Difficult to Teach a New Dog Old Tricks

Author: Warren E. Buffett Source: Berkshire Hathaway shareholder materials

Overview

Buffett's essay on the difficulty of changing established investment approaches and the importance of early investment education.

Key Themes

The Learning Problem

"It is difficult to teach a new dog old tricks."

Buffett observed that investment managers who learned one approach often cannot adapt to different methodologies, even when evidence shows the old approach is failing.

Implications for Investors

1. Early education matters — Investors trained in certain paradigms struggle to embrace new approaches
2. Humility is essential — Willingness to acknowledge mistakes and change course
3. Simple principles — The best investment approaches are often simple enough to explain but difficult to practice consistently

The Investment Management Challenge

Buffett contrasted "investment managers" who focus on relative performance versus those who focus on absolute value. Many professionals cannot escape the "performance anxiety" of short-term benchmarking.

Related Concepts

• behavioral-bias
• independent-thinking
• intrinsic-value

Source

Warren E. Buffett, Berkshire Hathaway.