If you’re not 10 years old anymore, do you still think wearing the same shoes as Michael Jordan, Kobe Bryant, or LeBron James will instantly transform you into an NBA all-star? I’m sure many great players of all ages who look up to these NBA superstars are inspired by these superstar’s success, but know they have to work hard themselves and make the best of what they have right now.
We’ve been writing a lot about going with the trend, and we were asked a question that we’ve been asked tons of times:
“…What about Warren Buffet?… Guess he’s the trendsetter rather than an outlier…”
If you’ve asked a similar question about Warren Buffet, just to yourself or when discussing investments, here’s a few key ideas to consider. Warren Buffet is a great inspiration and iconic figure of investing. Just as Michael Jordan, Kobe Bryant, and LeBron James are iconic figures of basketball. If you’re not already a multi-billionaire with a lot of influence, you’re probably not in the same position to do the same investments that Warren Buffet is right now. But when Warren Buffet started his journey he wasn’t a multi-billionaire either. He didn’t, and couldn’t, do things the way he does them today! Michael Jordan didn’t become Michael Jordan the superstar by wearing Air Jordan Nike’s in his high school days, nor his North Carolina Tar Heel days, nor the first few years of his NBA career.
Many of our friends and family as well as our readers look at Warren Buffet’s end result, his success, and believe what they know about Buffet now is enough to become a successful investor. Many fail to see that the Buffets and Jordans of today is the culmination of endless hours of intense hard work, tons of failures that translated into tons of experience, being overly prepared so they could take advantage of opportunities and connections when they arose. At various stages of their lives and career they did things differently. They just worked hard enough and were prepared enough to know what to do at each stage.
For the majority of us investors, not just folks like you and me but also professionals managing millions, we are in a different league than Buffet. Yes, millionaires are still considered small fish in the world we live in today. And most of us have to play a different game to play. Most of us with bills to pay, families to take care of, and limited savings don’t have the luxury to wait decades for an investment to grow, or even have the team of top financial minds doing our secretarial work. Nor are we in a position like Buffet is to negotiate with Goldman Sachs, the most powerful investment bank in the world, a limited risk investment with great returns. Buffet is what traders call a “Whale” in the stock market, one of the few along with countries like China and big banks like Goldman Sachs, is enough to turn back Tsunamis and make their own waves.
What can we do? We can be smart with our small size and play the best game in front of us. If you have your own investing or trading style that is printing you money, great! Stick with what works. But for those who just aren’t sure what the best game in front of us is, we want to start with something simple: going with the trend. The trend is basically the Tsunami that Buffet or China is creating. It has so much momentum it takes a long time to stop. Like a Tsunami, there’ll be low tides where those skilled and brave can go against the tide to make some money. But we’re here to keep it simple and do it as easily as possible. We don’t want to stand in front of a Tsunami. But if we can increase our bank account a couple times over, it is a good start to moving on to the next stage. A word of caution. When Buffet or other big investors are creating the Tsunamis, they won’t publicize it. Tsunamis are too fast and too strong. By the time you read about what Buffet has added to his portfolio, notice the word tense. It’s past. The news is out. The big wave of the Tsunami for you to ride may be mostly over.
We suggest reading some of our other articles around the web or learning for yourself how to invest with the trend early. Maybe someday you’ll be a Whale like Warren Buffet, but even just getting half way there as a millionaire isn’t too bad.