Page 65 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

Not “growth” or “brains” or “insight.” The ability to stick around for a long
time, without wiping out or being forced to give up, is what makes the
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biggest difference. This should be the cornerstone of your strategy, whether
it’s in investing or your career or a business you own.

There are two reasons why a survival mentality is so key with money.

One is the obvious: few gains are so great that they’re worth wiping yourself

out over.

The other, as we saw in chapter 4, is the counterintuitive math of
compounding.

Compounding only works if you can give an asset years and years to grow.
It’s like planting oak trees: A year of growth will never show much progress,
10 years can make a meaningful difference, and 50 years can create
something absolutely extraordinary.

But getting and keeping that extraordinary growth requires surviving all the
unpredictable ups and downs that everyone inevitably experiences over time.

We can spend years trying to figure out how Buffett achieved his investment
returns: how he found the best companies, the cheapest stocks, the best
managers. That’s hard. Less hard but equally important is pointing out what
he didn’t do.

He didn’t get carried away with debt.

He didn’t panic and sell during the 14 recessions he’s lived through.

He didn’t sully his business reputation.

He didn’t attach himself to one strategy, one world view, or one passing

trend.

He didn’t rely on others’ money (managing investments through a public
company meant investors couldn’t withdraw their capital).

He didn’t burn himself out and quit or retire.