Last year I read a book on investing called “Richer, Wiser, Happier” that broke down how the greatest investors of all time made their money.
So the book broke down how Warren Buffet got wealthy…
And Joel Greenblatt…
And even Sir John Templeton…
Now the investing strategies shared in the book were certainly interesting…
However…
The thing that grabbed my attention the most was a theme that came up over and over again in the book.
And that theme was this…
One of the keys to being a legendary investor is your willingness to be an outcast, to look like an idiot and to be ok with people ridiculing you.
That was very evident.
If these guys were looking for people’s approval…
Or they wanted all the other investors giving them kudos…
Then they would have never turned into great investors.
Why?
Cause the majority of the moves these guys made did NOT look like good moves when they made them.
I’ll give ya a good example of this…
In the movie, The Big Short, Michael Burry tells his boss that he wants to short housing bonds in 2006.
At the time, the housing market was on fire…
And people were making money hand over fist in housing.
But Burry saw the cracks in the market.
And he knew it was going to collapse at some point when the interest rates on ARM mortgages went up.
It was only a matter of time.
So what did he do?
To the dismay of his investors, he shorted the housing market for $1.4 billion.
Which caused a huge uproar.
He was getting panicked emails from his investors trying to pull their money out.
And this only got worse as the housing market continued to go up in 2007.
His investors thought he had lost his mind.
So they wanted out.
But despite all the uproar, and the ridicule…
Burry wound up having the last laugh.
After the housing market collapsed in 2008 (as he predicted), he sold his short positions and netted a 489% return for his investors.
To put that in context, the stock market returned about 3% over that same period.
So he beat the market by 163x.
Pretty amazing.
But none of that would have been possible if Burry wasn’t willing to be an outcast…
If Burry was concerned with what people thought of him…
Or if he was trying to make sure everyone liked him…
He would have never gotten that 489% return.
And that’s what I want you to takeaway from this.
Cause the same thing applies to entrepreneurs…
Or even someone who leaves their 9-5 to do their own thing.
It comes with a lot of ridicule.
And a lot of snickering behind your back…
So you have to be willing to endure that.
You have to be willing to not fit in.
And to have people constantly doubting you.
That’s the key.
So keep that in mind…
And enjoy your Thursday.
– Justin
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