By: Tinaye Muzanya
This is the last article on the investment habits of Warren Buffett and George Soros. On should realise that they may be more habits than the ones l have stated so one is allowed to add to the list but one is not allowed to remove any. One can make the habits laws.
Habit 14: experience is the best teacher
There is a famous quote that says, “Experience is the worst teacher, it brings the exam first then the lecture afterwards.” In investing l agree with the latter part of the sentence but disagree with the earlier part of the quote. By apply the habit of monitoring ones mistakes and correct, as ones experience increases so does his returns. Many would consider it stupidity to think they can take on Roger Federer and actually win if one has close to zero experience in playing tennis. So often many do this with the markets then after they lose their money they come to the realisation that they were foolish.
When Buffett was twenty he had a vast amount of experience. “His first stock purchase , at age 11, was Cities Service. He brought three shares at $38 – and they soon dropped to $27. Buffett hung on, eventually selling out with a $5 profit. After which the stock kept going up all the way to $200. (Tier, 2009:140)” This is where he learnt habit 8: be patient. George Soros had 17 years of experience when he established the Double Eagle fund.
Habit 15: Never talk about what you are doing
During a TV interview when Soros was asked,” what are your favourite stocks.” he replied by saying “I’m not going to tell you. (Tier, 2009:147)”. Warren Buffett says, his “idea of a group decision is to look in the mirror. (Tier, 2009:147)”. Buffett and Soros never share ideas. Usually when a novice investor asks for advice, he is looking for confirmation that his investment is a good one. Buffett and Soros have enough confidence to think independently. They do not need anyone to confirm their idea’s, if their idea needs to be corrected they will be corrected by the market.
Habit 16: Live below your means
Unlike most investor or traders that are led by greed, these two investor have learnt that greed is bad. One of the main reasons why they have been able to sustain their wealth is that they learnt to save and only spend their cash on things that they need.
Habit 17: it’s not about the money
“l’ll keep investing as long as l live. (Tier, 2009:162)”, says Buffett. The reason why Buffett still invests even though he is in his eighties is because he finds it stimulating. His motivation is to have fun. Soros on the other hand, “his primary satisfaction comes from proving his ideas in the marketplace. “It’s the adventure of ideas that attracts me,” he says. (Tier, 2009:165).”
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