Vittal Kamath’s Kindle Notes & Highlights for Joys Of Compounding: The Passionate Pursuit of Lifelong Learning

INTRODUCTION: THE BEST INVESTMENT YOU CAN MAKE IS AN INVESTMENT IN YOURSELF

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you. —Charlie Munger

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If you take Berkshire Hathaway, which is certainly one of the best-regarded corporations in the world and may have the best long-term investment record in the entire history of civilization, the skill that got Berkshire through one decade would not have sufficed to get it through the next decade with the achievements made. Without Warren Buffett being a learning machine, a continuous learning machine, the record would have been absolutely impossible.1

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It involves a lot of hard work, patience, discipline, and focus.

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Read. A lot.

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This is how Warren Buffett, one of the most successful people in the business world, describes his typical day: “I just sit in my office and rea...

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“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”4 All of us can

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work to improve our knowledge, but most of us won’t put in the effort. More important than the will to win is the will to prepare. —Charlie Munger Self-improvement is the ultimate form of investing in oneself. It requires devoting time, money, attention, and hard effort now for a payoff later, sometimes in the far distant future. A lot of people are unwilling to make this trade-off because they crave instant gratification and desire instant results.

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advice, Todd Combs, now works for the legendary investor. After hearing Buffett talk, Combs started keeping track of what he read and how many pages he was reading. Eventually finding and reading productive material became second nature, a habit. As he began his investing career, he would read even more, hitting 600, 750, even 1,000 pages a day. Combs discovered that Buffett’s formula worked, giving him more knowledge that helped him with what became his primary job—seeking the truth about potential investments.5

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If you think of your mind as a library, three things should concern you: 1. The accuracy and relevance of the information you store. 2. Your ability to find or retrieve that information on demand. 3. Your ability to put that information to use when you need it—that is, your ability to apply it.

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The game of life is the game of everlasting learning. —Charlie Munger

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Formal education will make you a living;

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self-education will make you a fortune. —Jim Rohn Rich people have small TVs and big libraries. Poor people have small ...

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vicarious

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I don’t think any other twosome in business was better at continuous learning than we were. … And if we hadn’t been continuous learners, the record wouldn’t have been as good. And we were so extreme about it that we both spent the better part of our days reading, so we could learn more, which is not a common pattern in business. … We don’t read other people’s opinions. We want to get the facts, and then think.7

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Munger: We’ve learned how to outsmart people who are clearly smarter [than we are]. Buffett: Temperament is more important than IQ. Munger: The other big secret is that we’re good at lifelong learning. Warren is better in his seventies and eighties, in many ways, than he was when he was younger. If you keep learning all the time, you have a wonderful advantage.

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“The best investment you can make is an investment in yourself.” “The more you learn, the more you’ll earn.” “Learn from your mistakes, and the mistakes of others.”

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carve out an hour of each day just for yourself. If you need inspiration, consider how Munger would sell himself the best hour of each day.

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In an interview for his authorized biography, The Snowball, Buffett shared this story about Munger: Charlie, as a very young lawyer, was probably getting $20 an hour. He thought to himself, “Who’s my most valuable client?” And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.10

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Minimize your commute time to work and outsource all of the noncore time-consuming menial tasks to free up valuable time for self-development. The extra money spent on these small luxuries will pinch initially, but over time, you will realize that it was well worth it. In the long term, the daily investment in learning something new and improving yourself goes a long way. So, the best investment of time is to invest in personal development.

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An investment in knowledge pays the best interest. —Benjamin Franklin Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day. —Charlie Munger

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SECTION I ACHIEVING WORLDLY WISDOM

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CHAPTER 2 BECOMING A LEARNING MACHINE

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Those who keep learning, will keep rising in life. —Charlie Munger

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When someone asked Jim Rogers what was the best advice he ever got, he said it was the advice he received from an old man in an airplane: read everything.

