The idea to write this
post Predicting rain doesn't
count; building arks does comes from the book (My favorite) Seeking wisdom fromDarwin to Munger by Peter Bevelin.
The
title of the post comes from the well-known investor and one of the richest
person in the world: Mr. Warren Buffet. This is Buffett's Noah principle:
"Predicting rain doesn't count; building arks does."
What does it mean?
It means that telling us about market problems isn't as important as how you act on them.
In
stock market, the fluctuations are the part of the market, it works on crowd
mentality and all the participant in the market don't think in the same way.
The same information is viewed by different people in diverse ways and the
meaning also withdrawn in diverse ways. So, the reactions also different. That’s
why the market go up and down. And what buffet says here is don't worry about this
fluctuation. What Buffett suggests is "Building arcs", meaning use
this fluctuations in your favor for the long term wealth creation. If all fundamental
is right than invest more in your portfolio on reasonable price levels and this
fluctuations (Rain) will help you to get the reasonable price to invest (Help
you to create your arc for the long term wealth).
The
Noah principle is applied to all unpredictable scenarios (Black Swans in
terms of Nassim Nicholas Taleb) whether in market or in life or in
business.
What peter Bevelin says
in his book is:
"Why invest resources in something today since we don't get any credit for preventing something we don't even know will happen. "
The world is a complex
adaptive system and we cannot predict for sure anything in short term. So how
can we predict the market direction in short term. So, the advice is always bet
on long term investments.
We often ignore distant
problems and we are reluctant to prevent future threats. Your decision should
have a margin of safety, always have some buffer for to go wrong in your
decision. You are just a human being and mistakes are part of the decision-making
process and can go wrong as well. So, for taking decisions, always keep achecklist of all possible errors or threats, that may impact your long-term
decision and direct you in the wrong or right directions. So, the advice is,
always keep a margin of safety and always keep a checklist while taking major
decisions. One more thing, always keep learning and keep reading, there is
nothing called failure or success, it is just learning.
Peter Bevelin shares the
words of Warren Buffett in his book as:
"It took Noah 20 years to build an ark. And people said he was being silly because the skies were beautiful. And of course, the whole time, he looked stupid - until it started raining. You can spend a long time building an ark while everybody else is out there enjoying the sun."
What is the lesson learned here?
Your efforts to improve
will draw criticism or ridicule from people who don't care about self-improvement.
It's possible you will spend a long time doing things without a reward and
starts wondering whether your goal makes sense. Like I am writing this blog and
I know it may take a very long time to make sense for me as well as for my
readers. But I think it’s a journey for a lifelong learning and as Lord Krishna
suggests in Bhagvad-Gita, focus on your Karma, don’t think about the outcome. So,
just keep reading, writing and learning, one day you may acquire the worldly
wisdom.
"Karmanye Vadhikaraste, Ma phaleshou kada chana, Ma Karma Phala Hetur Bhurmatey Sangostva Akarmani"
Meaning:
"You have a right to perform your prescribed duty, but you are not entitled to the fruits of action. Never consider yourself to be the cause of the results of your activities, and never be attached to not doing your duty."
Let’s experience in our
day to day life, what is the meaning of the teachings from Krishna and
teachings from Mr. Buffet –
Is it worth it to spend
several years working so hard to get a degree, build the business or move up
the ladder in your company or invest for long time, reading books and writing
this blog while others are partying and enjoying their lives on credit?
I think for me, it is a
big YES. I am not writing
this blog for anyone else, I am not reading the books for anyone else, I don't
invest for others. I do this all for myself, I enjoy doing this activity. this
is one reason for me to worth this all. The second is, I believe in Karma. Just keep doing the work.....
I know this is a very long
process, and during the process you might face doubts and even feel tempted to
give up. However, five or ten years from now, the once who were wasting time
will get the short end of the stick when they realize that they wasted their
time on ultimately meaningless pleasures (Tools of mass destruction), borrowed
money on credit cards to enjoy the temporary pleasures, they don't know the
benefit of delaying the gratification. Now, they are in debt, worrying about
how to pay their bills, and doubting that they will never have a successful
career, while you are enjoying the fruits of your labor.
check the analogy:
Predicting rain doesn't count is
enjoying (wasting) the precious time on meaningless things and building arks does meaning
investing the same time in meaningful things.
Whenever you are in
doubt, remind yourself that you are building an ark and that rain will come.
May be now you aren't enjoying yourself as much as others are, but in the grand
scheme of things or life, it's better to be prepared and suffer a little now to
prosper in the future that live in sweet denial and one day when you realize
it, then it's too late.
Most of my friends ask
me, why I read books, why I spend less, why I invest the remaining, whatever
left or reverse, why I invest first and manage my expenses in the remaining?
My answer to them is, I am building an ARC for myself, it may, the rain
(Any tragedy) come in future.
Now, we all understand,
what the ARC building and what is the rain. Let’s explore some more, how we can
build our own arc in life, so we get very less damage while it will rain.
Deciding to do nothing is also a decision. And the cost of doing nothing could be greater than the cost of taking an action.
We are the product of
our past decisions, that we have taken at some point in past in our life. Whether decision
you take consciously or not, but the decision is always taken, because deciding
to do nothing is also a decision. And if all the time, we are doing some action
as per the decision we make or not make, then it’s better that we should act on
our conscious decisions instead of unconscious random life decisions that
life through up on us, because the cost of doing nothing could be greater than
the cost of taking an action.
Remember what you want to achieve.
In the process of
building your own arc, you should be having a pre-planned blue print or architecture
structure of the arc in your mind. else you make something that is of no use.
So always know what you want (Your Arc). then act accordingly.
Once we know what to do, we should do it.
If we identified our arc
and we have our blueprint ready clearly in our mind, then why we are not building the arc. Once
you know what to do, just do it.
The 19th Century British
biologist Thomas Henry Huxley said:
"Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do when it ought to be done whether you like it or not. It is the first lesson that ought to be learned and however early a person's training begins, it is probably the last lesson a person learns thoroughly."
In simple words, if you
want to travel from the city A to the city B in a car in night, then just start
driving, you have car and you have light, the road will be visible to you in
the night as well with the help of the car lights, and you will reach to the city
B. The thing that is required is the courage to drive in the night.
The first step in solving a problem is to recognize that it does exist.
Start building your arc
today, small steps make significant difference in long time. Who know when the rain
will start.
Keep reading, keep
learning.
-Mahesh
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