Waste a Few Hours, so You Don't Waste Years - Darius Foroux

Alessio Frateily

Hatched by Alessio Frateily

Sep 18, 2023

4 min read


Waste a Few Hours, so You Don't Waste Years - Darius Foroux

In the world of investing, there are a few individuals who have stood out for their exceptional success and ability to make smart decisions. One such person is Mohnish Pabrai, the founder of Pabrai Funds and author of The Dhando Investor. Pabrai is well-known for his stoic tendencies when it comes to investments. He manages his emotions and sticks to his plans, regardless of whether the market is up or down. This approach is inspired by Warren Buffett's philosophy of treating investing as a no-called-strike game.

Buffett once said, "The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch." This means that investors don't have to jump on every opportunity that comes their way. They can patiently wait for the right opportunity to come along. The problem is, as a money manager, there is often pressure to always be making moves, which can lead to impulsive decisions. However, successful individuals like Pabrai understand that personal energy is limited, and it's important to only spend time and energy on things that truly matter.

This brings us to the concept of "killing time with intention." Often, we view wasting time as a negative thing. But what if we flipped the script and looked at it as a deliberate act? If we waste time intentionally, then it's not truly a waste. It becomes a way to enjoy life and recharge. By being aware of how we spend our time, we can make sure that we are investing it wisely in activities that bring us joy and fulfillment.

Another key aspect of successful investing is understanding your circle of competence. This concept has been used by Warren Buffett for years as a way to focus investors on operating only in areas they know best. Buffett explains that we don't have to be experts on every company or every industry. Instead, we should focus on evaluating companies within our circle of competence. The size of the circle is not as important as knowing its boundaries.

To illustrate this, Buffett shares the story of one of his business managers, a Russian immigrant who built the largest furniture store in Nebraska. This manager had a narrow circle of competence, but it didn't hinder her success. She understood cash, furniture, and real estate, but she didn't understand stocks. So she stayed away from them and focused on what she knew best. Her focus allowed her to overcome her limitations and achieve extreme success.

The lesson here is that we should all figure out where our own aptitudes lie and play within our circle of competence. If we try to play in areas where others have the advantage, we are bound to lose. But if we focus on our strengths and operate within our own circle, we can improve our odds of success. It may take time and discipline to expand our circle of competence, but it's important to be honest about where it stands today and never be afraid to say "I don't know."

In conclusion, wasting time intentionally and understanding our circle of competence are two important principles that can lead to success in investing and in life. By being aware of how we spend our time and focusing on areas where we have an edge, we can make the most of our limited resources. Here are three actionable pieces of advice to apply:

  • 1. Evaluate your activities: Take a step back and evaluate how you spend your time. Are you investing it in things that truly matter to you? Cut out activities that don't align with your values and focus on those that bring you joy and fulfillment.
  • 2. Define your circle of competence: Reflect on your strengths and areas of expertise. Identify the industries or fields where you have an advantage. Focus on operating within your circle of competence and avoid straying into areas where others have the upper hand.
  • 3. Embrace continuous learning: While it's important to play within your circle of competence, that doesn't mean you should stop learning. Seek opportunities to expand your knowledge and skills gradually over time. Keep an open mind and never be afraid to admit when you don't know something.

By following these pieces of advice, you can make the most of your time and increase your chances of success in investing and in life. Remember, wasting a few hours intentionally can save you from wasting years on things that don't truly matter. So go ahead, embrace the art of killing time with intention and enjoy your life to the fullest.

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