“It’s kind of fun to sit there and outthink people who are way smarter than you are because you’ve trained yourself to be more objective and more multidisciplinary. Furthermore, there is a lot of money in it, as I can testify from my own personal experience.” -Charlie Munger
The above quote is one I think about often. And as I do, I am reminded of a goal of becoming both a great investor as well as a multidisciplinary thinker. If one is in the investment business, there are a few things that I think are key in order to achieve this:
- A long-term time horizon when looking at and investing in businesses (~5-10 years, with the potential to hold for longer if business advantages and reinvestment opportunities remain intact), so that one doesn't need to find new ideas on a constant basis. This allows one to take advantage of internal business (and tax-advantaged) compounding, and also allows one the time to read more widely.
- Good filters (to avoid wasting time on things that one should not have pursued in the first place).
- No sunk costs (via the example of Daniel Kahneman).
- A long-term, patient capital base (or permanent capital if possible).
- A fairly open and clear calendar (to allow one time to think).