Last week, I responded to an Ask Larry question regarding the common mistakes people tend to make in life and I enumerated my reply in list form. I was inspired to write today’s blog based on #10, “You think you already know how things work.” It made me think about short cuts.
Even though the shortest distance between two points is a straight line, if that straight line happens to take more time than we anticipated, we will forego the obvious and pursue a short cut. It will always be simple human nature for some to try to find hidden detours that will save them time and/or money to help expedite the results they want. Never mind the fact that they have prior knowledge of others unsuccessfully attempting this same short cut, or worse yet, believe they are the smartest person in the room and therefore, will clearly be the first to successfully complete such a unique undertaking. Their ignorance and/or arrogance usually overshadows their common sense and leads them to shun their instincts—shutting up that simple little voice in their head that reminds them that if they choose to pursue such a detour or undertaking, it will most likely fall under the category of, “If it’s too good to be true, it probably is!” Yet despite their rational inner voice, people still manage to ignore their instincts, start their life engines (without a GPS), and embark down their own mental interstates only to find themselves lost and stuck in the middle of life’s nowhere.
Why the urge?! What possesses normal, intelligent, educated adults (young and old alike) to ignore basic common sense? It took me a mere ten years to answer this question, but before I share my answer, I want to tell you a true story.
Back in 1996, I discovered the stock market. Discount brokerage firms such as E-Trade, Ameritrade, and Charles Schwab were enticing the Wannabe Wealthy with a new platform called online trading. For only about a third of what traditional discount brokerage firms previously charged us for commissions, one could now go online, research their own stocks, and execute their own trades. America was in the middle of a raging bull market and we were the Captains of our own financial destiny—only a click or two away from financial freedom.
At this same time, I began studying the investment strategies of value investors, Ben Graham and his successful protégé, Warren Buffett. The tenets of both Graham and Buffett’s investing strategies were simply, be patient and wait for a company’s stock to become undervalued (or cheaper) compared to its fundamentals (e.g. financials) and then as Buffett likes to say, “Be greedy when others are fearful, be fearful when others are greedy.” Simple advice, straight forward… Success was around the corner!
Nonetheless, I chose to ignore these simple lessons, forego patience, and embark on my own investing strategy. Hey, it was a bull market, everyone was making money, and I was, afterall, the smartest person in the room. That lasted until March 10, 2000—the day when the so-called “dot-com bubble” finally burst. Through 2000-2001, those once high-flying, overpriced dot-com technology stocks started tumbling right along with my paper stock profits. Both were in utter free-fall. Here’s the crazy-irony of the story: on May 1, 2000, I attended the Berkshire Hathaway shareholder’s meeting and listened intently (or so I thought) to Warren Buffett as he answered an attendee’s question. When asked why Berkshire Hathaway was not investing in technology stocks, Buffett replied (as best as I can recall), “The Dairy Queen Dilly Bar will far outlast many of the dot-com companies.”
Sadly, I did not listen. I ignored my basic common sense because I wanted a quick fix. Like so many, I was insistent on taking my own short cuts.
The ten-year lesson for me was simple: stop taking short cuts. As in all aspects of life, there are no quick detours to success. To quote the great Opera singer, Beverly Sills, “There are no short cuts to any place worth going.” Success for normal, intelligent, educated adults (young and old alike) is patience, dedication, determination, and most importantly, persistence.
There is no such thing as an overnight success. It takes MANY years of hard work, learning, experimenting, and failing. Be patient and focused as you design YOUR sustainable life plan with realistic, attainable short-term and long-term goals. By avoiding unnecessary short cuts now, you will definitely enhance your probable outcomes in growing your future success.