Recently, I came across a short quote from one of Warren Buffett's old shareholder letters, as part of the process of updating my free e-book Warren Buffett Predicts the Future, which you can download here.
It's stuck with me ever since, and what's funny is that the 13-word quote isn't even Buffett's; instead, he's sharing the advice of a 19th-century French philosopher.
Don't let that drive you away, however. There's nothing academic or anachronistic about it. In fact, all these years later, it's one of the more universal and apt things I've come across.
It comes up in the 1985 Berkshire Hathaway shareholder letter, dated March 4, 1986, in which Buffett explained his decision, finally, to abandon Berkshire's failing textile businesses, which he admits he'd kept going despite every indication that they wouldn't work.
The quote is from the French philosopher Auguste Comte, who lived from 1798 to 1857, and who is credited with developing the field of sociology and positivism. I don't have the space -- or frankly the foundation -- to explore Comte's work here, so let's just go to the quote.
Buffett acknowledges that other textile businesses in the U.S. had been closing at a fast clip in the years leading to his decision, and then admits:
Their owners were not privy to any information that was unknown to me; they simply processed it more objectively. I ignored Comte's advice - "the intellect should be the servant of the heart, but not its slave" -- and believed what I preferred to believe.
I've written before about Buffett's propensity to admit errors, but these 13 words leap out, even now, 163 years after Comte's death, and 36 years after Buffett and Berkshire wound down the company's textile operation.
The more I've thought about them, the more I realize they succinctly summarize one of the key reasons why so many people get on the wrong life path, or pursue the wrong career, or simply make bad strategic decisions.
They're the literal opposite of the well-meaning but dead wrong advice that so many give: in short, "follow your passion."
Granted, there's been some revisionism of that lately, as people recognize that it actually makes more sense to explore things that might work in practice, and then find the ones among them that can inspire your passion.
This more strategic course of action doesn't mean you should never meander, or don't explore, of course.
I think a non-Buffett example will make it clear. This is from the 2005 speech that the late Steve Jobs gave at Stanford University, in which he recounted his experience of dropping out of college, and then auditing classes that interested him, for free.
What interested him? Calligraphy, for one thing, so he studied it. As he explained:
It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating. None of this had even a hope of any practical application in my life. But 10 years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac.
Now, Buffett wasn't driven by a passion for textiles the way Jobs apparently got into calligraphy and typography long before he found a practical application for them.
However, it does seem that Buffett's "intellect" was "the slave of his heart" for 20 years, because he permitted other emotions and passions to prevent him from seeing the truth.
These passions included some things that people might find laudable -- for example, a desire to keep the failing textile businesses going as long as possible, because they employed so many older workers who didn't have transferrable skills.
But, they also included others, like the emotional reaction that led Buffett to buy Berkshire Hathaway to begin with, which had to do with a perceived slight from the company's former CEO (and Buffett's desire to control Berkshire in order to fire him).
Buffett has a reputation for being something of a quote machine, so I found it interesting that in this instance he stretched back 150 years to a philosopher I'll bet many or most of his readers had never heard of in order to express what he thought.
Yet I suspect it's one of the more obviously transferrable among his witticisms if you're running a business that might be a little bit smaller than Berkshire:
Namely, to what extent might you be allowing emotion, rather than passion to succeed, to dictate business choices?
We all do it sometimes; heck, the entire point of this exercise is that it took the so-called Oracle of Omaha 20 years to figure it out in this instance. But just because a miscalculation is common doesn't mean it's not worth reexamining -- even many years later.
Don't forget the free e-book: Warren Buffett Predicts the Future.