What would you do if you were 23 years old again, Mr. Buffett?

Go into the Investment business!

"This year, a young shareholder from New Jersey asked for advice on entrepreneurship. Below are my notes on the shareholder's question, along with responses from Buffett and Munger.

Shareholder: Being a young person without an ability to code or build robots, I don't know technology. If you were 23 years old, what non-tech industry would you start a business in?

Buffett: I'd probably do just what I did at 23. I would go into the investment business and I would look at lots of companies, talk to lots of people, and learn what I could about different industries. One thing I did when I was 23: If I got interested in a coal business, I'd go and see the bosses of eight or 10 coal companies. I'd ask a lot of questions.

One question I would always ask: If they had to put all their money in a company in the industry and go away for 10 years, which would it be? And if they had to sell short under the same conditions, which company would it be, and why? And if I talked to everyone in the industry like that, I would know more about the industry than anybody.

There's lots of ways to learn about the economic characteristics of companies, such as reading, personal contact, etc. ... But you need a real curiosity about it. It really has to turn you on. And what could turn you on more than asking questions about, for instance, coal companies? [Laughs] And in my case, the insurance industry was particularly interesting, and perhaps you could become well equipped to run such a business some day. If you just keep learning things, something will come along that will be very useful. But you have to be open to it.

Munger: Try the trick that Larry Bird used when he wanted a new contract. He asked all agents what agent he should hire if he didn't hire that agent, and when they all came up with the same second choice, he went with that second choice.

Buffett: We did the same thing for Salomon. I called in eight or 10 of the managers. We had to open for business, and I had to have someone to run the place. I said, "Who besides you would be ideal, and why?" And one guy told me no one could compare to him. He was gone within a few months [laughs], but it's not a bad system to use. You could really learn a lot just by asking. Sounds like a Yogi Berra quote, but it's true. People like to talk. You just have to be open to it, and you will find your spot. You may not find it the first day of the week, but you'll find what fascinates you. I found it when I was 7 or 8. Sometimes it'll take a while, but you'll find it.

Munger: It's a very competitive business. When I was at Cal Tech and studied thermodynamics, there was a guy who was tremendously talented at thermodynamics. I realized that I'd never be as smart as him in that field. I tried other industries with the same results, so I just kept doing that until I ended up here.

Buffett: I had a similar experience with athletics."

Read more: http://www.fool.com/investing/general/2014/05/25/what-would-warren-buffett-do-if-he-was-23-years-ol.aspx#ixzz32rVwz2Px

Value Makeover

http://blogs.wsj.com/moneybeat/2014/05/23/giving-yourself-an-investing-makeover/

This is a wonderful piece. Most of the value lessons are free, but the hard part to walk the walk.

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If you set out deliberately and systematically to remake yourself into a great investor, how would you go about it?

That is what the money manager Guy Spier has spent much of the past 17 years trying to figure out. He believes that most investors pay attention to the wrong things and allow their minds to get hijacked by bad ideas.

So Mr. Spier has set about purifying the environment in which he makes investing decisions — changing his work space, altering the information he uses and, above all, continually trying to counteract his own irrationality. What he calls his “journey” is a transformation any individual investor should be able to emulate — perhaps even better, he says.

That journey accelerated in 2008, after Mr. Spier and his friend, fund manager Mohnish Pabrai, donated $650,100 to a charity and won a private lunch with Warren Buffett. After listening to Mr. Buffett, Mr. Spier says, he realized “I’ve got to hit the reset button and make drastic changes.”

Mr. Spier, 48 years old, is worth listening to. A graduate of Oxford University and Harvard Business School, he runs the Aquamarine Fund, a $180 million partnership specializing in cheap “value” stocks. Since its launch in September 1997, the fund has beaten the S&P 500 by an average of 4.9 percentage points annually, net of fees.

In a book to be published in September by Palgrave Macmillan, “The Education of a Value Investor,” Mr. Spier describes his struggle to improve his decision-making hygiene. (A disclosure: A friend and former editor of mine, William Green, collaborated on the book.)

Seldom has a successful money manager so painfully flagellated himself in public. In the book, Mr. Spier calls himself “blind,” “dumb,” “spectacularly foolish,” “misguided,” “stumbling,” “wrong,” “vulnerable” and, over and over again, “irrational.”

“I’m not living a real life if I’m not naming this stuff,” Mr. Spier told me this past week. “I hope that will help make me a better person, but I’m certain it makes me a better investor.” (He has beaten the S&P 500 by 5.5 points annually since 2008, although there is no way to know how much his reinvention has affected his returns.)

“We think we control our environment, but in fact it’s our environment that controls us,” Mr. Spier told me. “We can’t change the world. The only thing we can change is ourselves, by trying to get a better understanding of our own messed-up wiring.”

For 18 months, Mr. Spier listened to nothing in his car but a lecture on human misjudgment by Charles Munger, Mr. Buffett’s vice chairman at Berkshire Hathaway. Of the two dozen mental mistakes cited by Mr. Munger, “I realized I was guilty of all of them,” Mr. Spier says.

