Last week we focused on focus. This week we’ll try simplifying simplicity.
Albert Einstein believed the five ascending levels of intellect were,
“Smart, Intelligent, Brilliant, Genius, and Simple.”
Another way I’ve heard it put is that there is simplicity on the other side of complexity. Simplicity is not some naïve understanding, but rather a nuanced viewpoint, fully informed.
As physicist, Richard Feynman claimed,
“If you can’t simply explain something, you don’t understand it.”
That’s why he was famous for the Feynman technique. It’s simple but not easy.
First, learn a difficult concept.
Second, find a 3rd grader (or younger).
Third, try to explain it to them.
Fourth, if you get stuck, learn more about your concept until the kid understands.
The beauty of this technique is that we can’t use big words to gloss over complicated issues. Often, when someone needs to resort to big words, that means they don’t understand the idea fluently.
But my all-time favorite illustration of simplicity is the following story:
An American investment banker was taking a vacation in a small coastal village in Mexico when a small boat with a Mexican fisherman docked. The boat had several large, fresh fish in it.
The banker was impressed by the quality of the fish and asked the fisherman how long it took to catch them.
The fisherman replied, “Only a little while.” The banker then asked why he didn’t stay out longer and catch more fish. The fisherman replied that he had enough to support his family’s immediate needs.
The banker then asked, “But what do you do with the rest of your time?” The fisherman replied, “I sleep late, fish a little, play with my children, take siesta with my wife, stroll into the village each evening, where I sip wine and play guitar with my amigos. I have a full and busy life, señor.”
The banker scoffed, “I am an Ivy League MBA, and I could help you. You could spend more time fishing and, with the proceeds, buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, until eventually you would have a whole fleet of fishing boats. Instead of selling your catch to the middleman, you could sell directly to the processor, eventually opening your own cannery. You could control the product, processing, and distribution.”
Then he added, “Of course, you would need to leave this small coastal fishing village and move to Mexico City, where you would run your growing enterprise.”
The fisherman asked, “But señor, how long will this all take?”
To which the banker replied, “Fifteen to twenty years.”
“But what then?” asked the fisherman.
The banker laughed and said, “That’s the best part. When the time is right, you would announce an IPO and sell your company stock to the public and become very rich. You could make millions.”
The fisherman asked, “Millions, señor? Then what?”
To which the banker replied, “Then you would retire. You could move to a small coastal fishing village, where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings, where you could sip wine and play your guitar with your amigos.”
Our imaginary fisherman was not “informed” but this example does a great job informing us to the power of simplicity. Most of the time, true contentment is beautifully simple.
The same goes for investing.
Step 1: Buy great businesses
Step 2: Hold them for as long as possible before finding a better opportunity
While there’s a lot that goes into this two-step process, we need to remember the simplicity of it.
I’ll leave you with this image. Apparently Gene Simmons got a new tattoo.