Slay Dragons — Or Avoid Them?

“We’ve done better by avoiding dragons than by slaying them." — Warren Buffett

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One of the archetypal stories of human existence is that of the brave knight who rides forth to slay a dragon. The heroic myth of an everyman leaving the comforts of hearth and home behind to confront that which terrifies him the most. Fame and fortune awaits the victor.

It’s the kind of story that stirs the blood of anyone who hears it.

And, no doubt, sometimes our only choice is to cast safety aside and charge headlong into battle — whether literally or metaphorically — against a monstrous foe.

I just wouldn’t make a habit of it.

And neither would Warren Buffett.

“We’ve done better by avoiding dragons than by slaying them,” he wrote to Berkshire Hathaway shareholders in 1989.

Now, I must admit, that line really appeals to my innate laziness as an investor.

I’m much happier stepping over a one-foot bar than leaping over a seven-foot one. And, likewise, I’d rather sneak past the dragon’s lair than show up itching for a fight.

Some might misunderstand this course of action as shirking the need for self-improvement — or even cowardice — but I think that misses the mark. Buffett’s subversive advice does not suggest that we run and hide from our problems — but, rather, that we should structure our lives so as to minimize our personal weaknesses and play to our particular strengths. Fight smarter, not harder.¹

I was reminded of Buffett’s approach to dragon-slaying when listening to Berkshire director Chris Davis on the Richer, Wiser, Happier podcast late last year. “Something that Warren and Charlie have done so well is they’ve structured their lives so whatever their weaknesses are, it hasn’t taken them down,” he said.

That’s when it really struck me: So much of greatness rests on simply avoiding trouble. Not a stroke of brilliance or a sky-high IQ. Not time spent at the office or how many emails you send each day. Just the humble act of choosing to minimize the negative and accentuate the positive.

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✨ “Warren [Buffett] is an incredible communicator and exudes this sort of warmth,” said Davis, “but he has a very hard time — as he says — making those really hard decisions to fire somebody or to replace them. So here he is, as a CEO of a Fortune 500 company, where over time he has had to make very few of those decisions. He’s structured his life to minimize those weaknesses.”

Buffett paints his masterpiece, Berkshire Hathaway, by acquiring companies for keeps. He has deliberately shaped his capital allocation and management strategy in such a way that he rarely — if ever — has to make changes or bring the hammer down on Berkshire subsidiaries and/or employees. Only the best managers, who require little to no oversight, need apply.

He seeks out .400 hitters, brings them into the Berkshire fold, and then gets out of their way. That’s probably the right approach for any manager, but it fits Buffett’s personality and temperament like a glove. It’s never smart to fight your own nature.

If he did it another way, he certainly wouldn’t be tap-dancing to work every day.

One of the reasons that Greg Abel fits so seamlessly into the Berkshire power structure is that he can be the managerial bulldog that Buffett prefers not to be.

“We’ve haven’t had a long history of being very tough on people that coasted and we’ve had some that would do that,” Buffett said last week at the Berkshire AGM. “Greg will do something about it [that] Charlie and I wouldn’t have.”

✨ Charlie Munger realized, early on, that his bold style didn’t quite fit the mold of Corporate America. “I don’t think [his bluntness] would have served Charlie as the CEO of a Fortune 500 company,” said Davis. “It wouldn’t have served him as a manager of a lot of people … So Charlie structured his life in a way where those personality traits of his didn’t set him back.”

Charlie worked with a close circle of trusted associates — and no one else. He refused to play the political games that greased the wheels for promotion and advancement at a large bureaucracy. And, as he freely admitted, he wasn’t very good at that anyway.

“Even though I was a good poker player when I was young, I wasn’t good enough at pretending when I thought I knew more than my superiors did,” he told the USC Gould School of Law graduates in 2007. “And I didn’t try as hard at pretending as would have been prudent. So I gave a lot of offense [to others].”

Those very personality quirks that might hold Charlie back as a “normal” CEO were the same ones that made him an incredible investor — immune to herd thinking and lemming-like behavior — and a fount of wit and wisdom on just about every subject under the sun. Charlie recognized that and acted accordingly.

✨ Chris Davis, himself, realized that the impersonal nature of the stock market suits him better than negotiating with others face-to-face. “What I love about stocks is that the price is set,” he told William Green. “I’m not negotiating with the other person … My inability to be a hard-nosed negotiator has not hurt me.”

Some people thrive on looking across the table at another person, sizing ‘em up, and haggling over dollars and cents. Others like Davis (and me) prefer to quietly evaluate a business, see what price it’s currently trading at, and then make a buy-or-sell decision.

“Stocks sort of create the perfect venue where you don’t need that individual on the other side,” said Davis. “You don’t need to come to terms with the seller. Instead, I have a set price and I can figure out what to do with that price.”

Davis didn’t bang his head against the wall trying to be something that he isn’t. Instead, he embraced the aspect of business that appealed to him — and kept those parts that made him uncomfortable at arm’s length.

✨ Davis offered one other notable example: Tiger Woods. “[Early in his career], the weakest part of Tiger’s game was coming out of the sand trap,” he said. “He was not very good at that … and they were playing the British Open at a course renowned for these bunkers that looked like they were created by a piece of artillery.”

The media pestered Tiger about how he would handle the 100+ “deep and nasty” bunkers at the Old Course at St. Andrews — hazards made all the more difficult by the blustery Scottish weather.

He told them he wasn’t worried — because he planned to stay on the fairways and out of the sand altogether. And, incredibly, that’s exactly what he did. Tiger cruised to an 8-shot win and never once landed a shot in one of the Old Course’s feared bunkers.

Tiger Woods won his first Claret Jug because he honestly appraised his overall game and crafted a plan that played to his strengths off the tee and avoided his weak spots.

✨ Of course, some things are worth the fight. Warren Buffett did not shrink from his fear of public speaking, but confronted it head-on by enrolling in a Dale Carnegie course — and came out the other side as one of the great showmen of the money game. Likewise, Buffett and Munger went to the mats for the Buffalo Evening News during the paper’s contentious legal battles in the late 1970s and early 1980s.

Avoiding dragons doesn’t mean wallowing in our flaws — but possessing the courage to honestly appraise ourselves (warts and all) and then to create a life that maximizes the good and minimizes the bad.

“A very powerful lesson for people to carry out is not to necessarily obsess on your weaknesses,” said Davis, “but to do your best to structure your life so that you can avoid a lot of them.”

1. I also like this quote from Jordan Peterson: “Slay the dragon in his lair before he comes to your village. If you run from the things you are afraid of, you run from what you need to find.” Some see this as a contradiction of Buffett’s point, but I don’t take it that way at all.

Many things are absolutely worth fighting for. Buffett just recommends that we set up our lives so that these do-or-die moments come few and far between. Discretion being the better part of valor and all.