Play the losers game, not the winners game
What's the most important decision you will make in your life? Your spouse.
I am an entrepreneur that has found success by focusing on daily progress. I share what I learn on the road to wealth. Here are my insights from the week:
Play the losers game, not the winners game.
What's the most important decision you will make in your life? Your spouse.
Happy Diwali
You can access previous editions of my weekly emails here. Let’s begin!
(1) Play the losers game, not the winners game.
"For what a man wishes, that he will believe. What do most people want more than anything else? They want to get rich.
Very few people think that the secret to their happiness comes from prudence and caution. Most people think that it comes from that stroke of genius which will put them on easy street. The times when most people behave in a prudent and cautious manner is usually during a crash. That's the time to turn aggressive and buy. This is when everything is being given away.
But there are no rules. There are no algorithms. There are no formulas. It is all judgment. You have to think different from everyone else and you have to be better. The problem is that most people are not above average.
So then how do you make money as an investor? The people who don't know think they do it by buying good assets. That is not the secret for success. The secret for success in investing is buying things for less than they are worth. It's not what you buy but what you pay for it. If you buy a high quality asset and you over pay, you're in trouble. If you buy a low quality asset and you pay less than it's worth, chances are you'll make money. So figuring out value and the price you pay for that value is extremely important. It's a good buy at a certain price. It's a bad buy at a certain price.
The most important thing is not beating the markets or being in the top 5%. It is controlling risk. You want to be above the middle on a consistent basis over the long term. Oaktree Capital has made 23% per year for 28 years by buying debt for less than its worth by following these principles.
Never forget the 6 foot tall man who drowned crossing the stream that was 5 feet deep on average. We can't live by the averages. We got to survive on the bad days. And if you're a decision maker, you have to survive long enough for the correctness of your decision to become evidence. And you can't count on it happening right away.
Play the losers game, not the winners game. Investing is a losers game. Avoid hitting losers to win."
- I have read Howard Marks book The Most Important Thing, but listening to him two times over was like reading the book all over again. These are all nuggets of wisdom that I pulled out from his talk.
(2) What’s the most important decision you will make in your life? The spouse.
Because the wrong one is a disaster. The right one is fantastic.
I have had the right one for 68 years. Everything we have done together, we have done as a team. It’s been wonderful. I couldn’t ask for a better relationship than I have with my wife. It’s been fabulous.
When it came to buying the World Trade Center I sat with her one day and said “sweetheart, this is what I would like to do and why."
She said, “It sounds interesting. Is there risk?”
I said, “yes, there is plenty of risk.” I told her what the risks were. Plenty of downsides.
“Is there upside?”
I said “a ton of upside, otherwise I wouldn’t buy it.”
She said “can we handle the downside if it happens?”
I said “yes.”
She said “will it effect the family adversely, to the point where we will really have problems?”
I said “no.”
She said “then go ahead try to get it done.”
We bid $3.2 billion and bought the World Trade Center.
Can you define the word “love”?
With great difficulty. The feeling you have for each other. The appreciation you have of each other. The respect. The positive attitude you carry to each other. Being there for each other, without any equivocation whatsoever. There is never an issue - should I or shouldn’t I? If it is something that is important to your family or important to your spouse, you do it. Simple. Love is a conglomeration of attitudes, feelings. There is just so much that is part of it. It is almost impossible to define.
Make sure you marry the right spouse. Nothing more important. In your entire life.
When you get to be 93, you look back. Your accomplishments, the books you wrote, the money you made - it is all meaningless. What’s the most important thing you got in your life, besides your spouse? Your family. That’s where everything is. Nothing more important in your life than your family.
- I love learning from people who are above average and are worth emulating. Larry Silverstein is 93. He is the owner of the World Trade Center. Works to this day. He spent 60 years building the same business. And he has been married to the same woman for over 68 years. Talk about consistency and longevity!
(3) Happy Diwali
May the light in you beat the dark forces you are battling. I believe that you need to be fighting some battle to make life meaningful. How else would you know what you are capable of? How else will you have something to do and something to look forward to?
So as we celebrate Diwali, let's celebrate the fact that we are alive in one of the best moments in history. That we have the opportunity to make a difference, in our own special way. Let's make that difference a positive one.
May the force be with you.
Happy Diwali
Harsh Batra (LinkedIn)
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