Learning from Warren Buffett

My favourite Warren Buffett quote

The difference between successful people and really successful people is that really successful people say no to almost everything.

Learn a lot, every day; apply a little, every day

I was going to write about Warren Buffett’s 25/5 rule. The story goes: “Warren Buffett’s personal pilot asked him for some career advice. Buffett asked him to write down 25 career goals. Then list the top 5 goals. His advice was to work on the top 5 goals and don’t do anything with the other 20 goals until he has attained the first five.”

Now, this is a myth! Warren Buffett denied ever coming up with this rule at a 2013 Berkshire Hathaway shareholders meeting, “It really isn’t the case. It sounds like a very good method of operating but it’s much more disciplined than I actually am.”

Instead, Buffett offers this formula, “Go to bed a little smarter every day.” He spends 80% of his day reading 500 pages a day! Now, I have evaluated the strengths of many project professionals. Many strong project managers have learning as one of their top strengths. Buffet has taken this strength and exercised it so much that he could be one of the best learners in the world.

Here’s my little spin on this. In my humble opinion, most of this learning is about what *not* to do i.e. what risks to avoid, what not to invest in. Why? Because it’s hard to apply 500 pages of learning a day. Buffett stores up all he has learnt, then when appropriate, he applies the best learning in a specific situation. Unapplied learning is like dormant power. Appropriate, timely, applied learning is like a powerful volcanic explosion.

So, here’s my take on Buffett’s advice, “Learn a lot, every day; apply a little, every day.”

Agile versus Traditional Approaches to Investing

The so-called Warren Buffet 25/5 rule sounds very much like the traditional approach to project management. It’s great that Buffett debunked it.

Instead, his practice of reading 500 pages a day and advice to “go to bed a little smarter every day,” sounds like an agile approach and enables him to make the most of opportunities that present themselves. My hunch is that Buffet pivots to the best investment opportunity that he has learnt enough about when that opportunity emerges.

Instead of planning for a long term horizon that never ends, I won’t be surprised if Warren Buffet takes an iterative approach and reevaluates on a regular basis. He then invests to get the best returns for the next sprint.