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As Munger says, “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time—none, zero. You’d be amazed at how much Warren reads—at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”1

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The reading of all good books is like a conversation with the finest minds of past centuries. —René Descartes

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There is no better teacher than history in determining the future. … There are answers worth billions of dollars in a $30 history book. —Bill Gross

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I am a biography nut myself. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend. That sounds funny, making friends among the eminent dead, but if you go through life making friends with the eminent dead who had the right ideas, I think it will work better in life and work better in education. It’s way better than just being given the basic concepts.2

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Everything’s been done before. The scenes change but the behaviors and outcomes don’t. Historian Niall Ferguson’s plug for his profession is that “The dead outnumber the living 14 to 1, and we ignore the accumulated experience of such a huge majority of mankind at our peril.” The biggest lesson from the 100 billion people who are no longer alive is that they tried everything we’re trying.

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out where you are going and find out who has been there before. Knowledge comes from experience, but it doesn’t have to be your experience.

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Warren and I do more reading and thinking and less doing than most people in business. We do that because we like that kind of a life. But we’ve turned that quirk into a positive outcome for ourselves. We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. —Charlie Munger

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The rich invest in time, the poor invest in money. —Warren Buffett

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Shane Parrish writes: While most of us don’t have the time to read a whole book in one sitting, we do have the time to read 25 pages a day. Reading the right books, even if it’s a few pages a day, is one of the best ways to ensure that you go to bed a little smarter than you woke up.

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Twenty-five pages a day doesn’t sound like much, but this commitment adds up over time. Let’s say that two days out of each month, you probably won’t have time to read. Plus Christmas. That gives you 340 days a year of solid reading time. If you read 25 pages a day for 340 days, that’s 8,500 pages. 8,500. What I have also found is that when I commit to a minimum of 25 pages, I almost always read more. So let’s call the 8,500 pages 10,000. (I only need to extend the daily 25 pages into 30 to get there.) With 10,000 pages a year, at a general pace of 25/day, what can we get done? Well, The Power ...more

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That leaves the following year to read Shirer’s Rise and Fall of the Third Reich (1,280), Carl Sandburg’s Six Volumes on Lincoln (2,000), Adam Smith’s Wealth of Nations unabridged (1,200), and Boswell’s Johnson (1,300), with plenty of pages left to read something else.

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This is how the great works get read: day by day, 25 pages at a time. No excuses …

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The point of assigning yourself a certain amount of reading every day is to create a deeply held habit. The 25-pages-a-day thing is a habit-former! … … Read what seems awesome and interesting to you now and let your curiosities grow organically. A lifelong interest in truth, reality, and knowledge will lead you down so many paths, you should never need to force yourself to read anything unless there is a very, very specific reason. (Perhaps to learn a specific skill for a job.) Not only is this approach way more fun, but it works really, really well. It keeps you reading. It keeps you ...more

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The purpose of reading is not just raw knowledge. It’s that it is part of the human experience. It helps you find meaning, understand yourself, and make your life better. —Ryan Holiday

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The true scarce commodity of the near future will be human attention. —Satya Nadella

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Morgan Housel writes: Every piece of financial news you read should be filtered by asking the question, “Will I still care about this in a year? Five years? Ten years?” The goal of information should be to help you make better decisions between now and the end of your ultimate goals. Read old news and you’ll quickly see that the life expectancy of your goals is higher than that of the vast majority of headlines.6

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Nassim Nicholas Taleb writes, in his book Fooled by Randomness, “Minimal exposure to the media should be a guiding principle for someone involved in decision making under uncertainty—including all participants in financial markets.”7 His key argument is that what is reported in the media is noise rather than information, but most people do not realize that the media is paid to get our attention.

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ephemeral

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Andrew Ross, who says, “The smallest bookstore still contains more ideas of worth than have been presented in the entire history of television.”8

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All of the history of humankind is a short chapter in the history of biology. And all of biology is a short chapter in the history of the planet. And the planet is a short chapter in t...

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Will and Ariel Durant’s work compresses five thousand years of history into one hundred pages of conclusions. It focuses on timeless truths, not on today’s trends—the antithesis of social media. The book highlights the lessons of history, not the events that define it.

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Always respect the old. Apply the “Lindy effect” to reading and learning. According to Nassim Taleb, “The Lindy effect is a concept that the future life expectancy of some nonperishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy.”9 So, a book that has stood the test of time and survived fifty or one hundred or five hundred years and is still widely read because it contains timeless wisdom is expected to survive another fifty or one hundred or five hundred years for that very ...more

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The man who doesn’t read good books has no advantage over the man who cannot read them. —Mark Twain

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How to Read a Book

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Elementary reading.