How to find “countless ways to optimize the odds of success”
As William Green explains, he wrote this book in order to share what he learned from “a pantheon of investment legends [about the] principles, processes, insights, habits and personality traits [that] enable this tiny minority to beat the market in the long run and become spectacularly rich…More important, how can [others] profit by studying these financial outliers and reverse engineering their winning ways?”
In alpha order, these legends include John Bogle, Warren Buffett, Jean-Marie Eveillard, Helmet Friedlander, Benjamin Graham, Joel Greenblatt, Peter Lynch, Bill Miller, Mark Mobius, Walter Morgan, Charlie Munger, Michael Price, Bill Ruane, Mario Sarofim, Sir John Templeton, Ed Thorp, and Arnold Van Den Berg.
Until reading this book, I was unfamiliar with most of these “titans of the investment world” and that may also be true of you and others who read my brief commentary. Familiarity is irrelevant. Learn HOW THEY THINK, not only about investments but also, and perhaps of greater importance, learn HOW TO MAKE THE RIGHT DECISIONS in order to MAXIMIZE THE CHANCES FOR SUCCESS, however “success” is defined.
For example, as Green suggests in the Introduction, “That mental habit of thinking dispassionately about facts and figures, probabilities, trade-offs between risk and reward, and the paramount importance of simply [begin italics] avoiding catastrophe [end italics] does much to explain how the savviest investors live long and prosperous. As Thorp sees it, every aspect of our behavior should be guided by an attitude of ‘generalized rationality.'”
What we can learn from Green is largely based on what he learned from various “titans of the investment world.” Keep in mind that what they learned is largely based on what they learned from countless others.
For example, Ruane learned four key principles in the 1950s from “a major star” named Albert Hettinger. “Those simple rules have been of enormous importance to me. They formed the basis for a large part of my philosophy ever since…and they are the best advice I can give people.”
Munger once remarked, “I observe what works and what doesn’t and why.” Green adds, “His role models include Charles Darwin, Albert Einstein, Benjamin Franklin, and a nineteenth century algebraist named Carl Gustav Jacobi. ‘I learned a lot from a lot of dead people,’ Munger told me. ‘I always realized that there were a lot of dead people I ought to get to know.'”
If this concluding portion of my brief commentary doesn’t motivate you to get a copy of William Green’s book and then read and re-read it with appropriate care, I really don’t know what will.