When Bill Gates met Warren Buffett for the first time, Gates' mother asked them to share the most important factors for their success. Both Gates and Buffett gave the same answer: "Focus."
Warren Buffett follows the 5-hour rule, and when he spends 80% of his time reading and thinking, many people’s reactions are predictable: "He can do this because he is Warren Buffett. One of the richest people. I will never reach that point, nor can I do that."
Because the fact is: Buffett has spent most of his time reading and thinking since elementary school. Owning more money or managing a large company does not give you more free time. Free time, never appeared silently. Unless they retire, people will not have a lot of free time. On the contrary, free time is the result of a strategy, the result of looking at time in a different way. Regarding his book and most of the annual letters he wrote to shareholders, it is clear that the reason why Buffett can easily make such a schedule is because he used the most ruthless prioritization method in the world, which of course is a good way.
Here are six strategies Warren Buffett has adopted during his career in order to have more time to read and think. I invite you to "copy" them so that you have more time each day to do the things that are most important to you. When you read these strategies, one thing to note is that these strategies are not like the typical combination strategies you see on the Internet, they are not random. Most people have overlooked a deeper model-his primary mental model.
Buffett strategy 1: Kill busy work
Buffett has crossed out almost all tasks that the CEO must complete from its schedule:
He never talks to analysts (Buffett estimates that a typical CEO spends 20% of his time talking with Wall Street analysts).
He rarely accepts media interviews.
He does not participate in industry events.
He has lived in Omaha, Nebraska, a place outside of New York City for almost his entire career.
He hardly attends any internal meetings like a typical CEO.
The important thing is that these decisions did not happen by accident.
There are several basic facts about Buffett’s strategy: 20% of priority tasks will account for 80% of our results. Buffett’s top five goals are 20% of the 25 goals.
The real threat to our time is not simply the interference of things that we know are wrong. On the contrary, the real threat is those "wolves in sheep's clothing"-these activities make us feel like we are working hard, but in the end they cannot change the status quo. Buffett's "three-step" method is to prevent this!
The real challenge of prioritization is to say, "No!" It is easy to promise. What is really difficult is to say no to busy work, because busy work can make you cross one item from the to-do list and feel satisfied: fulfill your obligations to others, do a simple thing, write an email .
Buffett Strategy 2: Only work with people you think you
can work with forever
"If you can't imagine that you can work with someone for a lifetime, then don't work with them for a day."-
Similar to Buffett's strict review of his work activities, he also conducts strict review of those who work with him.
Buffett only works with CEOs he trusts. These CEOs can achieve results, and he thinks he can work with them for decades.
Therefore, before acquiring a company, he rarely conducts negotiations and due diligence, and does not interfere too much with the CEO of the company he has acquired. In addition, he enjoyed the conversation with the CEOs.
(Note that the word "trust" has made Buffett give up buying many companies with attractive financial conditions, just because he doesn't trust the CEOs of these companies.)
Buffett Strategy 3: Keep things super simple
Buffett has eliminated almost all the bureaucracy in his company. Berkshire Hathaway’s portfolio company has nearly 400,000 employees, but its actual headquarters has only more than 20 employees. This is one of the largest companies in the world.
Buffett's personal life is also very simple. He lives in a humble house (he has lived there for 60 years), and his personal expenses are low.
In our careers, in our company, in our lives, it is very easy to make things complicated. In fact, this is the norm.
When you get more profits, it's normal to hire more employees. As you make more and more money, it is normal to spend more and more money. What is truly powerful and unique is to keep things simple. This requires effort and skill. This is also part of Buffett's strategy.
It is strange to say that when you compare the lifestyle he may live with and the lifestyle he chooses, one of the richest people in the world is also the biggest minimalist.
Buffett Strategy 4: Focus on a few high-quality bets
Warren Buffett only makes a small amount of investment each year.
I remember the first time I heard this news, I was shocked. ``How could the richest investor in human history only make so few transactions?''
The founding partner of the Housatonic Partners fund, William Thorndike (William Thorndike) gave us the answer to this question in his book "The Outsiders":
Buffett believes that a concentrated investment portfolio will bring extraordinary returns, and excellent investment targets rarely appear.
He has told students many times that if they get a card with only 20 holes at the beginning of their career, which represents the total amount they can invest in their investment career, their investment results will improve.
As he concluded in his 1993 annual report, "We believe that if the policy of making the investment portfolio more concentrated can increase the investor’s intensity of thinking about a company, it will also increase his satisfaction with its economic characteristics before buying the company. Then this policy is likely to reduce risks.”
In short, Buffett means: "The trick to investing is to be there, watch the ball one after another and wait for the ball to reach your best height. If people shout, "Swing, you fool!" , Just ignore them.
Buffett Strategy 5: Focus on long-term investment
Buffett will hold his stock for a long time.
According to William Thorndike in his book "The Business Outsider", he currently holds the top five stock options for an average of more than 20 years.
In contrast, the average holding period of a typical mutual fund is less than one year. This means that investment activity is at a very low level, which Buffett calls "almost lazy inactivity."
Buffett has also used a similar concept in knowledge investment, which has brought him long-term returns. In Buffett’s only authorized biography, his biographer commented on what she learned from Buffett:
What you learn and invest in should be knowledge that can be accumulated, so that knowledge can be built on the basis of knowledge. Therefore, instead of learning something that may be out of date tomorrow, such as a certain type of software (no one will even use it in two years), it is better to choose something that will make you smarter in 10 or 20 years. I have been benefiting from this lesson now.
Buffett strategy 6: Avoid catching up with the
technological trend
One might think that the greatest investor in history will always seek to master the latest technology in order to stay at the forefront of the times.
Interestingly, the opposite is true. Here are some examples:
There has never been a computer in his office.
He has never used a stock ticker.
He does not have a smartphone.
These unique choices reflect some of Buffett’s characteristics: Buffett is very clear about what data he needs to know in order to invest.
He has enough confidence in his own ideas, and he is unwilling to do things that are popular with the public.
He actively eliminates potential interference from the environment, rather than relying on willpower.
How to apply Buffett's core mental model?
Now, you understand. It is not accidental that Warren Buffett has reading and thinking time. His life was designed for this.
These are not random strategies... They all come from an important mental model: the 80/20 rule. In fact, 20% of our efforts will bring about 80% of the results in many areas of our lives.
In every area of his life, such as interpersonal relationships, investment, technology, and setting priorities, Buffett is a master who ruthlessly prioritizes a few important matters and abandons everything else.
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