what not. You would do anything to maintain the longevity and health of that car. Then why do we ignore our brains? Just like that car, we have one mind and one body. If you don't take care of that mind or that body, they will be a wreck in 40 years, just like the car would be. It's what you do right now that would determine how your mind and that body will operate ten, twenty, third years down the line. 

4. After the Solomon Brothers crisis, Buffett's reputation was on the line. Buffett along with his investment vehicle, Berkshire Hathaway, had taken a controlling stake in the investment bank. A bond trader had violated some rule, and the upper management hadn't informed Buffett again. When it happened for the second time, Buffett wasn't informed. The bond trader again indulged himself into these irregularities but this time the losses followed, and it wasn't a secret anymore. The congress committee started cross questing Buffett, considering him a suspect. After a few months, the storm turned into cool breeze, and that's when Buffett said that it takes years and years of hard work to build a reputation and 5 minutes to destroy it. Don't associate yourself with people who can cause damage to your reputation. Buffett said and I quote, "I can afford to lose money - even a lot of money. But I can't afford to lose reputation - even a shred of reputation". 

5. It wouldn't do justice if I talked about Buffett and didn't share any financial lessons. Here it goes. Buffett has been hellbent on investing in good-quality companies. But he wasn't the same when he started. During his initial days, Buffett was high on investing in low-quality companies because that's where he found bargains. He was buying a stock worth $1 and selling it when it crossed $10 or $20. After he met Charlie, he learned the importance of buying and holding good-quality companies. Warren and Charlie bought See's Candy. At that time, the See family was demanding $30 million, and Warren was already chocking on $25 million. Warren wasn't willing to pay up because he thought $25 million was their fair value. Charlie went ahead and somehow convinced Warren to pay that extra $5 million. Over these years, See's Candy Company has been valued at $2 billion. A whopping 8000% return, to which Buffett said that it's better to buy great companies at fair prices than fair companies at great prices. Great businesses prevail as life tests them through the business cycle. 

6. Apart from all the analytical and research skills that are required to enter and succeed in the investment business, patience is supreme. Buffett knows this and hence once said, "The stock market is a device for transferring money from the impatient to the patient". More than just saying it, Buffett is a living testament to this. Buffett has been holding Bank of America since 2007. Coca-Cola, one of his biggest wealth creators, has been sitting in his portfolio since 1988. Geico, the world's biggest reinsurer, has been in his portfolio since 1976. Patience does pay off, provided that the companies that you have chosen are great businesses and you don't indulge in leverage or something else that would erode those capital gains.

7. Talking about Buffett without mentioning Charlie and Susan won't complete this story. Two of the most important individuals entered his life unexpectedly and created a 180-degree shift. Let's talk about Susan first. Susan Thomson, Warren's first wife Warren and Susan got married when they were 21 and 19, respectively. It's an open truth that Susan changed Warren, obviously in a good way. Their marriage was a testimony of trust and pure love, said Bill Gates. When asked in an interview to talk about Susan after her death, Warren said, "You want to associate with people who are the kind of person you would like to be. You'll move in that direction. And the most important person by far in that respect is your spouse. There have been two turning points in my life. One when I came out of the womb, and second, when I met Susie. What happened to me wouldn't have happened without her. Marry the right person because they can make or break you".

If Warren and Susie's relationship was the epitome of pure love and trust, then Charlie and Warren's relationship is the epitome of trust, respect, and loyalty. It's hard to believe that these two billionaires met in 1959. Obviously, they weren't billionaires then. Their relationship is something that can't be expressed in words. It can be observed by either watching their annual general meetings or by reading the millions of books that have been written about them. It's really emotional for me to write about them because the kind of impact they have had on my life is unexplainable. I would urge you all to watch at least one of the AGMs. You would know what I am talking about. 

 

 

As I pen down this article, i.e., August 30, 2023, it happens to be my idol's birthday. Rising age, rising bank balance, rising love and respect, and rising work ethic—that's Warren Buffett, ladies and gentlemen. May Charlie and Warren be the 9th and 10th immortals and bombard us with their love, knowledge, and experience. The best way to end this blog would be to quote Warren himself. His world view can be summarized in this quote, which is very relatable to me. It goes like," "For a man to lead a great and long life, he needs one good friend and one good wife".