In the 2008 shareholder meeting of Wesco Financial, a shareholder asked Charlie Munger to describe what caused Warren Buffett’s success.
“His success…is a lollapalooza,” Munger replied – a confluence of factors moving in the same direction.
Munger outlined the following seven key factors which combined together to cause Buffett’s success –
- Mental aptitude (Being seriously smart)
- Having great interest in the subject (“It’s very hard to succeed in something unless you take the first step – which is to become very interested in it.” ~ Sir William Osler)
- Early start (If something takes a long time to achieve, you better start early)
- Being a learning machine (Keep learning and learning)
- Reinforcement (Human beings work well if they get reinforcement – constant rewards for doing well, which drives you to do more of the same)
- Being correctly trusted by people
- Avoiding envy, jealousy, self-pity, vengeance, and extreme ideology