Happy Thanksgiving！🦃
I was reflecting on a fascinating insight from Warren Buffett where he answers the one question everyone wonders: If his methods are so public, why isn’t everyone doing it?
His answer is a masterclass in behavioral finance and reveals the deep, simple truth of investing.
It’s not about a secret formula. It’s about temperament.
Here are the key takeaways from his explanation:
1. Knowledge Isn’t the Bottleneck
Buffett often mentions his mentor, Benjamin Graham, teaching at Columbia. Everyone in the class learned the principles and could have gotten rich.
And yet… “90% of the people that took his class ended up doing something else.”
Think about that. They had the golden ticket, the complete blueprint from the father of value investing himself, and they still didn’t follow through. Why?
2. We’re Addicted to “Fast”
Buffett nails the human element: “People want to make money fast, but it doesn’t happen that way.“
Graham’s philosophy of “waiting for the fat pitches” isn’t exciting. It doesn’t promise a 100x return by next Tuesday. As Buffett says, “It doesn’t promise enough for many people.”
Most people would rather guess if a stock will go up tomorrow than do the “boring” work of analyzing a business and waiting, potentially for years, for the market to prove them right.
3. The “Tortoise vs. Hare” is Real
Buffett gives the perfect example: “Most investors in internet companies didn’t know the market cap. They were buying because they thought the stock would move.”
He points out that if you asked them to write one sentence justifying the valuation (e.g., “I would buy XYZ company for $6 billion because…”), they couldn’t. They were just chasing the hare.
Value investing is the tortoise. It’s methodical. It’s grounded in your “circle of competence.” It’s “bound to work over time.” The problem is, most people don’t have the patience to let it work.
4. The “Philosophy Either Takes or It Doesn’t”
This is the most powerful line. Buffett himself tried everything, including technical analysis, but when he read Graham’s “The Intelligent Investor” at 19, he said, “it changed my world.”
It clicked.
For some people, the logic of buying a dollar for 50 cents is an immediate, irreversible revelation. For others, it’s just a boring, old-fashioned theory that can’t possibly compete with the thrill of the chase.
My Final Take
The investing world is obsessed with finding the next “secret.” The reality, as Buffett lays bare, is that the principles for success have been publicly available for nearly a century.
The secret isn’t in the knowing. It’s in the doing.
The real barriers to long-term wealth aren’t information or intelligence. The barriers are:
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Patience: Can you sit on your hands while others are seemingly getting rich quick?
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Discipline: Can you stick to your criteria and wait for the “fat pitch,” even if it takes months?
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Humility: Can you admit what you don’t know and stay within your circle of competence?
As Buffett concludes, “Charlie and I have educated competitors. Most don’t compete with us, though. It’s fine, we have more than enough money.”
The blueprint is free. The hard part is mastering yourself.
What do you think? Is temperament the single biggest factor separating successful investors from the rest? Let me know your thoughts in the comments.