Why Greatness?

From Alexander the Conqueror, to Muhammad Ali, Michael Jordan, to Warren Buffett, all these legendary stars had one thing in common, greatness. They had certain characteristics that distinguished them head and shoulders above the rest.

Everyone works hard, so why aren’t we able to achieve greatness in what we do? Firstly, you’re probably not doing the work you love. Michael Jordan and Kobe Bryant didn’t become greats because they loved money, they succeeded because they were in a line of work they loved. They weren’t forced to practice everyday, they not only wanted to- they needed to. We often attribute success to the wrong things.

The way to achieving greatness begins in your line of work, particularly the work you love. I’m not talking about a casual interest, it needs to be something you go out of your way to do, and excel in. As Steve Jobs puts it If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. You need to find what you love to do, period.

But why strive for greatness? Why not just do good enough work and call it a day? If you’re satisfied with the latter then save yourself some time and read no further.

How To Start Your Journey Towards Greatness?

Jim Collins, author of the best-seller, Good to Great provides an exceptional answer to the whys and hows of greatness. To start on the hows of greatness, we go to an outstanding concept:”Level 5 Leadership”. To achieve greatness, you must become a Level 5 leader. To achieve this level, you must start with yourself. The characteristics of a great leader are honesty and modesty. In success, they always give credit, never take. When things go poorly, they look in the mirror, not around. Being this leader means that you are crazed about results and performance, you want the very best, no less and you will do absolutely any amount of work to reach it. You can start with improving yourself and climbing the ladder of leadership levels.

The End Game of Greatness

Why does achieving greatness matter? When it’s all said and done, it’s impossible to live a great life if you haven’t found meaning in it. It’s equally difficult to live a meaningful life without meaningful work, for your work will take up much of your time.

“The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” -Steve Jobs

Perhaps in doing great work, you’ll gain that rare feeling of a job well completed, that feeling in creating something of value, something worth more than the sum of its parts. Or maybe even better, as Collin puts it:

“…you might even gain that deepest of all satisfactions: knowing that your short time here on this earth has been well spent, and that it mattered.”

-Jim Collins, Good to Great

Good to Great was exceptionally written. Collins shows that greatness is indeed attainable, and illustrates what distinguishes the best from the rest. Indeed he does outline the qualities of great leaders and provides guidelines for theses traits while analyzing a list of companies. My mentor recommended this book to me, and as he passed on his recommendation to me, I will pass it onto you. I hope you enjoy this read as much as I did, and that the knowledge you gain will better you in your business life and personal. You can start your journey towards greatness here.

Golden Life Lessons From Investing

What are some life lessons that we can learn from investing?

TIME IS MONEY, BUT MONEY IS ALSO TIME

They say time is money. The equation goes the other way to: Money = Time. Now, other things equal, the point of money is to have financial freedom, more financial freedom derived is really just more time.

Time is on the side of a continuously improving company. Time is also on the side of a person who’s consistently improving. Make every moment count.

DON’T PREDICT YOUR FUTURE, MAKE IT

 

A great company can’t predict the future, but it can make it. You might not be able to know what happens in a few years, but you can control what you do today, keep your long term goals in the crosshair and day by day, struggle by struggle, you’ll get there, sooner or later.

SEEK VALUE: DON’T BE TOO QUICK TO JUDGE OTHERS

Behind every stock is a company. Most people just look at the ticker price and judge whether or not it will go up or down. Instead, read the balance sheet, look for intrinsic value, margin of safety,learn about the company. Don’t be too quick to judge a stock based on just it’s price; don’t be too quick to judge people upon first sight.

Sometimes great companies will experience turmoil, unforeseen events can shake up even the greatest companies. Just like some individuals can be shaken by events, sometimes it just takes time to see the value in someone.

 In the early 1990s, aerospace company General Dynamics was in bad condition. To be precise, $600 million in debt, negative cash flow and on the verge of bankruptcy. To the surprise of many investors, it made the impossible turnaround and long story short, is one of the leading aerospace companies today.

Sometimes people are in these rough times in life, perhaps they went on a bad breakup, lost their job or are just having a bad week at work, they may seem mad or irritated at first glance, but there can always be more to the story. We’ve all experienced bad times and made mistakes and through those mistakes we learned something or two.

SURROUND YOURSELF WITH WINNERS

 

Ideally, in our investment portfolio, we want to hold winning positions (great companies); ride your winners and let go of your losers. In life, surround yourself with people whom you value and admire, they will better your self-development. Toxic individuals may weigh you down and slow personal growth; thats the last thing we want.   

SORRY ISN’T ENOUGH

 

The greatest investors have made billion dollar investment mistakes; but they adjusted and learned from it. Sometimes you’re greatest stock picks will turn out to be a mistake. Don’t just be sorry. Learn from it. In life, when you make a mistake, be quick to admit it, learn from it and work on ways to improve from it. The importance here is the actions taken to correct the mistake and to prevent it from happening again.

“There’s no shame in losing money on a stock. Everyone does it. What is shameful is to hold onto a stock, or even worse, to buy more when the fundamentals are deteriorating”.

– Peter Lynch 

 EMOTIONS ARE JUST AS IMPORTANT AS INTELLIGENCE

 

Regarding long-term investing, Peter Lynch says: “Everyone has brainpower. But not everyone has the stomach for it”. The stock market is a wild animal, and Mr. Market is often moody, euphoric and irrational. Some days he’s very optimistic, others, he’s incredibly pessimistic. Intelligence may help you detect a great stock, but emotional intelligence and disciplined temperament will give you the gut to ride the rollercoaster that is the stock market.

