If you run your company well, build a good management team, hit your milestone marks, make some discoveries, and make some profits, investors and financial consumers will come knocking at your door to throw their money at you. After all, they want to be part of the winning team and could care less if you care about them…right?
“Be fearful when others are greedy, and be greedy when others are fearful.”
Yes, I know, you have heard that phrase a million times over. And yes, I know, it is a phrase coined by one of the most successful – no – THEE most successful investor of all time: Mr. Warren Buffett
As a kid growing up that phrase has always echoed in my head. So has the Oracle of Omaha. There is no doubt that he is the best and why so many investors think of him when they think of successful investors.
So why are we not all rich and successful like him? You would assume that if we think of him as “the best of the best”, we should all follow his advice. We should all invest in what he invests in. But we haven’t.
Why? Because we’re not like him.
He is old. He is traditional. He is the past.
We are the new age investors. We are the investors who are shaping and changing our future. We are the investors who promote change and aggressive progress in order to become the best. We want to improve our technologies and explore the unexplored. We are the next generation.
Mr. Warren Buffett, you are old.
We are much more complex than you.
But that is our problem.
In our quest to move forward, we have forgotten the single most important rule that can be applied to practically every situation: KISS (Keep It Simple Stupid)
Throughout Mr. Buffett’s career, he has always had a very few simple rules of investing that has taken him to where he is today, one of the richest men in the world. I encourage everyone to read his works (such as “The Essays of Warren Buffett : Lessons for Corporate America” and “The Intelligent Investor”) and you will see (and agree) with me that his mantra all equates to simplicity.
There are arguments that he could have invested in some of the tech companies during the boom and potentially made millions more than he already has. But guess what? He is still on top.
It’s scary to see how accurately Mr. Buffett has predicted the outcome of our historical financial events. Back in 1999, when the tech boom was booming, he wrote yet another rare article, which you should all read here:
In that article, he says:
“Let’s start by defining “investing.” The definition is simple but often forgotten: Investing is laying out money now to get more money back in the future–more money in real terms, after taking inflation into account.
He also makes a comment that strikes a profound note by saying, “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.”
He was referring to the airline boom.
And boy was he right.
Applying that to the dot.com explosion, which I discussed here (http://equedia.com/blog/view.php/Financial-Crisis-Not-So-Bad), and Mr. Buffett was right – again. How many companies of the tech boom came out alive? Yes, there are your Googles, Amazons and Ebays but much more failed than those who succeeded.
Simplicity wins again.
I think it’s about time to listen.
Below, I have pasted Mr. Buffett’s recent article (October 16, 2008), “Buy American. I Am.”
(Please note that the article “Buy American. I Am.” was published in the New York Times and in no way is work of my own. You can find the article link here: http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=1&partner=rssuserland&emc=rss&pagewanted=all&oref=slogin