Weekend Edition – Three Simple Ideas to Become a Better Investor

In today’s edition of my weekly piece to Dividend.com Premium members I want to touch on a theme that strings together much of what I’ve written about in this section for the past six months, and interject three timely and unprompted reinforcements of the theme that present three simple, but hopefully very effective, ideas for you to become a more successful and productive investor.

Habits Matter

I’ve written in the past about repeating the repeatable, where I used Guy Spier of Aquamarine Fund to illustrate just how habitual we humans really are. Recall that Spier was quoted as saying to a journalist that “We think we control our environment, but in fact it’s our environment that controls us.” The lengths to which Spier would go in an attempt to overcome how his environment was controlling him–recognizing just how much control it has–was incredible. In an effort to repeat and focus habits he wanted in his day-to-day investing life, he’d go to the extreme. Check the piece out again if you’re interested in a recap, but the point is: habits matter.

It was this piece I was reading in the Wall Street Journal this weekend that re-emphasized the concept of how important habits are, but it also added in an important addition. The piece is titled, “Read Slowly to Benefit Your Brain and Cut Stress.” The upshot is that we’re bombarded with more distractions than ever, and making a concerted effort to carve out a dedicated amount of time daily to read and deeply engage in the content is akin to carving out time to exercise. It should become an ingrained habit.

As an example of the distractions we have, there was a key quote in the piece that caught my eye; one of the interviewees noted, “When I realized I read Twitter more than a book, I knew it was time for action.”  The snippets and quotes we peruse via our Twitter feed don’t give our brain an opportunity to fully engage in the content and enhance “comprehension, particularly of complex material.” If we continually program our brain to be in “scan mode,” when we want or need it to dive deep into a subject matter, we’ll be ill equipped. It’s like trying to throw on your running shoes and bang out a ten miler when for the past six months you’ve been kidding yourself that exerting a little extra effort on the odd set of stairs was giving your body what you needed for exercise. It ain’t.

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Keeping it simple idea #1: Carve out 30-60 minutes per day to engross yourself in a book, annual report, in-depth study or industry report.

Take Time to Focus

While we’re on the topic of habits, I had an “aha moment” I wanted to share with you. The simplicity is the brilliance, the difficulty of execution is the tough part. Let me explain.

In a conversation with a business friend of mine, we were discussing how things were going. It was a casual conversation that left me with a profound, simple, certainly not novel, but difficult to execute idea. The summary was that he was riding high, having a clear mind, a great work / family balance (he runs a company, so certainly has a high degree of work stress) and ultimately felt great. What was his secret?

He started going to the office for between 6:00am and 6:15am each day, when historically he had been going in between 7:30am and 8:00am. That’s it.

By taking a focused 90 minutes before anyone else came into the office, he was able to get his individually achievable top priorities for the day knocked off and then devote the balance of his day to helping the others in his company and on his team to accomplish what they needed to do. Nothing novel about waking up early, but it’s a brilliant strategy and sometimes tough to do (just try it, see how excited you are on a wintery morning to see the alarm go off at 5:00am every day!).

Keeping it simple idea #2: Go to work / start your day earlier.

Try Something New

The final thing that struck me recently as I was thinking about personal habits and the habits of those around us, was an excellent Ted Talk by none other than Google’s head of webspam, Matt Cutts. Matt’s talk had nothing to do with his job, it didn’t include anything about search results, bad links or attempting to “game” Google’s search algorithm.

Again, Matt didn’t talk about a novel idea, nor a complex one either (believe me, I was listening intently for any subliminal messaging about Google’s search algorithm), nor did his suggestion discuss something costly; rather, Matt proposed a framework, a free tool so to speak, that can be an awesome gateway to changing your habits and ultimately making you a more productive investor, business person, professional, husband, wife, father, son etc. It could make you a better person.

The punch line?

Try something you’ve always wanted to do for 30 days. Stick to it.

The items you can “try” fit into two high level buckets: 1) additions and 2) subtractions. Matt uses examples of additions including:

Take a picture every day Complete 10,000 steps per day Bike to work Write a novel

Examples of subtractions:

No TV No sugar No Twitter No caffeine

It doesn’t matter what you pick, really, as long as it will potentially alter your habits for the better (an example of a 30 day challenge that would likely not alter your habits or life for the better: eating McDonald’s Big Macs for every meal like Morgan Spurlock did, which Matt alludes to in his talk), but the point is that 30 days is a great amount of time to experiment with making your life better. Of course, perhaps your 30-day challenge is “Keep it simple idea #1 or #2,” but it could be something else too.

Keep it simple idea #3: Take a 30-day challenge.