Warren Buffett, Ted Williams on making better decisions in life and work

Warren Buffett, Ted Williams on making better decisions in life and workWarren Buffett, Ted Williams on making better decisions in life and workArguably, hitting a batischsetanzabend is the most difficult feat to pull off in all sports.To put this into context, the average baseball hitter swings and misses a pitch about eight times out of ten. 1These are miserable odds for any sportsman or professional in any field.In 1939, a tall, skinny, and frail looking young man, named Ted Williams, joined one of the leading American baseball teams - the Boston Red Sox - and resolved to shatter the limits of the baseball batting odds by improving his decision-making. 2Day in and day out, for hours on end, Williams would practice his swing - paying close attention to the strike zone where he hit the best balls.Within a few years, Williams scientific approach to making better decisions as a baseball hitter paid off.During the 1941 baseball season, Williams achieved a .406 batting average - tha t means he swung and missed a pitch about 6 times out of 10, the last time any major league player has done so.By the end of his career, Williams had established himself as the greatest hitter in baseball history - he won six batting titles and posted the highest career batting average of any major league baseball player in the live-ball era.Although the late Ted Williams had a natural talent in baseball, he attributed his great success to his rule of waiting for a good pitch to hit.3Similarly, in an unlikely meeting of minds, nobody embraces and champions Williams philosophy any mora than the prolific billionaire investor, Warren BuffettTed Williams described in his bookThe Science of Hitting, that the most important thing - for a hitter - is to wait for the right pitch. And thats exactly the philosophy I have about investing- wait for the right pitch, and wait for the right deal. And it will come its the key to investing. 4Buffett later noted that this philosophy of waiting fo r a good pitch to hit,was the secret to his most profitable investments including Coca-Cola, American Express and Geico.What can we learn from these two greats - in two completely different fields of baseball and investing - on how to make better decisions in life and work?Lets dive in.The sweet spot of decision makingIn Ted Williams book,The Science of Hitting,he notes that the first rule of hitting was to get a good ball to hit. I learned down to percentage points where those good balls were.Below is an image of Ted Williams and his illustration of these percentage pointsThe box on the right of the image above is a representation of Williams strike zone and the percentage points broken down into 77 squares - the red colored squares bordered with red dotted lines lay within his sweet spot.According to Williams, if he waited for a pitch within his sweet spot, hed hit the ball about 40% of the time. But if he grew impatient and swung at pitches just a few inches outside of his swe et spot, hed only hit the ball about 23% of the time.Buffett often makes reference to Williams sweet spot and draws close parallels to decision-making in investing, The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, Swing, you bum ignore them. 5This sweet spot of decision-making which both Williams and Buffett refer to, is called the Circle of Competence. And it was first referenced in Buffets1996 Berkshire Hathaway Shareholder Letterwhere he wrote that, You dont have to be an expert on every company, or even many. You only have to be able to evaluate companies within yourcircle of competence. The size of that circle is not very important knowing its boundaries, however, is vital.In his biography,The Snowball(audiobook), Buffet explains how he used the Circle of Competence to make smart investment decisions, When it comes to Microsoft and Intel I dont know what that world will look like ten years from now. And I dont want to play in a game where the other guy has an advantage. The software business is not within my circle of competence. We understand Dilly Bars and not software. 6Now that weve touched upon the importance of the Circle of Competence, lets discuss what exactly it is and how you can use the Circle of Competence to make better decisions in life and work.Circle of competenceThe Circle of Competence is a simple concept the more knowledge (or strengths) you have about what youre doing, the better decisions youll make, and vice versa.For example, lets say youre trying to decide on what exercises to do to lose weight.Like most people, youd probably search for the most popular exercises and workout routines on the web.The problem with this approach however, is that it fails to take into account your circle of competence, leading to bad decisions that cost precious time and money.Assuming youre a much better runner, than a weight lifter, but the most po pular exercises involve weight training exercises like deep squats, deadlifts and bench presses, what do you do?Based on your Circle of Competence, the best decision would be to choose more exercises that involve running.Not only would this prevent injuries, but itll also make it easier to stick to your exercise habit, and improve your odds of achieving your weight loss goals.The Circle of Competence also applies to other areas of our lives including business and profession.For example, I spent a couple of years working in a profession that required strong skills in face to face selling and networking, and even though I pushed myself to improve, I struggled to perform at the highest level because the skill set was outside of my circle of competence.One day I took an inventory of the knowledge and strengths within my Circle of Competence - writing, public speaking, research, storytelling - and decided to shift my time and energy towards them.Without a shadow of a doubt, I can now s ay that the decision to stay within my Circle of Competence has paid off in spades.This year alone, Ive been truly blessed to have the privilege of over 500,000 people read my work across major media outlets on the web.Likewise, if youre an entrepreneur, writer, white-collar professional, athlete, artist or teacher, figure out your Circle of Competence and stay within it.This will ensure that you make good decisions that will improve your odds of success, and prevent you frommaking bad decisionsthat could sabotage your potential to become the best at what you do.Stay humbleThe ancient Chinese philosopher, Lao Tzu, once said that The wise man is one who knows what he does not know.What separates Warren Buffett and Ted Williams from the rest of the pack in their respective fields isnt their natural talent. Its their ability to identify what they dont know and their willingness to wait patiently for the right opportunities to act on what they do know.The Circle of Competence is a remin der that the best way to make decisions, is to avoid making decisions on things you dont know.Resist the temptation to swing at every opportunity that presents itself, be patient and stay humble, and as the late Ted Williams would say youll get a good ball to hit.Mayo Oshin writes atMayoOshin.Com, where he shares the best practical ideas based on proven science and the habits of highly successful people for stress-free productivity and improved mental performance. To get these strategies to stop procrastinating, get more things by doing less and improve your focus,join his free weekly newsletter.A version of thisarticleoriginally appeared atmayooshin.comasWarren Buffett and Ted Williams on How to Make Better Decisions in Life and Work.FootnotesReferenceof Major League Baseball Batting Year-by-Year AveragesMontville, Leigh (2004). Ted WilliamsThe Biography of an American Hero.Williams, Ted, and John Underwood (1971).The Science of HittingHBO documentary, Becoming Warren Buffett.HBO d ocumentary, Becoming Warren Buffett.Schroeder, Alice (2008).The Snowball Warren Buffett and the Business of Life.According to Warren Buffetts business partner, Charlie Munger, the best way to expand your Circle of Competence is to read a lot. Munger once said that, In my whole life, I have known no wise people (over a broad subject matter area) who didnt read all the time none, zero. Youd be amazed at how much Warren reads at how much I read. My children laugh at me. They think Im a book with a couple of legs sticking out.