Buffett and Munger on How to be a Hack

Posted by

“I believe in the discipline of mastering the best that other people have figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.” – Charlie Munger

I have a confession to make — I’m a hack. That’s right. I’m consistently stealing ideas from people who are smarter than me and using them to my advantage.

I used to think that having my own unique opinions about everything single thing was the way to go. Why be a conformist? Slowly, but surely, I learned it’s a waste of time to constantly try to create your own ideas just for the sake of being different. It’s an uphill battle against people much smarter than you. Most of us will get much more out of destroying our own wrong ideas than coming up with new ones every day. Reinventing the wheel is overrated.

Luckily, I have some good company in this line of thinking. Even brilliant people look to use the best ideas from others to find their way. Here are Warren Buffett’s thoughts on standing on the shoulders of giants:

I‘ve mainly learned by reading myself. So I don’t think I have any original ideas. Certainly, I talk about reading [Benjamin] Graham. I’ve read Phil Fisher. So I’ve gotten a lot of ideas myself from reading. You can learn a lot from other people. In fact I think if you learn basically from other people, you don’t have to get too many new ideas on your own. You can just apply the best of what you see.

In The Warren Buffett Portfolio, my all-time favorite book about Buffett, Robert Hagstrom sheds some more light on how Buffett and Munger think about learning:

“It’s extraordinary how resistant some people are to learning anything,” Charlie once said. “What’s really astounding,” Buffett added, “is how resistant they are even when it’s in their self-interest to learn.” Then, in a more reflective tone, Buffett continued, “There is just an incredible resistance to thinking or changing. I quoted Bertrand Russell one time, saying, ‘Most men would rather die than think. Many have.’ And in a financial sense, that’s very true.”

I used to assume that being the first one to a piece of news was the key to sucess in the markets. But timely information is just not that important when market reactions and movements happen so quickly. I’ve never felt more informed because I was the first one to read a piece of breaking news. But I’ve always felt more informed when I’ve read a piece of advice that I can use over and over again to apply to different situations.

It’s not only important to learn from those around you, but also those who came before you. The most helpful learning I do usually comes from older material. The best advice is timeless because it focuses on understanding and perspective over action and tactics.

Of course, it doesn’t matter how much you read or how many good ideas you latch onto if you can’t put your own spin on them and apply them to your own situation. Ideas without application are useless.

Being able to pick and choose the best ideas from some of the greatest minds out there is something not enough people take advantage of.

Source:
The Warren Buffett Portfolio

Further Reading:
It is Always the Same Novel
We’re all Smart
My Favorite Warren Buffett Shareholder Letter

 

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. 10 Friday AM Reads | The Big Picture commented on Dec 19

    […] see Wait, North Korea DIDN’T do it? (Media Equalizer) • Buffett and Munger on How to be a Hack (Wealth of Common Sense) • Norris: What happens when you turn over regulatory responsibilities to people who think there […]

  2. John Thees commented on Dec 19

    Excellent advice and wisdom in this piece. A great deal of my knowledge about finance and investing has come from reading the works of other folks, many of whom know much more than I do. Of course, personal experience (mainly from mistakes I have made) has also provided some very important knowledge. Learning from the mistakes others have made can save one much grief over the long term. That’s why your articles are excellent and important to folks who are currently trying to accumulate wealth for retirement.

    • Ben commented on Dec 19

      Thanks John. I agree, not only taking the best from others but also the worst and learning from that. Let someone else pay the tuition to the market gods so you don’t have to. Well said.

  4. Robert Connor commented on Dec 20

    We like hacking, its just taking a idea and making it better. So much to learn so little time!

  5. John Merryman commented on Dec 21

    The irony here is that it argues both sides. Often the reason people don’t like new ideas is because they have been given some belief or model and assume it is the Word of God. The difference is between a groove and a rut. We want that smooth grove to take us where we think we need to go, but then don’t pay attention and it becomes a rut that we can’t afford to get out of, when we were not looking.
    Personally I’ve come up with three diverse ideas and when I mention them, people figuratively run away.
    One is that we look at time backwards, that it isn’t the point of the present moving from past to future, but change turning future into past. Which makes it an effect of action and more like temperature, than space. Time is to temperature, what frequency is to amplitude. suffice to say this is a lead balloon in physics discussions, yet their models have them off in multiworlds.
    The next is that the absolute is basis, not apex, so a spiritual absolute would be the essence of being from which we rise, not an ideal of knowledge and judgement from which we fell. I literally had a Catholic priest(and future in-law) cross himself and walk away, when I made that point.
    The third is that money is a contract, not a commodity. As a contract, it is the proverbial groove and as a commodity, it becomes the rut…. Just ask the Fed how it is going to stop QE.

    • Ben commented on Dec 21

      Well said. Looking at both (or many) sides of any argument or point of view is another part of the process. Having an open mind is a prerequisite to learning the right way.

  8. Links 12/21/14 | naked capitalism commented on Jul 14

    […] Buffett and Munger on How to be a Hack A Wealth of Common Sense. “Most of us will get much more out of destroying our own wrong ideas than coming up with new ones every day.” […]

More from my site