Episode 166 - Observe The Masses...
The Thursday Thesis - 29/8/2019
Within the world of business, finance and investing, Warren Buffet is pretty much a legend in his own lifetime.
Now in his 80’s the Chairman of the Berkshire Hathaway investment fund is still playing The Game he loves most – the Game of Money.
You might ask “Why would he want to keep on working at his age?”
Because it is his game – his fascination and his calling.
He certainly isn’t in it for the money itself: with a personal net worth of around 80 Billion dollars it would be hard to make much of a dent in his fortune. In fact, that amount of money invested at just 3% would earn him an eye-popping 2.4 Billion dollars a year, pre tax.
He's a lone wolf - happy to pursue his own passions and interests when it flies in the face of popular opinion.
Buffet is, by nature, a contrarian - believing that he should try be brave when everyone else is fearful, and when everyone else is brave – he should be fearful.
Part of his philosophy is, in essence, Observe The Masses – Do the Contrary.
There’s a curious logic to the way he thinks: reasoning that there are fewer successful investors than unsuccessful investors, those in the minority have the best odds of success.
Observe the masses...
It works across all areas of life – even learning to play guitar – where the most common approach is to “teach yourself” what you don’t know how to do, and only a minority book themselves in with a teacher to accelerate their progress.
That’s why most wannabe guitarists quit or are frustrated and stuck.
Observe the masses...
Work surveys constantly report that around 70% of people hate their jobs, approximately 25% are indifferent and only around 5% of people actually get paid for doing work they really enjoy.
Observe the masses, do the contrary.
When everyone around you is moaning about the economy, Brexit, the state of the country, or how crap the local football team is doing this year, feel free to run the other way. Consciously choose to be positive instead – don’t get caught up in a game of one-downsmanship with people who are more negative than you are.
You know the game, don’t you?
It’s the one where – no matter how big their problem is, yours is so much worse.
When the usual crowd are milling around - moaning and bitching about the crap on TV last night, the price of a pint or that trollop from accounts and her new shoes – run. Just get yourself away from their tractor beams before you are sucked into their negative vortex and begin to compete for the “My Life is Crappier Than Yours” prize.
There’s a lot of competition for that award, but even if you won it, you’d still be a loser.
Given the choice between what most people do and what the minority do - day in, day out – do you want to run with the pack or howl with the lone wolves?
Be more wolf: Observe the masses, do the contrary.
© Neil Cowmeadow 2019
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