On money matters, it is safe to say that most people don’t know what they are talking about, especially when it comes to investment markets. Most brokers would rather fake knowledge of finance and look stupid in the investment world.Corporate terminologies such as “investment genius” don’t mean much once you start to dig deeper. According to investment folklore, people who love money become speculators not investors. The fuzzy logic of the investment world makes both experts and amateurs invest on the basis of psychological emotions and ignorance rather than on common sense. The fundamental question is, “What does it mean to be a genius when it comes to money?” Is Bill Gates an investment genius because he is worth over USD 68 billion and is one of the richest persons on planet earth? The financial jury is still out.
In no other financial market is the term “genius” misused more than on Wall Street where lucky speculators would like to pass for financial geniuses. Any money manager on a sustained hot streak is likely to be called an investment genius.
However long an investor outperforms the market, there will almost always be a subsequent reversion to the “mean,” a falling back to the less successful crowd, which suggests that randomness plays a disproportionate part in the hard-to-measure financial performance in the market place. It is nearly impossible to pinpoint an investment genius with sustainable success over a long period. Furthermore, it is also hard to differentiate the “skilful” investor from the “lucky” one. This assessment has been confirmed by many academic studies which show that an above-average investment performance is both unpredictable and unsustainable.
Who is a genuine genius? In 1790, the German philosopher, Immanuel Kant, described genius as, “the talent for producing that for which no definite rule can be formulated.” He added that for any thought or act to even be considered genius, it has to be both original and exemplary. By original, he meant that nobody else in the same field had come up with the same idea or design. Exemplary meant it was not just useful but, also, worthy of imitation and admiration. It had artistic value. It is nearly impossible to find the level of brilliance which can be appropriately called “genius.” For those who live in the world of infinite intelligence, a genius is a person who has discovered how to increase the frequency of vibrations of thought to a point where he can freely communicate with other sources of knowledge, i.e. the faculty of the sixth sense which is not available by ordinary rates of thought vibrations. The sixth sense is the faculty of creative imagination which normally leads to creative innovations.
What does Kant’s definition tell us about the people in today’s investment world who are most often pegged as geniuses? Indeed, to decide who is to be called a genius in matters of money, especially in the investment market place, we need first to understand what is exemplary and original in the financial markets. In the present financial arena, the terms “original” and “exemplary” have no universal definitions making it even more difficult to pick a genius from a bunch of temporarily successful investors and speculators.
Warren Buffet is a protégé of Benjamin Graham who authored the book, Security Analysis. Graham believes that too much of what passes for investing magic is actually speculation and gambling in financial markets. Warren Buffett, like his mentor Benjamin Graham, believes that the key to stock-picking resides in an understanding that each share of a company is something more than merely a bet on a share price. Rather, it is an ownership stake in an actual business. Buffett’s genius resides in his willingness to ignore short-term share price changes in order to focus on deeper measures of value. It takes a genius to distil investment realities from a cloud of investment illusions and to maintain sustainable success in the investment markets. He is a value-investor driven by character rather than intelligence. Buffet is more interested in avoiding risk than are most investors and speculators. He states that the basic precept of investment is, ”Make most, while risking least.”
In the financial world, a genius might be described as a person whose investment strategy shows the existence of a deeper logic and insight beyond the market fundamentals and consistently maintains above-average returns. But deep logic and insight are rarely measurable. We might never know what is happening in the dazzling mind of a genius but we can see the extraordinary outcomes from his/her brilliance. Science intimates geniuses may be born as such, but they also need to be nurtured for their brilliance to emerge. Warren Buffet was born an ordinary brilliant human but nurtured himself into a financial genius. He maintains a brilliant investment mind together with ordinary human characteristics. Simplicity remains the common denominator in his investment world as well as in his social space. Warren Buffet sits at the crème de la crème of financial nobilities where he is the natural leader. In business as well as social space, Warren Buffet has stuck to the old human values of integrity, discipline and humility. He looks downrightly pained when receiving a compliment. For him, successful investing and giving to society are natural occurrences on the roadmap to human prosperity.
Not everybody can be a genius, but no one could be one if he isn’t willing to put in the hours and a very specific kind of effort. There is no road except effort which leads to the genius world. Warren Buffett’s journey in the investment world tells the whole story. Buffett famously made an immense, almost USD 60 billion, fortune by investing in stocks, starting with the Berkshire Hathaway textile company in 1962 and moving on to The Washington Post, ABC and Coca-Cola to mention just a few of his major investments over the years. What makes Warren Buffett investment genius is the longevity of his success. In Warren Buffett, one sees the convergence of the competitiveness of financial wisdom and investment foresight which makes him a winner in the financial market place in good times and in bad.
In the end, the mind of an investment genius may be unknowable, but at least, we can check his investment profile for extraordinary results. Numbers can help us gauge the scale of a genius although not conclusively, because there is no benchmark for a real genius. Warren Buffet might historically pass as the best investor ever because, in the end, genius is eternal. To find a financial genius, you have to look beyond the largest bank account into the human character and personality behind his genius. Investing is most intelligent when one has an independent mind like Warren Buffett. He has made investment a calling, not a job. Warren Buffett is a man of spontaneous honesty. He has never tried to pretend to be what he is not. To put it simply, Warren Buffet acts like Warren Buffett. He is the rock of investment wisdom in the global arena.
At the age 83, Warren Buffett, better known as ”the Oracle of Omaha,” is still the foremost investor in the world. When he speaks, the whole world listens. His audience includes presidents, prime ministers, Noble Prize winners, CEO’s of Fortune 500 companies, and countless investment experts and fans. He does not love money. According to him, money is an instrument for doing business and for giving.
Warren Buffett looks rather ordinary in the financial world where everybody seeks to be a financial celebrity, and appearing ordinary is the character of a wise investor and a genius. Insightfully, a genius is somebody whose professional or intellectual output or endeavour shows the existence of a rich and deep inner life. He has perfected the art of investing by liberating his mental energy by means of investing. He has never boasted about himself as an investment genius. In the public space, he has turned out to be admired as a beloved uncle who happens to be a genius.
The power of a single person can be so profound, and nowhere is that more true and relevant than in investing. Warren Buffet has built one of the world’s most successful companies and is also known to be great boss. He may be one of the few executives to accomplish such a feat. In acquiring the dozens of companies that make up his USD 315 billion Berkshire Hathaway, Buffet has never contaminated his hands much with the cost-cutting strategies, lay offs and management shake-ups that often follow the acquisitions of other investors.
Warren Buffet is an incredible blend of extraordinary intellect and business acumen supplemented by imbedded ability to emotionally engage with people at their own levels with integrity and simplicity. He distils the essence of investment from the matrix of investments illusions in the financial markets. Perhaps the best news is that Buffett focuses on both business and philanthropy. When we think of successful investors, Warren Buffett is probably the first person who comes to mind. He dispenses investment wisdom with the precision of a brain surgeon. He is to investing what Albert Einstein is to science or Mother Teresa is to the service of humanity.