Faith, Not Dogma

Question: How many times has the guy who literally wrote the books on valuing businesses that everybody else at every other college studies to learn valuation techniques been in the big room with Warren Buffett at a Berkshire Hathaway Annual meeting?

Answer: Zero

Question 2: Why…?

Answer 2: Faith is important, dogma is dangerous.

Aswath Damodaran told us, in this Excess Returns interview, that the people who identify the most with Warren Buffett’s very famous methods of investing sometimes take it too far. They think “there’s only one way” and they get critical of anybody who doesn’t do things “the one true way.”

Now, Warren Buffett doesn’t operate like that, and I know a ton of people who go to the annual meeting who don’t either but really think about his point.

What would the upside of attending the Berkshire Annual meeting be for Aswath?

What would he learn? What would he take away from it?

(I’d really like to know if you have thoughts, I’m sure some of you will)

More importantly though, what things in all of our lives - where we dedicate a ton of our time, energy, and passion to a craft, could we diversify our life to make sure our identity isn’t getting too narrow?

This is the core of what Prof. Damodaran is doing. By deliberately staying out of the meetings, he’s deliberately demonstrating he’s not a member of that church, or any church, and celebrating his independence.

Faith is the complete belief or trust in something.

Dogma is a set of principles laid down by an authority as an incontrovertible truth.

It’s the way an investor survives.

Or, as Camille Paglia put it,

My advice, as in everything, is to read widely and think for yourself. We need more dissent and less dogma.

I think Prof. Damodaran would overall agree with that quote. More dissent, less dogma. But, I also like to think he’d add, keep the faith alive too.

This was much more than an investment conversation (and thanks to everyone who watched, this was by far one of the most popular interviews I’ve contributed to yet!):