No wonder he has sought, as he says in his book, “to banish the false assumption that I am truly capable of rational thought.” Once he accepted “just how flawed my brain really is,” he writes, “I could design an array of practical work-arounds based on my awareness of the minefield within my mind.”

To escape what he calls “the New York vortex” of bad influences such as envy, greed and hyperactive trading, Mr. Spier moved his fund to Zurich in 2008.

Worried that knowing the prices of his holdings would make him want to trade them, he checks their market values once a week at most and leaves his firm’s only data terminal switched off for weeks at a time. Mr. Spier avoids speaking to brokers; he puts in his trading orders by email, after market hours, so no broker can try swaying his judgment.

Nor does Mr. Spier publicly discuss the holdings in his portfolio—even in his letters to his own investors, where he writes instead about the lessons he has learned from the positions he has sold. He is afraid that talking about a stock will make it harder for him to be objective about it.

Mr. Spier has divided his office into two spaces—a “busy room,” with his phone and computer, and the “library,” a quiet area down the hall where no one, including Mr. Spier, enters with an electronic device. He likes to spend much of the day there, reading and thinking.

When researching a company, Mr. Spier has a strict routine. First he reads its official financial filings—annual and quarterly reports, proxy statements and so on. Next he reads news releases and conference-call transcripts. Only then will he allow himself a peek at online commentary, news coverage or Wall Street research. That way, his first impressions come from primary sources.

Individual investors are constantly being exhorted to try beating Wall Street at its own game of trading like crazy to chase whatever is hot. But why should you bother trying to play a game that even most professional players can’t win?

Instead, take a page from Mr. Spier’s book and play by your own rules. The faster Wall Street runs, the more you should slow down and step back from that madness. Buy and hold an index fund forever, or study a few stocks with all the peace of mind you can muster.

That way, you exploit the true advantages of individual investors that most professionals would kill to have: patience, independence and the ability to ignore the braying of the crowd.

Patience

Ben Graham observed and Warren Buffett repeated, "The stock market has a very efficient way of transferring wealth from the impatient to the patient." 

Patience is the virtue an investor needs.

here is another article elaborate on the same theme:

http://www.fool.com/investing/general/2014/05/06/where-outperformance-comes-from.aspx

"There's a saying that there's always someone on the other side of your trade, and that someone may know more than you. I thought of this last week while reading the biography of Joseph Kennedy.

Kennedy's wealth came from a mix of genius and a sheer lack of morals. Take this story: The repeal of prohibition in 1933 was bound to benefit companies that made supplies needed to make alcohol. One was a bottling company called Owens-Illinois. Rather than investing in directly in Owens-Illinois, Kennedy purchased shares of a company called Libbey-Owens-Ford. "Libbey-Owens-Ford was an entirely separate company, which manufactured plate glass for automobiles, not bottles, but its name was close enough to the bottle glass company to fool unwary investors," writes biographer David Nasaw. On news of the repeal, Kennedy and his partners traded shares back and forth between each other, pumping up trading volume to draw attention. That caused other investors to buy shares "on the mistaken belief that they were buying shares of Owens-Illinois, the bottle manufacturer." After a surge, Kennedy dumped Libbey-Owens-Ford with a $1 million inflation-adjusted profit and invested the proceeds in his original target, Owens-Illinois.

Almost half of Gen Yers -- those between age 20 and 32 -- say they "will never feel comfortable investing in the stock market," according to a 2012 study by MFS Investment management. They use words like "casino," "crapshoot," and "rigged" to describe the market. They know someone is on the other side of each trade, and that someone -- like Kennedy -- may know more than them.

But there's something every mom-and-pop investor can do to gain an edge on the person on the other side of the trade: be willing to wait longer.

That's it. There are few things more powerful in investing than the realization that the biggest gains tend to accrue to the person who waits the longest. If you bought an index fund 20 years ago and checked your account statement for the first time this morning, you could legitimately call yourself one of the top investors of modern history, having outperformed three-quarters of professional fund managers. You can say this only because you were willing to wait longer than everyone else who trades, fidgets, rotates, sells in May and goes away, and make (small-f) fools of themselves while you let compound interest work.

Most outperformance in the stock market doesn't come from Kennedy-like mischief, but instead from something simple called time arbitrage. It's exploiting the gap between your time horizon and mine. If you're worried about the next six months, but I can be patient for the next six years, I have an edge over you. You may sell shares today because you don't want to have another down month, and I'll be happy to buy them from you to focus on my up decade. That's all time arbitrage is. With a diversified portfolio, anyone can do it, because patience doesn't require inside information, fancy math models, or high-frequency trading algorithms. All you have to do is wait. It works best with an indifference to short-term volatility that borders on obliviousness.

Companies didn't report much information in the 1930s, but archive documents show Libbey-Owens-Ford earned somewhere around $1.1 million in profit in 1933. By 1985, profits were more than $70 million. Getting tricked by Kennedy didn't matter much if you were willing to wait."

The most important trend

Demographics drives everything.   The most important trend for the next few decades is the aging of the society:  there will be much more old people and their behaviors drive economic and political trends.

here is an article from the blog Fivethirtyeight:

http://fivethirtyeight.com/features/what-baby-boomers-retirement-means-for-the-u-s-economy/

US:

World: