Buffett's Oracle? Baltasar Gracián (1601-1658)

 “What the wise man does at the beginning, the fool does in the end.”

A typically pithy encapsulation of worldly wisdom from Warren Buffett – except it’s not one of Buffett’s own, but a quotation from Baltasar Gracián, a 17^th Century Spanish author whose key text The Oracle (1647) is worth exploring for wisdom about life, and thence investing.

I first heard of Gracián from an unlikely source: a quotation uttered by Inspector Frank Haskins in an episode of the classic 1970s British police series The Sweeney, the repeats of which I view avidly, having been too young to watch the programme when first broadcast.

Curious to discover Gracián, a local public library fetched a musty 1962 edition of The Oracle from the reserve stacks.

I’d not expected the book, 300 maxims of instruction for everyday life, profoundly influenced by Gracián’s Jesuit outlook, to resonate with the practice of investing. Yet the more I read, the more I wondered if the work as a whole might be a hitherto largely unrecognised influence on Warren Buffett, and perhaps Charlie Munger, as there were many jolts of recognition as I worked my way through the text. Tellingly, the literal translation of the book’s full title is A Manual in the Art of Prudence, and the book has been translated as The Art of Worldly Wisdom.

Without further comment I have reproduced extracts from ten of the maxims below, numbers and text based on the ‘Everyman Edition’, translated into English by L.B. Walton.

As William Green's insightful recent book, Richer, Wiser, Happier, makes clear through his interviews with some of the world's greatest investors, temperament is at least as important as technique in securing investment success.

Anachronistic though many of them are, Gracián's maxims are a rich source of wisdom for life, as well as investing.

 - “Mix with those from whom you can learn. Let friendly intercourse be a school of erudition, and company be a means of acquiring culture; make teachers of your friends and combine the advantages of learning with the delights of social intercourse.” [11]

- “The man with a well-stocked mind. The armoury of the discreet is polite, tasteful learning: a practical knowledge of all current affairs of an expert rather than a vulgar kind; the possession of a store of spicy witticisms and an abundance of gallant deeds upon which to know how to draw on the right occasion.” [22]

- “To know how to abandon the game when their luck is in is characteristic of famous gamblers. A good retreat is as important as a spirited attack; it safeguards your achievements when they are adequate as well as when they are numerous (…) Fortune soon tires of carrying one too long upon her shoulders.” [38]

 - “The judicious and observant man. He masters things, not they him. He at once plumbs the profoundest depth; he knows perfectly well how to anatomize a man’s capacities. He understands and sums up a person’s essential nature as soon as he sees him. Through his rare powers of observation, he is a great unraveller of the innermost secrets of the heart. He observes keenly, understands subtly, and infers wisely: he discovers, notices, grasps, and understands everything.” [49]

- “The man who knows how to wait. (…) First master yourself and, later, you will master others. You must traverse the domains of time to reach the goal of opportunity (…) ‘Time and I against any two others’ is a fine saying. Fortune herself rewards those who wait with a magnificent prize.” [55]

- “Have a double store of the necessities of life (…) let it be a fundamental rule of the art of living to duplicate your store of those things which provide comfort and well-being.” [134]

- “Never expose your reputation to the test of a single throw.” [185]

- “The wise man should try to have something of the trader about him, enough to prevent him from being swindled and even ridiculed: he should be a practical person for, if practical matters are not the highest, they are the most materially valuable things in life. What is the good of knowledge if it serves n0 useful purpose? And in these days, true knowledge consists in knowing how to live.” [232]

- “Have no heedless days. Fate is fond of playing a trick and will ride roughshod over every probability in order to catch you unawares. Your wit, wisdom, courage, even your good looks, must always be ready for the test, for their day of careless confidence will be that of their undoing. Caution always fails you when it is most needed, for thoughtlessness is the stumbling-block which brings about your downfall (…) Parade days are known beforehand and the shrewd allow them to pass by unheeded; but the day that was least expected will be the day to test your valour.” [264]

- “Always behave as though you were being watched. He is a prudent man who realizes that he is being observed, or will be observed (…) Even when he is alone he behaves as though the eyes of the whole world were upon him, for he realizes that everything will eventually come to light: he regards people who will later hear of his deeds as already witnesses of them.” [297]

Here is a link to an online version of the 1892 translation of Gracian's maxims, The Art of Worldly Wisdom by Joseph Jacobs.