10 truths of Value Investing – psychologist and Omaha returnee Dr Ilze Alberts

Ilze AlbertsI’m spending Saturday with clients of Standard Bank Online Share Trading providing feedback on the Value Investing conference in Omaha earlier this month. There’s much to share but to make sure nobody gets bored, included in the day’s programme is an hour of David Shapiro, a Berkshire AGM veteran, and the Alberts duo, Roelf and Ilze. The Alberts’ were making their first trip to Omaha and signed up for a three day course focusing on getting inside the head of Warren Buffett. They’ll be sharing what they learnt from people like Buffett’s daughter Susie and his long time lawyer and Berkshire director Ron Olson. Ilze wrote the piece that follows for her blog and kindly allowed us to republish it. Last I heard, there were still five places left (we’ve capped the event at 50) so if you’re looking for a last minute inclusion and are not a Standard Bank OST client, drop my better half an email via [email protected]. Cost is R1 200 (good value – the Omaha event was priced at $1 695). – AH  

By Ilze Alberts*

I have been up and down with the management of my money over many years. There were times of feast and equal times of famine. Until the day I was introduced to the principle that money is a form of energy and the way I value money will be the way money values me. Like many people, I grew up with lopsided perceptions about money, like “money does not grow on trees” and “money is the root of all evil”. Very confusing and limiting beliefs if you want to create a plan of action to grow your money to enable you to become financially free and independent.

A couple of years ago Dr. John Demartini, Human Behaviour Specialist, introduced me to a way and plan in building up my wealth in the form of money. I am a wealthy woman in many other forms, like in relationships, health, love, intelligence and many more, but the introduction to understanding the value of money, opened a whole new world to me; the world of saving and investing.

The first books I read were “The richest man of Babylon” written by George S. Clason in 1926,   “Think and grow rich” written by Napoleon Hill in 1937, “Rich dad poor dad” written by Robert Kiyosaki; and “How to make one hell of a profit and still go to heaven” written by John Demartini. I learnt about the wisdom of saving and investing. But I did not know how to invest with certainty and with a plan of action that will take me to financial freedom.

Then I discovered value investing and the art of growing money through value investing. Can you understand my joy when I arrived in Omaha, the hub of the biggest value investors, Warren Buffett and Charlie Munger. And to be surrounded by other men and women from all over the world with a keen interest in value investing.

In a nutshell, this is what has stood out for me as some of the 10 most compelling traits and behaviours successful value investors own:

1) Love what you do and dedicate your life to that. Buffett and Munger have found the way to do what they love and love what they do and “tap dance to work”.

2) Buffett and Munger developed the ability to listen to and trust their own inner voices. Buffett is often quoted for his inner scorecard approach. He says you can have an inner or an outer scorecard. You can choose to listen to all the voices on the outside, or you can choose to listen to your own inner voice and learn to trust it. During the Dotcom period he chose to listen to his own inner voice and not get swept up by what others were saying.

3) Align yourself with the best people to support your highest values. Surround yourself with like- minded people. Buffett says he checks most of his decisions with Munger. They have a partnership and friendship over many years of Buffett’s 84 years and Munger’s 90 years of existence.

4) Keep your emotions out of financial and business decisions. Be rational and decide with your logical mind and not with your emotions.

5) Develop the art to trust those you delegate to and have a hands-off approach. They promise the managers of their businesses that they will continue to manage their own companies without interference from Buffett and Munger. Charlie Munger says: “by the standards of the world we over trust but it works for us. It seems that the more we trust the more we get performance.” They give credit to their managers and don’t take the credit for themselves.

6) Delayed gratification says it all….

7) Buffett and Munger say the market is here to serve you not to instruct you. They say it is wise to use Mr. Market as a servant as Mr. Market is manic depressed. They follow their plans of action without getting swayed by the market.

8) They train their minds and bodies and both read avidly every day. Buffett runs on a treadmill and Munger plays golf, Buffett plays online bridge every day and both say reading takes up most of what they do every day. Their minds are razor sharp even at ages 84 and 90!

9) They are on time and value their time and the time of others. They both consider time as a valuable commodity and they use their time wisely for what is of highest value and importance for them.

10) Both Buffett and Munger believe credibility and human behaviour knowledge are strong motes. They both studies human behaviour over all the years of value investing and were cognizant of their habits. They perceive character to be their inner moral compass and they put high premium on ethical conduct. These are by far not all the outstanding and compelling traits and behaviours successful value investors own.

These are only 10 that stood out for me among many others. I am interested to understand more about these geniuses and like Newton, I want to stand on the shoulders of giants, for then I can see further. I am making it my next project, to study it more and write about is and help people to own the traits and behaviours.

* Ilze Alberts is a registered psychlogist and coach. She is the founder of the Bella Vida Centre in Bryanston.

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