The Best Work Harder Than Everyone Else
I was just going through my twitter feed and reading a few blog posts that caught my eye while watching the Dallas Cowboys come back to beat the Steelers in overtime in a crucial matchup of 7-6 teams. I came across this post from one of my favorite bloggers Goeff Gannon and in the post, he discusses a very underrated and rarely talked about character trait of Buffett, Graham and some of the greatest investors in history. The secret is this: they flat out worked harder than just about everyone else. They were obsessed with their field of study.
Buffett memorized every case study in Ben Graham's 800 page book Security Analysis. He could quote from the book and name the page the passage was from. As Gannon mentions in his post, he read every book on investing from the Omaha library before his teenage years and he visited Geico headquarters while still in school. He went through the entire Moody's manual more than once and looked at every single listed stock.
Plain and simply: he did things other didn't, and that is a large reason for his success.
Ben Graham was known for having many interests in areas outside of finance, but I think he developed these interests as he became older. He was always interested in the arts, but early in his career, he was a learning machine and he likely worked harder than the vast majority of his fellow young bond analysts on Wall Street in the 1920's.
I found like this quote from Graham:
"I took my job of self-education very seriously. I got myself a small looseleaf notebook, and on each page I wrote the salient data about a given bond issue in convenient form to be memorized. After all these years, I can still remember the appearance of that black notebook and some of the entries in it. The first was 'Atchison, Topeka, & Santa Fe, General 4s, due 1995: 150 mil.' There must have been a hundred different issues entered; I memorized their size, interest, maturity date, and order of lien. Why I wanted to memorize facts that could be readily obtained from manuals or my notebook I am at a loss to explain... I had become something of a walking Railroad Bond Manual."
Talent is important, but hard work can overcome most of any deficiencies that one has from lack of talent. As the greatest musical composer of all time (Johann Sebastian Bach) once said
"Just practice diligently and you will do very well."
This might be just a causality bias, most hard workers in investing are not necessarily rich because they spend a lot of time, but their performance is tied to root obsessive behavior in regards to what enough means.
I've pondered myself what if there were potentially a lot of buffets in terms of returns but most of them are good for life with a couple of billions, like how Lynch called it a day. Nowadays we have the analytical tools like everyone else, patience is the only strong edge left it seems, and qualitative data with long shelf life.