It’s been a few months since the Berkshire Hathaway Annual General Meeting (AGM) drew to a close, but even today, I find myself reflecting on the invaluable lessons shared by some of the world’s most brilliant investors.

It was an honour to learn from these individuals whose wisdom and generosity continue to shape my journey as an investor. Among the many insights I gathered, one conversation stood out: my chat with Mohnish Pabrai.

Pabrai, an esteemed investor in his own right, offered a simple yet profound piece of advice that encapsulates the essence of Warren Buffett and Charlie Munger’s success —

“Circle of competence grows very slowly. Be patient about it.”

This statement might seem obvious, but its implications are vast and far-reaching, especially in today’s fast-paced investment environment.

The circle of competence: A deliberate and gradual expansion

Pabrai’s emphasis on the circle of competence is a reminder that mastery in investing doesn’t happen overnight. He pointed out that Buffett and Munger didn’t rush into investing in Coca-Cola. In fact, it wasn’t until after 16 years of experience with See’s Candies—a company they bought in 1972—that they truly understood the power of a brand and a consumer monopoly. This understanding didn’t come from a quick study or a sudden insight; it was the result of years of observation, learning, and deep immersion in their circle of competence.

The idea of a circle of competence is not new. Buffett himself has spoken about it extensively, urging investors to stick to what they know and to be cautious about venturing into unfamiliar territories. However, what Pabrai highlighted was the patience required to expand this circle. It doesn’t grow rapidly; rather, it expands slowly, as one accumulates knowledge and experience over time.

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The power of patience in a fast-paced world

In an era where speed is often equated with success, the idea of being patient can feel counterintuitive. We live in a world that celebrates quick wins and instant gratification, where the pressure to make fast investment decisions can be overwhelming. The temptation to chase after the latest trends, to dive into industries we barely understand, and to expect immediate returns is ever-present.

Yet, as Pabrai reminded me, true understanding cannot be rushed. Buffett and Munger’s decision to invest heavily in Coca-Cola, a position that eventually occupied a quarter of Berkshire Hathaway’s entire book value, was not made in haste. It was the result of years of patient observation, during which they built a deep conviction in the company’s long-term potential.

The same principle applied when Buffett invested in Apple—a move that came after 44 years of careful study and reflection. Despite the time it took, these investments became cornerstones of Berkshire Hathaway’s success, proving that patience is not just a virtue in investing; it is a critical component of long-term success.

Connecting the dots over time

Pabrai’s insights serve as a powerful reminder that investing is a journey, not a race. The desire to move quickly is understandable; we all want to see our investments grow and succeed. But rushing the process often leads to mistakes, misunderstandings, and missed opportunities. Building a strong foundation of knowledge, on the other hand, takes time and effort. It requires a commitment to learning, a willingness to go deep, and the patience to wait for the right opportunities.

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Buffett’s famous analogy — “You can’t produce a baby in one month by getting nine women pregnant” — is a humorous yet poignant illustration of this principle. Some things simply cannot be hurried. The dots that make up the picture of a successful investment strategy will connect eventually, but only if we take the time to understand them fully.

Embracing the slow and steady approach

Reflecting on Pabrai’s advice, I find myself more committed than ever to the idea of slow and steady progress. As investors, we must resist the urge to rush into decisions. Instead, we should focus on gradually expanding our circle of competence, learning from our experiences, and patiently waiting for the right moments to act.

The rewards for this approach are clear. Buffett and Munger’s success is not just a result of their intelligence or insight, but of their patience and persistence. They understood that great investments are built on a foundation of deep knowledge and strong conviction—both of which take time to develop.

As I continue on my own investment journey, I carry with me the lessons from this year’s Berkshire Hathaway AGM, particularly the wisdom shared by Pabrai. His reminder to be patient, to go slow, and to trust in the process of building a circle of competence has reinforced my belief that true success in investing is not about speed, but about depth and endurance.

So, the next time I find myself tempted to rush into a decision, I’ll remember Pabrai’s words and the example set by Buffett and Munger. After all, in the world of investing, it’s not about how fast you get there, but how well-prepared you are when you do.

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