Well, the obvious answer to that one would be that for Buffet, reading every day is normal life!
Ben
once wisely said: “An investment in knowledge pays the best interest.” Perhaps the source of Buffett’s true wealth is not just the compounding of his money, but the compounding of his knowledge, which has allowed him to make better decisions.
Or as billionaire entrepreneur, investor, and philanthropist Paul Tudor Jones has eloquently said, “Intellectual capital will always trump financial capital.”
It is obvious that reading can contribute greatly in that endeavour. I have been fortunate enough to develop that as a habit from my early school days. I recall distinctly, when I was in standard IV or so, going to the school library and discovering a treasure trove of Enid Blyton and Biggles and Nancy Drew mysteries! My joy knew no bounds and my enthusiasm for reading even fired up the teacher, who was in charge of the library, to seek me out and recommend different books for me to read.
Every diamond needs to be polished, and so it was with me that at every stage, there was always someone who would be affected by my enthusiasm to read and guided me further along the path towards better reading.
But more than anything else, it burnished the reading habit and made it an inseparable part of my life. It continues into this day, where, alas, paucity of time clearly limits what I can read.
However, technology is a great help these days what with some superbly curated reading lists being provided by many, many blog writers and websites! God bless them for this fantastic service.
Here’s an amazing truth: no matter our circumstances, we all have equal access to the favourite learning medium of Bill Gates, the richest person in the world: books. Top performers in all areas take advantage of this high-powered, low-cost way to learn. Reading books improves memory, increases empathy, and de-stresses us, all of which can help us achieve our goals.
Books compress a lifetime’s worth of someone’s most impactful knowledge into a format that demands just a few hours of our time. They provide the ultimate ROI.
So, what you are doing really is compounding your returns by really compounding the time! Like Marie Curie said once, Everyone on this planet has the same 24 hours to accomplish what they want.
It is what they do with their time that really makes the difference. Obviously, the more successful people are able to ‘compound’ their time better! Reading is definitely one of the ways towards this compounding effect.
For, if you don’t know and then don’t know how, how are you ever going to do? Books are the low cost way of knowing and then read more books to know how to do and finally go out there and do it.
Of all the skills that one can develop, I believe there is none more important than the ability to read. Unfortunately, in the current environment of TikTok and Instagram, everything is being reduced to 15-second
gyan!
We have all become a generation of instant gratification seekers. Everything has to happen now! All this will create is a bunch of people who know about many things but not beyond the first 15 seconds of it.
Books are amazing. It may be a bunch of words on a page, but as you read them, you can decipher what the author is trying to convey, they become sounds in your mind that turn into meaningful sentences which then convert into thoughts and emotions. While one can choose to read on any subject, we will confine ourselves to the area of stock markets and see how a habit of reading can contribute to more success in the sphere. Let’s look at some benefits of reading as a habit.
First up, reading improves concentration. You learn to focus your brain on the words in front of you and thus keep away the rest of the thoughts. This can greatly help improve the power to focus as you have learnt it in one area and will be able to apply it another. Playing a game requires focus. The stock market game also can be played with much greater focus that can then lead to success.
Secondly, with reading comes knowledge. With knowledge comes confidence. With confidence come better action. With better action comes better results. There are tomes and tomes on market analysis both technical and fundamental, market psychology, new age technology as applied to markets etc. etc. Seek those out and keep yourself updated.
Thirdly, reading about successful people can create inspirations in your own life. An inspired man is one who can exercise better judgement, take better decisions leading to an overall improvement in his life. Reading books like Market Wizards by Jack Schwaeger for example can be a great source of inspiration, giving one a greater direction on how to trade and invest in the market successfully.
Fourthly, reading is like gymming: it exercises your brain. It makes you more intelligent. A book like
7 Habits of Successful People (Stephen Covey) gives you a kind of to-do list to improve your life. You can then go ahead to make your own 7 habits to a better trader and improve your market life!
Fifth, a good book makes you feel the experience of its protagonists! Reading something like
The Disciplined Trader or
Trading in the Zone (both by Mark Douglas) can make you see yourself in the words written by the author. The eye in your mind creates those images within you and when deficiencies are pointed out by the author, you can take steps to change them or alter them, thus making you a better person.
Sixth, reading improves your vocabulary, makes you a far better communicator. You can probably get into alternate professions of the market becoming a commentator, a writing analyst or some such vocation that can be quite lucrative too. To do all these well the basic requirement is to be a good reader.
Seven, reading makes your smarter. Most of us think we know most of what we need to know. That may be true in some cases but in many others it is not. A habit of reading awakens your neurons to a higher level of activity and enables them to interact better. This enables you to really know what you know. My son often chastises me for wasting time reading some books on basic technical analysis etc.
He feels I already know more than what the book says. However, even if that fact were to be true, I still need to charge up those neurons so that I can truly know what I know. Books help with that.
Eight, it has been scientifically proven that reading reduces stress. A Sussex University study shows that reading may lower pressure by as much as 68%. Reading spiritual texts can lower blood pressure and bring about calmness. The markets are high pressure environment and making and losing money is a high stress inducing activity. We need something to calm ourselves down and for that books are the cheapest and simplest way. A reading trader is always a better trader.
Nine, playing the market is a peak-performance event. Every single day. There is no respite to this. Hence one needs to be fit and able to deal with markets if one aims to be successful. One of the prime requirements in that is to have some sound and adequate sleep. Reading just 10 minutes can give you the kind of relaxation that helps you get a good night of sleep!
Ten, finally, a word about re-reading. You can read the same book at two different times and get a completely different takeaway after reading. The book didn’t automatically get better, and you probably didn’t become more patient. Instead, you are at specific (and different) stage in life at specific points of our life. The meaning that we derive out of the book at that point of time will be quite different from when you read it earlier.
To keep renewing yourself to suit your current point of life is an imperative to-do for success in the market. The dynamic and constantly changing of the market creates many changes in you too, over time. Old classics have truth in them that transcends time. Re-reading those classics at different points of time will lend a new meaning to your life.
Find the time to read. It is one of the greatest compounding factors of your life!
