Patience

...excerpt from Mo Lidsky's latest book, Partners in Preservation

There is no better sport of patience than baseball. Warren Buffett is often quoted on his advice to “wait for a fat pitch,” meaning that you should avoid pitches (i.e., oppor

tunities) that aren’t coming down the middle of the plate and thus positioned as well as possible for success. Buffett famously used this quote in Berkshire Hathaway’s 1997 annual report in reference to legendary Hall of Famer Ted Williams.

Williams was one of the greatest hitters in the history of major league baseball, and Buffett claimed that what contributed to Williams’s success was his understanding of the sweet spot. Williams apparently broke down the strike zone into seventy-seven different baseball-sized cells. He figured out that his batting average was much better when pitches came into certain specific cells, and he always tried to bat accordingly. As a result of his research, Williams became a nineteen-time All-Star, two-time MVP and Triple-Crown winner, holding the highest career batting average of anyone in the five-hundred-plus home run club.

In investing, the hardest part is taking the time to identify those seventy-seven cells, familiarizing oneself with the opportunity set, and recognizing how to consistently choose from the best options available.