The Oracle of Omaha, Warren Buffet, is commonly considered the greatest investor in the world. His US$117 billion backs up that statement. What makes it even more impressive is that he has given away billions of dollars as well.
Every year, buffet, along with his business partner, Charlie Munger, the cantankerous grandfather to Buffet’s homely kind grandpa, host an annual meeting for all the shareholders of their company, Berkshire Hathaway, commonly called the ‘Woodstock for Capitalists.’
At these events, there is a treasure trove of ideas and suggestions. Buffet and Munger never talk about how they pick stocks but they do go into detail on how they think about what they do.
Think Less
They are not trying to look at every business, every industry, every share, they are trying to eliminate everything they can. Everything they don’t understand. Everything that is overpriced. Every industry that has too many unknowns.
They want to get down to a “small universe” of stocks to really think about.
Filters
So how do they get down to this “small universe” of stocks to then invest time and thought into?
They use filters. They won’t reveal what their filters are, that is their secret sauce, but “things have to get through very quickly (their filters) before we’re willing to think about them.”
They want to screen out ideas, rather than indulge in every idea out there.
What Does It Mean For You?
How do you use the successful thought process of Buffet and Munger to help you in your life?
- Create ways to screen out ideas.
- Figure out what has worked in the past?
- What areas do you understand?
- How much energy does it take to understand the concept?
- What areas give the most return to you, time wise, value wise, energy wise?
The idea isn’t the spend time thinking about everything, but to spend a lot of time on the decisions that need to be made. One great decision is better than many mediocre ones.
An example of their annual meeting
Luke McMeeken-Ruscoe 
3 thoughts on “Think About Less”