How would you change your life today if I told you that in 3 years, you would die? That’s a good thought experiment if you want to live your life with intention.
Look, life is short. We all know it. And yet, we get stuck in the mundanity. We do the same thing day in and day out.
We hardly ever think, “I won’t live forever.”
Sometimes we read a really prolific book that makes us think. Maybe it’s Man’s Search For Meaning or On The Shortness of Life.
“Have we ever made an emotional decision?” Warren Buffett asked his long-time business partner and friend, Charlie Munger, at the 2023 Berkshire Hathaway annual shareholder’s meeting. Being emotional with money is common with most people, after all.
Munger, as dry as he always is, answered without thinking1Source: YouTube:
“NO.”
Buffett said that he had never made an emotional investment decision in his life. And Munger agreed.
This was my favorite takeaway from their annual meeting. And it doesn’t come as a surprise. Buffett and Munger are famous for their rational decision-making.
Don’t set goals, create systems. Systems trump flexibility. This is a popular idea amongst people who share advice online.
I’ve written about it too. The idea is that you’re more consistent if you rely on a set of daily actions/habits that you execute without much thought instead of working towards goals.
I recently read The Road Less Stupid by the business strategist Keith J. Cunningham. In the book, he has a chapter called “Systems vs Flexibility.”
He provides a counterargument to the whole idea that you should always rely on systems. Cunningham writes:
“Systems are an amazing tool that worked incredibly well 200 years ago during the Industrial Revolution. Systems are exceptionally useful when the work being performed is repetitive (think assembly lines and flipping hamburgers) and doesn’t involve customer interaction, or when the environment is totally stable.”
Cunningham’s main criticism is that systems give you a false sense of security. If you execute a set of tasks every day you feel like you’re making progress. But that’s not always true.
Understanding stock market cycles is essential for any investor. Whether you’re a short-term trader or a long-term investor, it’s important to know how stocks move up and down over time.
By recognizing cyclical patterns in the market, you can get better at executing your investing strategy.
The up-and-down nature of markets is so hard to deal with that we often forget that markets have cycles. We get emotional and make decisions that we later regret.