Warren Buffett and Ted Williams on how to make better decisions in life and work

Arguably, hitting a baseball 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. [1]

These 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. [2]

Day 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 — that 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.”[3]

Similarly, in an unlikely meeting of minds, nobody embraces and champions Williams’ philosophy any more than the prolific billionaire investor, Warren Buffett:

“Ted Williams described in his book The Science of Hitting, that the most important thing — for a hitter — is to wait for the right pitch. And that’s exactly the philosophy I have about investing—wait for the right pitch, and wait for the right deal. And it will come … it’s the key to investing.” [4]

Buffett later noted that this philosophy of “waiting for 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?

Let’s dive in.

The sweet spot of decision making

In Ted Williams’ book, The Science of Hittinghe 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 points:

The 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, he’d hit the ball about 40% of the time. But if he grew impatient and swung at pitches just a few inches outside of his sweet spot, he’d 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.” [5]

This “sweet spot” of decision-making which both Williams and Buffett refer to, is called the ‘Circle of Competence.’ And it was first referenced in Buffet’s 1996 Berkshire Hathaway Shareholder Letter where he wrote that, “You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle 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 don’t know what that world will look like ten years from now. And I don’t 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.” [6]

Now that we’ve touched upon the importance of the Circle of Competence, let’s discuss what exactly it is and how you can use the Circle of Competence to make better decisions in life and work.

Circle of competence

The Circle of Competence is a simple concept: the more knowledge (or strengths) you have about what you’re doing, the better decisions you’ll make, and vice versa.

For example, let’s say you’re trying to decide on what exercises to do to lose weight.

Like most people, you’d 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 you’re a much better runner, than a weight lifter, but the most popular 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 it’ll 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 say that the decision to stay within my Circle of Competence has paid off in spades.

This year alone, I’ve been truly blessed to have the privilege of over 500,000 people read my work across major media outlets on the web.

Likewise, if you’re 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 from making bad decisions that could sabotage your potential to become the best at what you do.

Stay humble

The 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 isn’t their natural talent. It’s their ability to identify what they don’t know and their willingness to wait patiently for the right opportunities to act on what they do know.

The Circle of Competence is a reminder that the best way to make decisions, is to avoid making decisions on things you don’t 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: you’ll “get a good ball to hit.”

Mayo Oshin writes at MayoOshin.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 this article originally appeared at mayooshin.com as “Warren Buffett and Ted Williams on How to Make Better Decisions in Life and Work.


Footnotes

  1. Reference of Major League Baseball Batting Year-by-Year Averages
  2. Montville, Leigh (2004). Ted Williams: The Biography of an American Hero.
  3. Williams, Ted, and John Underwood (1971). The Science of Hitting
  4. HBO documentary,” Becoming Warren Buffett.”
  5. HBO documentary,” Becoming Warren Buffett.”
  6. Schroeder, Alice (2008). The Snowball: Warren Buffett and the Business of Life.
  7. According to Warren Buffett’s 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 didn’t read all the time – none, zero. You’d be amazed at how much Warren reads – at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”