Intelligence will no doubt allow you to strive in learning, applying and information processing, but emotional discipline will allow you to keep your head in when everyone else is losing theirs. It can help you control your anger and save you from irrational actions. Pair these two together, you have a winning combination, in investing and in life.

Quick summary:

All in all, time is the greatest asset of a great person, a great company, but for a human life, time is limited. Making money will allow you to have financial freedom, but the goal of financial freedom is ultimately to have more time. Time to spend with your loved ones, your friends, to travel and explore the essential part of life that isn’t investing. Of course, do continue to pursue your financial goals and knowledge, but don’t forget the endgame.

As always, JMO (just my opinion). Cheers.

8 Life Lessons From Warren Buffett

Photo from Freebeacon
Warren Buffett, CEO of Berkshire Hathaway, billionaire, conglomerate king, philanthropist, and the greatest investor of all time. There are numerous lessons you can learn from “The Oracle”. Luckily, he believes that success and great investing doesn’t require too much intelligence (so we’re both in luck). Here are some quotes and lessons we can learn and incorporate:

1. Be King, not the Jack-of-all trades

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In various interviews, the legendary investor states:
“You only have to do a very few things right in your life, so long as you don’t do too many things wrong.”
You don’t have to be the best at everything, just one or a few is good enough. Concentrate on your “circle of competence” and know your limitations (be honest and acknowledge what you do not know). In times, concentration is better than diversification.
“Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
– Warren Buffet

2. Make time your friend

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Patience (young grasshopper…?). In some cases, it just takes time for good things to unfold. This can be reflected in his Buffett’s long term stock positions; the results in the long-run takes time to come (or else it would be called the short run).
Here’s the magic of patience coupled with a great stock: If you had invested $1000 in Berkshire Hathaway (BRK-A, Buffett’s company) in 1964, and patiently waited 50 years until 2014, you would have $18,261,630 (a whoopin’ 1,826,130% gain).
“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
-Warren Buffett
Learning and growing takes time, remember; the expert was once a beginner.
 

3. Force yourself to form good habits

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“Chains of habits are too light to be felt, until they are too heavy to be broken.”
– Warren Buffett
Make it a routine to do small tasks that will contribute to your long term goals. Buffett spends much of his everyday time reading and over the years has built an invaluable habit that contributes to his learning. I suggest the book: The 7 Habits of Highly Effective People by Stephen R. Covey.

4. Learn to value

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One of the greatest skill that an investor can develop is the ability to estimate “true” value. Whether it’s a stock, an opportunity or even a relationship, being able to know the true worth of something is always in your benefit.
Buffett states that long ago, his mentor, Ben Graham taught him:
“Price is what you pay. Value is what you get.”
“Whether were talking about socks or stocks, I like buying quality merchandise when they’re marked down”
-Warren Buffett
(good quality at a discounted price; one of the principles of margin of safety)

5. Surround yourself with people who are better than you

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One of the best ways to improve your own skill set is to surround yourself with others whom are better than you, and whom you admire. Buffett went straight to work for his mentor, Benjamin Graham, without even knowing what he was gonna get paid. Warren says:
“People always ask me where they should go to work, and I always tell them to work for whom they admire most.”
Here’s an exercise:  Think/Pick out people you admire the most (try not to pick yourself) and think of the qualities that make up that person. Now pick out someone you cannot stand and notice the qualities that turn you off.
“The qualities of the one you admire are traits that you, with a little practice, can make your own, and that, if practiced, will become habit-forming.”
– Warren Buffett
It is equally important to pick out great figures and heroes to look up to, for they will provide you with quality guidelines and inspiration for continual self-improvements.

6. Honesty and Integrity are essentials

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“Honesty is a very expensive gift, don’t expect it from cheap people.”
-Warren Buffett
It is great to associate yourself with intelligent and hardworking individuals, as it may bring out the best of you, but if they lack honesty and integrity; you may not know when that knife goes in your back.
“…when you hire someone you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire someone without (integrity), you really want them to be dumb and lazy.”
– Warren Buffett
It is important to associate yourself with the right people, notably honest ones; so choose your close ones carefully!

7. Always remind yourself of your long term goals

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In everything you do, try to see how it will affect your long term goals. Buffett invests in quality stocks at discounted prices for the long term:
“Our favorite holding period is forever.” -Warren Buffett
You do not have to make your long term vision forever, but always plan for it; making sure you’re taking the right steps to reach it.

8. Investing in yourself is invaluable

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“The most important investment you can make is in yourself.”
– Warren Buffett
 At a young age, Buffett discovered investing and spent much of his time reading books about investing at the library. Knowledge is one of the best investments you can make for yourself. But it’s not the only one, your health is crucial to the equation (arguably even more important), The Oracle says:
 “Imagine that you had a car and that was the only car you’d have for your entire lifetime. Of course, you’d care for it well, changing the oil more frequently than necessary, driving carefully, etc. Now, consider that you only have one mind and one body. Prepare them for life, care for them. You can enhance your mind over time. A person’s main asset is themselves, so preserve and enhance yourself.”
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Photo by Michael Prince for Forbes
“Rule No.1: Never lose money.
Rule No. 2: Never forget rule number 1.” 
-Warren Buffett
I would strongly recommend reading “The Intelligent Investor” by Benjamin Graham; it covers the important lessons of value investing, intellectual framework in investing, margin of safety and much more! But don’t take my word for it, Buffett recommends it, as he says that stumbling upon that book was one of his luckiest moments in life.