Byron Wien's 20 Lessons Learned Throughout His Investing Career

Byron Wien is Vice Chairman at Blackstone and prior to that worked at hedge fund Pequot Capital and Morgan Stanley.  Earlier this year, he released an addendum to his usual commentary about lessons he's learned in 80 year investing career.  His words of wisdom are below:


Byron Wien's 20 Lessons Learned


1.  Concentrate on finding a big idea that will make an impact on the people you want to influence.  The Ten Surprises, which I started doing in 1986, has been a defining product.  People all over the world are aware of it and identify me with it.  What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at year-end.  If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.

2.  Network intensely.  Luck plays a big role in life and there is no better way to increase your luck than by knowing as many people as possible.  Nurture your network by sending articles, books and emails to people to show you’re thinking about them.  Write op-eds and thought pieces for major publications.  Organize discussion groups to bring your thoughtful friends together.

3.  When you meet someone new, treat that person as a friend.  Assume he or she is a winner and will become a positive force in your life.  Most people wait for others to prove their value.  Give them the benefit of the doubt from the start.  Occasionally you will be disappointed, but your network will broaden rapidly if you follow this path.

4.  Read all the time.  Don’t just do it because you’re curious about something, read actively.  Have a point of view before you start a book or article and see if what you think is confirmed or refuted by the author.  If you do that, you will read faster and comprehend more.

5.  Get enough sleep.  Seven hours will do until you’re sixty, eight from sixty to seventy, nine thereafter, which might include eight hours at night and a one-hour afternoon nap.

6.  Evolve.  Try to think of your life in phases so you can avoid a burn-out.  Do the numbers crunching in the early phase of your career.  Try developing concepts later on.  Stay at risk throughout the process.

7.  Travel extensively.  Try to get everywhere before you wear out.  Attempt to meet local interesting people where you travel and keep in contact with them throughout your life.  See them when you return to a place.

8.  When meeting someone new, try to find out what formative experience occurred in their lives before they were seventeen.  It is my belief that some important event in everyone’s youth has an influence on everything that occurs afterwards.

9.  On philanthropy my approach is to try to relieve pain rather than spread joy.  Music, theatre and art museums have many affluent supporters, give the best parties and can add to your social luster in a community.  They don’t need you.  Social service, hospitals and educational institutions can make the world a better place and help the disadvantaged make their way toward the American dream.

10.  Younger people are naturally insecure and tend to overplay their accomplishments.  Most people don’t become comfortable with who they are until they’re in their 40’s.  By that time they can underplay their achievements and become a nicer, more likeable person.  Try to get to that point as soon as you can.

11.  Take the time to give those who work for you a pat on the back when they do good work.  Most people are so focused on the next challenge that they fail to thank the people who support them.  It is important to do this.  It motivates and inspires people and encourages them to perform at a higher level.

12.  When someone extends a kindness to you write them a handwritten note, not an e-mail.  Handwritten notes make an impact and are not quickly forgotten.

13.  At the beginning of every year think of ways you can do your job better than you have ever done it before.  Write them down and look at what you have set out for yourself when the year is over.

14.  The hard way is always the right way. Never take shortcuts, except when driving home from the Hamptons.  Short-cuts can be construed as sloppiness, a career killer. 

15.  Don’t try to be better than your competitors, try to be different.  There is always going to be someone smarter than you, but there may not be someone who is more imaginative. 

16.  When seeking a career as you come out of school or making a job change, always take the job that looks like it will be the most enjoyable.  If it pays the most, you’re lucky.  If it doesn’t, take it anyway, I took a severe pay cut to take each of the two best jobs I’ve ever had, and they both turned out to be exceptionally rewarding financially. 

17.  There is a perfect job out there for everyone.  Most people never find it.  Keep looking.  The goal of life is to be a happy person and the right job is essential to that. 

18.  When your children are grown or if you have no children, always find someone younger to mentor.  It is very satisfying to help someone steer through life’s obstacles, and you’ll be surprised at how much you will learn in the process. 

19.  Every year try doing something you have never done before that is totally out of your comfort zone.  It could be running a marathon, attending a conference that interests you on an off-beat subject that will be populated by people very different from your usual circle of associates and friends or traveling to an obscure destination alone.  This will add to the essential process of self-discovery.

20.  Never retire.  If you work forever, you can live forever.  I know there is an abundance of biological evidence against this theory, but I’m going with it anyway.


For more perspective from great investors, head to:

- Warren Buffett & Charlie Munger's secrets to investing success

- Lessons from Stanley Druckenmiller

- Andreas Halvorsen on investment process

- Mohnish Pabrai on checklist investing

- Jeremy Grantham's 10 investment lessons

Jeremy Grantham's 10 Investment Lessons

GMO's Jeremy Grantham is out with a February 2012 letter which he has entitled, "The Longest Quarterly Letter Ever." In it, he outlines 10 investment lessons for individual investors.

Jeremy Grantham's 10 Investment Lessons:


1. Believe in history: "history repeats and repeats, and forget it at your peril. All bubbles break, all investment frenzies pass away."

2. Neither a lender nor a borrower be: "Unleveraged portfolios cannot be stopped out, leveraged portfolios can. Leverage reduces the investor's critical asset: patience."

3. Don't put all your treasure in one boat: "This is about as obvious as any investment advice could be ... Several different investments, the more the merrier, will give your portfolio resilience, the ability to withstand shocks."

4. Be patient and focus on the long term: Wait for the good cards. If you've waited and waited some more until finally a very cheap market appears, this will be your margin of safety."

5. Recognize your advantages over the professionals: "The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals."

6. Try to contain natural optimism: "optimism comes with a downside, especially for investors: optimists don't like to hear bad news."

7. But on rare occasions, try hard to be brave: "You can make bigger bets than professionals can when extreme opportunities present themselves because, for them, the biggest risk that comes from temporary setbacks - extreme loss of clients and business - does not exist for you."

8. Resist the crowd, cherish numbers only: "this is the hardest advice to take: the enthusiasm of a crowd is hard to resist. The best way to resist is to do your own simple measurements of value, or find a reliable source (and check their calculations from time to time) ... and try to ignore everything else."

9. In the end it's quite simple, really: "GMO predicts asset class returns in a simple and apparently robust way: we assume profit margins and price earnings ratios will move back to long-term average in 7 years from whatever level they are today. We have done this since 1994 and have completed 40 quarterly forecasts ... Well, we have won all 40."

10. This above all, to thine own self be true: "To be at all effective investing as an individual, it is utterly imperative that you know your limitations as well as your strengths and weaknesses ... you must know your pain and patience thresholds accurately and not play over your head. If you cannot resist temptation, you absolutely must not manage your own money."



Grantham elaborates on each lesson and address other topics in his full quarterly letter, embedded below:



For more insight and market commentary, be sure to also check out Howard Marks' latest letter, as well as Eric Sprott's commentary.