Friday, March 13, 2015

Soros versus Buffett on Working

From Soros on Soros:
"Generally, we followed the principle of investing first and investigating later. I did the investing and he (Jim Rogers) did the investigating"
 "...But I don't like working. I do the absolute minimum that is necessary to reach a decision. There are many people who love working. They amass an inordinate amount of information, much more than is necessary to reach a conclusion, and they become attached to a certain investment because they know them intimately. I am different.  I concentrate on the essentials. When I have to, i work furiously because i'm furious that i have to work.  When I don't have to, I don't work."
I find these quotes interesting, and a bit surprising. Now contrast the above with Munger's description of Buffett's job as the chairman of Berkshire Hathaway. This is from Berkshire's 2014 report.
"His first priority would be reservation of much time for quiet reading and thinking, particularly that which might advance his determined learning, no matter how old he became."
The Munger/Buffett idea of investing is what I imagine great investors do. It is what attracted me to investing in the first place, and what I aspire to do. Nonetheless, the 2 approaches are not mutually exclusive and Soros' does have some advantages:

  1. Invest first and investigate later. Actually, Buffett's value investing classmate Walter Schloss does this too. He would have a smallish starter position just to get the work going. 
  2. Not spending too much time on a specific name - at least in the initial cut - could help you avoid being "married to an idea".  But then again, Buffett's idea of investing IS to be married to the company forever. 
  3. Accumulating information. I believe Buffett's reading activities, while surely targeted to answer investment related questions, also have an element of learning for learning's sake. This is one of the reasons he's good friends with Bill Gates - the two just love to learn new things. I would actually find it hard to believe Soros does not accumulate knowledge this way. Soros said: "...I don't play the game by a particular set of rules; I look for changes in the  rule of the game.".  It would be a bit hard to recognize changes to rules of the game without accumulating some minimum amount of knowledge over time.

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