By: Tim Melvin
Warren Buffett and Charlie Munger have commented many times in the past about the need to read widely and often to achieve investment success. "I have said that in my whole life, I have known no wise person over a broad subject matter area who didn't read all the time -- none, zero," Munger commented at the 2003 Berkshire Hathaway (NYSE: BRK-B) annual meeting.
"Now I know all kinds of shrewd people who by staying within a narrow area can do very well without reading," he added, "but investment is a broad area. So if you think you're going to be good at it and not read all the time, you have a different idea than I do. . . . You'd be amazed at how much Warren reads. You'd be amazed at how much I read."
When Warren was asked by an interviewer how he achieved success he held up a sheaf of papers and commented, "Read 500 pages like this every day. That's how knowledge builds up, like compound interest." This is an underappreciated talent in today's investing world. We flock to seminars and meetings to learn how to pick stocks and analyze markets using charts and pictures, without developing the knowledge of what is driving the price moves.
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