While Alice Schroeder’s biography of Warren Buffett is top of mind, this quotation (page 263) hits pretty hard.
When Bill Gates and Warren Buffett give the same answer to a question, it’s worth our attention.
Then at dinner, Bill Gates Sr. posed the question to the table: What factor did people feel was the most important in getting to where they’d gotten in life. And I said ‘Focus’. And Bill said the same thing.
It is unclear how many people at the table understood ‘focus’ as Buffett lived that word. This kind of innate focus couldn’t be emulated. It meant the intensity that is the price of excellence. It meant the discipline and passionate perfectionism that made Thomas Edison the quintessential American inventor, Walt Disney the king of family entertainment, and James Brown the Godfather of Soul. It meant the depth of commitment and mental independence that led Jeannette Rankin as the only representative in Congress to vote against US entry into both World Wars in the face of widespread ridicule. It meant single minded obsession with an ideal. ‘Focus’ meant the type of person who could earn billions by allocating capital, yet be baffled by a sign that said ‘no TP’.
I know I have too many things going on at any one time, and end up doing a half-arsed job at most of them. Focus, as described by Schroeder, means:
- Unable to be emulated (ie, there’s no substitute)
- Mental independence
- Obsession with an ideal
Well. That’s a good list, isn’t it? Weird thing is, you find these elements repeating over and over in any podcast, book or blog post on the topic. Maybe there’s something in it?
I’m re-reading Alice Schroeder’s Buffett biography, ‘The Snowball: Warren Buffett and the Business of Life‘. It’s a great read, and timely for me as I grapple with the highs and lows of currency trading.
I came across this little gem on page 147, describing some lessons from Buffett’s mentor Benjamin Graham:
From Graham’s class, Warren took away three main principles that required nothing more than the stern discipline of mental independence:
- A stock is the right to own a little piece of a business. A stock is worth a certain fraction of what you would be willing to pay for the whole business.
- Use a margin of safety. Investing is built on estimates and uncertainty. A wide margin of safety ensures that the effects of good decisions are not wiped out by errors. The way to advance, above all, is not by retreating.
- Mr Market is your servant, not your master. Graham postulated a moody character called Mr Market, who offers to buy and sell stock every day, often at prices that don’t make sense. Mr Market’s moods should not influence your view of price. However, from time to time he does offer the chance to buy low and sell high.
Of these points, the margin of safety was most important.
Graham built in his margin of safety in various ways. As well as buying things for considerably less than he thought they were worth, he never forgot the danger of using debt. He looked at businesses as worth more dead than alive, thinking of a stock’s value mostly in terms of what the company would be worth if dead, i.e. shut down and liquidated. And he rarely bought more than a tiny position in any company’s stock, no matter how sound the business.
And yet Warren worshipped his teacher, even though he had strayed so far from one of Graham’s ideas.
The importance of safety has been slammed into my brain time after time by my forex mentor (although, we call them stop losses). And Mr Market is real – he’s capricious and unpredictable.
Thanks for reading.
Isn’t this a great infographic? I found this while tooling around Google+, and you can read the full original post here. The takeaway for me? There are lots of things on this little blog I’m doing wrong. At least I’m having fun.
In my defense, this is a wordpress.com hosted website. For free. And some of the recommendations in this infographic simply can’t be implemented unless I upgrade to a paid plan. Which I’ll get around to doing, with my still-unused 350words.com domain.
The original image came from salesforce.com (SFDC). In my prior job we used SFDC for all our customer relationship management needs and although it’s a monster of an application, it’s well documented and their training (where this image originally came from) is first class.
Thanks for reading.
I have an app installed on my Mac that helps me cheat a little when I get to cutting my draft posts down to their core.
It’s called the Hemingway Editor, and you can get it here (not an affiliate link).
The screenshot shows a draft of my last post, and maybe gives you an idea of what information it provides. I can write directly in the app itself, but I prefer to do my first drafts on paper. Then I go electronic. I refine in Scrivener and then check for problems with Hemingway.
Too be honest, it highlights only the simple and common problems we all make when we get too close to the text. For example, it highlights:
- Words or phrases that are too complex
- Sentences that are too long, or could be split into two (or more)
- Superfluous adverbs
- Passive voice constructs
At the moment, Hemingway won’t solve these problems for you. Maybe this is a good thing. If you strip too much out you can also lose the unique voice of your writing. Sparse words have their place, but not everywhere.
I use it, and I like it. I read there’s a PC version as well, and an online version.
There are alternatives. Grammarly is one and I have a free account. Definitely worth checking out, if these sorts of apps are valuable to you.
Thanks for reading.
I’ve spent this morning thinking about the vision, mission and purpose of my most important web properties (350 words is one). I have often struggled to win Board acceptance of my drafts for these three key statements – they weren’t like others they had read, I guess, and they wanted them done differently. Now that I report to a different boss (me), I can define these as I like.
I think most executives struggle with this aspect of management. This article covers my ideas as to what these three crucial statements – vision, mission and purpose – should contain. But before I begin, I want to talk briefly about clarity.
Every business owner, and every C-level executive, must live and breathe these three statements. And they must be seen to do so by all the stakeholders in their business.
These statements must be crystal clear in their expression so there is no doubt what the business stands for. The best test? That the staff can confidently make decisions consistent with their employer’s vision, mission and purpose – even when their manager is not there.
The ‘what’ – your vision statement
Close your eyes and imagine what you want the business to be in five years’ time. Then write it down as if it was already fact. Wordsmith it so it’s short and sharp, and that’s your vision statement. And it’s okay to be ‘you’ focused.
The ‘why’ – your mission statement
Why is that vision worth striving for? What is it that drives your business forward? Write it down, wordsmith it for clarity, and your mission statement’s done.
The ‘how’ – your purpose statement
Write how you will realise your vision. This is not an operations plan so no need for expansive detail, but set the bounds and direction so your entire organisation understands what’s acceptable.
An example: 350 words
- Vision: A published author, generating income from my writing.
- Mission: Improve the quality of contemporary online content, starting with myself.
- Purpose: Through this website and social network participation, contribute to existing writers’ networks and inform aspiring writers.
Thanks for reading.