Good ideas come along, and they do so on their own schedule.
Most of us know Warren Buffett's strategy of only buying companies that he understands and has a healthy amount of predictability built that comes with them. How does that work with Buffett's comments that good ideas come along when they want to?
What Buffett is in reality saying is, that even the best plans and understanding can't absolutely ensure exact predictability. If that was the case, we could easily know where our companies would be at any one time. That's just not going to happen.
The point Buffett is making is while we can have reasonable predictability in companies we understand and aren't a commodity, and at the same time there can be large periods of time where great ideas may be at a premium.
The discipline here is to keep ourselves ready for anything while we go about our daily operations. While we can plan and project out, we need to be willing to adjust, be flexible and opportunistic at any time when something that really makes sense presents itself.
This isn't as easy and obvious as it sounds because we can get caught up in daily operations and the status quo, and miss some great opportunities because we weren't always looking for those ideas that can come at any time.
Discipline is involved with both sides of this. We need to have the discipline to take care of the daily responsibilities before us, while having the discipline to look for new ideas that occasionally come around and shake things up. To neglect either one of these can hurt a business badly.
They aren't opposites or at tension with one another, but rather they are two sides of one thing: the need to continue on and go forward. You continue on and go forward by taking care of the daily needs, and you continue on and go forward by being open to what may be coming down the pipe.
We need to be open and flexible because there's no way of knowing when these times will happen. Buffett is both of these for Berkshire (BRK-A).
Other Buffett Resources:
Warren Buffett: The trouble with being a legend
Warren Buffett: 'I told you so'
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Most of us know Warren Buffett's strategy of only buying companies that he understands and has a healthy amount of predictability built that comes with them. How does that work with Buffett's comments that good ideas come along when they want to? [Read More]
Tracked on: June 11, 2007 7:27 PM | Permalink to Trackback