Today’s Take: “Go to bed smarter than when you woke up.” — Charlie Munger
“Hello Joan, this is Mrs. Mizrahi. Could you please send Charles home? Tell him dinner is on the table.”
Before beepers, smartphones and texting, my mother always knew where to find me.
Mom would call the Brooklyn Public Library, which was just a few blocks from my house. By the time I was in fifth grade, she was on a first name basis with the librarian.
I’ve always loved reading from as far back as I can recall.
After I finished one book, I’d ask Mom for another book … and another … and another. They were like potato chips to me. I couldn’t just read one. Many times, I’d read for two to three hours at a time.
The first book I read by myself was the summer before I entered first grade: Harry the Dirty Dog. It left such an impression.
(In fact, a few months ago, my five-year-old granddaughter came to visit. And I went to my bookcase to hand her the very same book. We read it together, and I’m blessed that she has the same thirst for reading that I have.)
I remember when Mom took me and my brother to get library cards. When the librarian handed it to me, it felt like she handed me the keys to the kingdom!
I’d wander around and take books off the shelf at random if they looked interesting, no matter what the topic — history, science, business, biographies, you name it.
Being able to read opened up new worlds for me. And for anyone, learning something new is within reach just by opening a book…
Knowledge Builds Up Like Compound Interest
I’m very fortunate that I’m in a profession that requires plenty of reading. In almost 40 years of being in the financial industry, I haven’t met a single successful investor who didn’t enjoy reading. Not one.
In addition to reading at least one book a week, I read hundreds of pages of annual reports, presentations and transcripts. I’ll read anything that can help me learn about a business I’m researching.
I learned this from legendary investor Warren Buffett. He once said that he spends 80% of his day reading. And his business partner Charlie Munger calls him a learning machine.
A few years ago, Buffett was speaking to an MBA class. One of the students asked him how to become smarter.
Buffett reached for a stack of papers on the desk in front of him and said: “Read 500 pages like this every week. That’s how knowledge builds up, like compound interest.”
I, too, have found that to be the secret to becoming smarter.
The more you learn about businesses — how they make money, what their competitive advantages are and why they dominate their industries — you can quickly figure out what works and what doesn’t.
No question about it, I’m a better investor today than I was five years ago. And I bet you dollars to donuts I’ll be a better one in five years than I am today. Because, like Buffett said, knowledge compounds.
But reading is only one way to gain knowledge…
Your Path to Becoming a Better Investor and Person
Another great way to learn is by talking face to face with people who are more experienced.
When I first started my money management firm, I pinned a Henry Wadsworth Longfellow quote to the bulletin board near my desk:
“A single conversation across the table with a wise man is better than ten years of mere study of books.”
It motivated me to get off my butt and meet business leaders, CEOs, analysts and anyone else who I could learn from at the time.
Being in New York City, it wasn’t hard to grab a cup of coffee, go visit an office or have lunch with someone who could increase my knowledge of an industry or business I was researching.
From those meetings, I’ve developed close friends and colleagues. Many of them I still speak to on a regular basis.
That’s how my podcast, The Charles Mizrahi Show, got its start.
Each week, I invite a different guest to interview for about an hour. I always invite people who I believe can expand knowledge for both me and my audience.
My very first guest was Governor Mike Huckabee. I didn’t sleep well the night before. I was a bit nervous.
He’s a pretty big figure. He was Governor of Arkansas and ran for U.S. President. He has his own show and does tons of media appearances. Would he really sit with me for 30 minutes and answer my questions?
Well, the interview lasted more than an hour. I learned about his upbringing, the challenges he faced and his rise to the top. And the Governor and I have even become friends.
Since then, the podcast has become a hit. I’ve had the honor and privilege to interview media king Bill O’Reilly, American patriot Mark Geist and financial strategist Peter Schiff.
In each episode, I learn something new and expand my knowledge base in all fields. It’s the kind of knowledge that’ll not only make you a better investor — but a better person, too. I guarantee you, in less than 60 minutes, you’ll walk away smarter than when you woke up.
My most recent guest, Helen Raleigh, was born in China and has firsthand experience with the dramatic cultural and political changes taking place there.
Her latest book, Backlash: How China’s Aggression Has Backfired, shows how communist China has spread its influence aggressively around the world.
You’ll want to hear what she has to say in the latest episode of The Charles Mizrahi Show. So, be sure to subscribe for free by clicking right here.
Founder, Alpha Investor