Scott Adams, creator of the wildly successful comic strip Dilbert, is a man of big ideas. Some of them are fantastic, some of them are questionable, a few of them may be literally insane. However, for all his eccentricity it’s hard to argue with results: over the past three decades Adams has managed to parlay his workplace doodles into a multi-million dollar franchise.
Among his many ideas, there’s one in particular that he credits his success to: he doesn’t believe in setting goals for himself. Instead, he believes in building systems to work towards what he wants. The idea is simple. Most peoples’ goals depend on factors outside their direct control, which leads to frustration. By focusing on what you’re doing to manage those goals, though, you can build a system or framework for trying to achieve what you want. This way, you’re only concerned about the things that you control yourself, rather than worrying about goals that are outside your immediate reach.
For example, suppose a freshly minted high school graduate wants to be a doctor. That goal will take an enormous amount of dedication and training, and no amount of passion or talent is going to replace that. At any given moment, they’re an entire decade away from reaching their goal—it will take them five years of school before they even reach a point with any kind of real hands-on training. When faced with such a distant goal it’s easy to despair of ever reaching it. But while they can’t just up and be a doctor, they can always work on their system for trying to become a doctor. By focusing on their immediate day to day studies instead of their long-term goal, every day is a success. They simply use their system.
We think this makes great life advice in general, but it’s particularly important when it comes to investing. Our goal is to grow our portfolio over time, but what the market does day to day is entirely beyond our control: we can’t force our portfolio to go up. What we can always do, though, is work our system. In our case, this means practicing our three core principles: avoid stampedes in the market, look for the biggest bargains we can find, and own the orchard for the fruit crop. We can’t push a button and make your portfolio grow. But we can practice our investing discipline every day, even when the markets don’t cooperate.