Warren Buffet says to be LAZY!? - Feb 2024 (#6)

Hey dear reader! Happy Valentines to the couples, Galentines for the single ladies, and another night of ramen and gamering for the single fellas... Your dude Brent has some paradoxical wisdom for you today. Hold on tightly, lets go lightly…

Motivation

Money

The great Oracle of Omaha, Warren Buffett shared something once YEARS ago that’s stuck with me. The value of INACTION. He likened investing to a game of baseball, except that you only get a strike when you SWING and miss. In his version of baseball you get pitches all the time and it’s all about knowing when to swing. He even says you should only be swinging at a COUPLE DOZEN pitches in your lifetime!

Why would he say this? Sounds like a lot of laziness and inaction right? And we all know that inaction is bad right? WRONG. In investing its all about taking the RIGHT action. Getting yourself up to bat, to be able to swing at the right pitch.

This is, of course, the exact opposite of what conventional wisdom says. In Real Estate the guy who gets the glory is the one who does the most deals. Even if many of those deals aren’t actually any good. All the tv commercials for stock brokerage accounts glorify the ‘active traders.’ People who do a lot of trades and make big money. Only problem? Most ‘active traders’ actually lose money. In fact, around 90% of professional managers fail to outperform a regular old index fund at beating the market!

There’s also a great deal of logic to swinging at fewer pitches. For starters, if you’re picky about what you’re investing in you’re more likely to hold the investment longer term. Anything you hold longer than a year you pay capital gains taxes on (15-20%) compared to anything less than that, you pay regular income taxes, which is typically much higher. Second, if you are more selective about your swings… you’ll sleep better. Being less worried about what you’ve invested in keeps you in the game longer. And finally, if you swing at fewer pitches you’ll bring up your investing batting average. If you save your swings for the incredible pitches you’ll eventually get those outsized returns every investor hopes for.

That’s not to say it will be easy. One of the hardest things a motivated person can do is nothing. You have to contend with the little voice in your head that says ‘You suuuuuck…. your laaaazy…’ Don’t listen to it.

Warren Buffett has been criticized for years for not being more active. His investors get frustrated with him for hoarding enormous amounts of cash and not doing more deals. Warren sticks to his principles and just keeps on waiting in spite of what others say. Warren has the grit to stick to his principles. Do you?

FINAL MEMES

Aaand its over! Hasta la proxima!

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