The greats you should base your investing on

If I have a skill, or perhaps more accurately an 'approach' that works, it's in doing my best to synthesise the ideas of others.

following famous investors in shares represented by pair of men's business shoes

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"Dad, you wave at people a lot when you're driving. I think it's because you're old."

Now, as much as I'd like to believe my son was wrong about that first statement, I'm not sure he is.

A driver coming the other way had pulled further to his left to give me room to go around some workers on the side of the road. So yes, I waved in acknowledgement and thanks.

It did give me the opportunity to talk to my son about being kind, and thankful. And that I try to be considerate in return. I told him that my hope is also that by being considerate, and appreciating others when they are, too, it might lead, in a very small way, to a slightly nicer community.

And it reminded me of driving in the country. We try to get away for a few weeks every winter in the school holidays – recently that's been a series of driving holidays in the bush. If you've done the same, you'll know that there's a very strong correlation between the distance from a capital city, and the likelihood that you'll get a wave from an oncoming driver.

Obviously impractical around town – you'd get RSI just going to and from work – but in the bush there's something really nice about acknowledging each other in that very small way.

Surprise, surprise: after I dropped the young bloke off at school, my thoughts turned to investing.

It reminded me of what might be my favourite quote of all time (it's a crowded field, and I reserve the right to change my mind!), from Sir Isaac Newton:

"If I have seen further than others, it is by standing upon the shoulders of giants."

This statement of absolute humility, from one of the greatest minds humanity has known, has always struck me.

None of us can do it – anything – all alone.

We are the product of our lives up to this point:

Parents, siblings, extended family, friends, neighbours, teachers, colleagues, managers, coaches, teammates, books, television shows, opportunities, obstacles, successes, failures…

There is no self-made man or woman. There is no overnight success. None of us achieves anything from first principles.

Which, frankly, we should find wonderfully freeing. It should free us from our own egos. And lower the heights of the mountains we aim to climb.

The humility to stand on the shoulders of giants – to learn from others, and use their example and expertise – also gives us an enormous advantage.

Investors don't have to divine for ourselves the mathematical concepts behind the 'discounted cash flow' model. We don't have to invent the term 'competitive advantage'. We don't need to discover the beauty of a capital-light business model. Or the benefits of economies of scale. And much more, besides.

Indeed, we have never had more information – and access to that information – including the ideas, successes and failures of those who came before.

It would be hubris in the extreme to think that we can find or invent some heretofore unknown investing principle or paradigm. And even if we could, the time and effort it would take would almost certainly be better used understanding what is already known, and putting it to work for ourselves.

And yet, it is that very hubris (and/or ego) that leads many to ignore what is already known. It is behind the 'not invented here' syndrome that inflicts much of society. And, frankly, we see it all too often in the 'Warren Buffett's lost it' headlines, and the idea that 'old fashioned' investing principles don't apply for one reason or another.

(Indeed… the increase in such sentiment is an interesting sign that investors may be getting carried away. No, don't use it to try to time the market, but do be careful if you feel yourself getting caught up in something!)

Me? I don't think I've ever had an original idea about an investing principle. About how they might apply, sure. But there is no 'Phillips Constant' or 'Phillips Trading Strategy'. I think I've done okay applying existing principles, but not inventing my own.

I've written this before, but I am almost never the smartest person in the room (sometimes, not even when I'm alone!). If I have a skill, or perhaps more accurately an 'approach' that works, it's in doing my best to synthesise the ideas of others and apply them to new circumstances.

I've taken the maths of Ben Graham, the sensibility of Warren Buffett, the multidisciplinary brilliance of Charlie Munger, the explanations of Peter Lynch, the business savvy of Jim Collins and the behavioural insights of Danny Kahneman and Amos Tversky. I've read countless others who have unpacked and explained all of the above, and more. And I've internalised Aesop's 'Tortoise and the Hare', both as a general principle and as encapsulated in my single favourite investment picture: The Vanguard 30-Year Index Chart.

There are a lot of giants in the paragraph above. Neither you nor I could hope to become any one of them via our own efforts in a single lifetime – and certainly not all of them.

And to return to my original point, each of those people has paid their expertise forward – in their writing, speaking, and in their example and results. The beauty of knowledge is that it is, like investing, a compounding phenomenon: the more you know, the more you can know.

I do this job in large part because I was fortunate enough to learn from my now-colleagues in the US, when I was starting out as an investor. And because I can repay that by paying it forward to others.

More giants. More shoulders.

So, this is my acknowledgement of them. And my hope is that by sharing it, others will be able to access the lessons I've learned.

I had a lovely message from a reader the other day, thanking me for what I do in this space and on our podcast, Motley Fool Money. He wanted to send me a small gift as a thank you.

Which is flattering, obviously. And very much appreciated. But I asked him, instead, to just pay it forward – to share what he's learned and benefitted from, with others.

No, I don't think I'm going to unleash a new wave of waving drivers. Or a wave of investors who've had their own Damascene conversions. But if I can make a bit of a difference, for a few people, I'll consider my work done.

And the 'old' bit of my son's comment? I'm just going to have to cop that one on the chin!
Fool on!

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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