Joys Of Compounding: The Passionate Pursuit of Lifelong Learning

by Gautam Baid

In the end, we are defined by how we respond to failures and setbacks in our lives. Indifference toward the things outside our control is the essence of the stoic discipline—and it is one of the most liberating realizations in life. God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference. —“Serenity Prayer”

Our life is what our thoughts make it. —Marcus Aurelius When you change the way you look at things, the things you look at change. If you form a habit of looking for the good, you will find it in the smallest of things around you and your mind will fill with happiness. And happiness, being one of the purest forms of strength, is the key to success.

Take care of your body. It’s the only place you have to live. —Jim Rohn It’s not dying you should worry about; it’s chronic disease. What you can expect from not making the right health decisions isn’t an early death—in fact, that’s the least of your worries. Instead, you should be concerned about years, possibly decades, of suffering from chronic disease in your old age.

Buffett often says, “The chains of habit are too light to be felt until they are too heavy to be broken.”

Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that kill your confidence when they end. It’s about earning pretty good returns that you can stick with for a long period of time [emphasis added]. That’s when compounding runs wild. —Morgan Housel

The goals of investment should be happiness, joy, growth, intellectual satisfaction, and eventually, peace, and serenity. Wealth and financial prosperity are natural by-products of lifelong learning.

No wonder Munger says, “The first rule of compounding: Never interrupt it unnecessarily.”14 The way to wealth is to buy right and hold on. By doing so, an investor minimizes paperwork, transaction costs, and capital gains taxes. To reap genuine riches, one needs to invest in long-term winners and hold on for compounded, tax-free growth. No more effective tax haven exists than unrealized appreciation in a long-lived, soundly growing company. Compounding, combined with patience, is an incredible force over time.

When we bought See’s Candy, we didn’t know the power of a good brand. Over time, we just discovered that we could raise prices 10 percent a year and no one cared. Learning that changed Berkshire. It was really important. You have to be a lifelong learner to appreciate this stuff. We think of it as a moral duty.