Reflections in this post is taken with reference from a very interesting article about the beginnings of Stephen Schwarzman, the Co-founder of the world’s largest alternative investment firm, Blackstone.
The title of the article is: Why there are no brave old people in Finance
Lesson #1: I should have been more wary of my emotions and more scrupulous with the facts.
Stephen had allowed the excitement of closing a very exclusive deal get ahead of the need to do proper and thorough due diligence. In any investment, one of our biggest enemy is our own emotion. Trying to conquer that, is extremely tough and that is why hiring a competent person to manage your investments make a lot of sense.
Lesson #2: I began to think of investing as like playing basketball without a shot clock. As long as you had the ball, all you had to do to win was just keep passing, waiting until you were sure of making the shot.
A large part of investment success is about being patient and not to be chasing after a quick win. Those often never work, else everyone will be rich. The road less travelled is usually the path to success. And where many investors fail to stay invested and be patient, that is where riches are going to be found.
Lesson #3: We decided to involve all of our senior partners in our discussions of investments. We would never again allow one person single-handedly to green-light a deal.
When we depend entirely ourselves, we miss out on the knowledge and expertise of all the other people around us. Mistakes can sometimes be easily avoided if we learn to ask for help or choose to work as a team.
Lesson #4: I also resolved that I would never talk to just the lead partner on any potential investment. If I had detailed questions, I would call the most junior person, the one working the spreadsheets and closest to the numbers.
When we rely entirely on the people around us, some times we fall in real danger of being trapped in our own echo-chamber and totally miss differing viewpoints. We must allow ourselves to step out and be deliberate in gathering information and perspectives that are different from ours.
I would definitely be picking up the book Stephen Schwarzman wrote as he is someone I can definitely learn a lot from and hopefully, this sharing has also allowed you to pick up a tip or two about your own investment journey.