50: Buffett: Change Is A Threat; Wisdom Of Billy Joel; Return On Invested Time
Don't go changing...
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Sing It, Billy…
Don't go changin'
To try and please me
You never let me down before, mmm
The opening lyrics to Billy Joel’s famous song Just The Way You Are would well describe Warren Buffett’s attitude to businesses.
The best businesses don’t change much, and that’s a good thing. Change means chances for mistakes. Change means new competition. As an investor, you care about getting back more money tomorrow compared to what you put in today.
Unfortunately, many people are attracted to new and exciting, and changing businesses. Yes, they can bring outsize rewards for a few. But they more often leave poor returns (or losses) in their wake.
As Buffett puts it in the video below, change should be viewed as a threat.
Going further, change means lots of unneeded activity. You have to digest lots of information, update your thinking, worry that you’re wrong. Better to have a simple framework or model in your head about an unchanging business or industry.
Do your homework once and it could serve you for 50 years. Now, that’s my kind of return!
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Stay rational! —Adam
