Alistair's blog

All great things start with humble beginnings.

I’ve first encountered the idea of compounding with my serendipitous learning of Warren and the legend of Berkshire Hathaway. But what really struck with me was not the monetary compounding that Berkshire is, but rather the personal compounding that Warren and Charlie attest to – value investing, as it is traditionally practiced, may go out of favor from time to time. But the values that value investors preach – deserving good people around you by being a good person yourself, lifelong learning, focus, integrity, and civil duty – are timeless.

The wonderful thing about compounding is that it does not require genius. Anyone, by being a little focused, can benefit from the magic of compounding. You can start small, like making your bed every morning (which, by the way, is a habit that I know my friend Mathew practices when we were roommates). Eventually, if you keep at it, small improvements everyday will add up.

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A few weeks ago, I caught up with my primary teacher that I haven’t met in more than 10 years. After teaching me, she taught third grade for a little while, and then jumped around different cities and schools and is now the kindergarten principal of a school in Hangzhou. She was easy to recognize at first glance. But after sitting down and looking closer, it seemed to me that she gained some weight and that she was more stressed compared to just being responsible for a small Chinese class. It didn’t take long into the conversation before I realized that she remained unmarried, and that she also regretted the long detour she took before finally settling in Hangzhou. She admitted that her decisions benefitted her career and status; but the unforgiving environment of her school and the shallow culture of Chinese parents have made her rethink her choices. “Kids these days…” she said, “they are just exposed to so much more information through the internet. They understand the brutal world they will be dropped into…they’ve lost ambition…work ethic…they are glued to their phones all day…Sometimes I wonder Yang, do you think I’ve made a difference in your life? Are you the person you are today because of me? I think kids are almost destined to become who they are meant to be…they will learn by themselves…and compared to kids today, I don’t know if there is as much value in being a teacher anymore…I tell my teachers ‘you are just a small part in their lives…’So, I don’t know…sometimes parents come up to me and say, ‘We are okay if our kid just becomes a baker one day, as long as they like it, whatever they want to do is fine by us.’ And I cannot help but think, ‘are you serious?’, what is the point of such statements, do you think your kid really wants to be a baker? What would you think if I told you that Yang when you were young, would you be happy with such advice? And even if they did love baking, they will become a baker, you do not need to claim nobility over such statements. But you know…Yang, some kids these days really will just settle and work in a bakery…they don’t care.”

We went on for 3 hours talking about our lives since then (especially mine) and all the things that we still remember from the past – I asked about other teachers while she asked about other students. But more importantly, she wanted to know how I think about the world and what I intended to do with my life now after college. I briefly told her about my plans and how I graduated and worked for a little while, but then moved back to Shanghai and now am working for myself…but eventually I stressed what was important to me, “You know, Ms. Li, I usually don’t like it when parents and teachers ask me what I am up to now…like I have something to prove…everyone wants to find out what everyone is doing…to categorize people, to build an imaginary leaderboard. But you know, I think with fresh graduates these days, you are already doing better than most if you know what you want and are working towards it. Having a great life – like having a piece of work that you want to work on, having good friends and a good social circle, being physically and mentally healthy, having good values and being a virtuous person yourself…having all these seemingly basic things is already rare. I think many graduates are lost. It’s hard to find momentum in a game where competition is fierce by default.” It seemed like I am describing the same problem that she was introducing to me a few minutes ago.

She nodded. So, I kept going, “I must admit to you that the past year was a rather challenging period for me. I felt like I made some bad choices and that I faced the consequences. Initially, being back in Shanghai was tough for me…because I didn’t really want to be back home…with family…I felt like I was moving backwards. I felt that, while I am still young, I needed to be somewhere unfamiliar, somewhere challenging and exploring new places. I didn’t feel good about myself. I felt lazy. Unresponsible. I felt that I’ve let myself down. And then when I was working, and especially after I quit, I was just really disappointed in myself…and I didn’t know what to do. I rejected all of the options handed to me and I ignored a lot of different advice. I felt that I also wasted a lot of time. You remember how I was when I was a little kid Ms. Li? I was clearly not a dumb kid…but you know…I was shy, lazy, and very stubborn. I never wanted to do work and always wanted to play games…I thought I could outsmart everyone else by taking shortcuts or by using less effort…you know it’s funny Ms. Li…some things never change. And I’ve learnt these are flaws of mine, and I’m trying to change…” She interrupted me with an anecdote, “Yea…I remember one time when I was hanging out with you we decided to play Chinese chess…we played one round and you lost to me…and then we played the second time a week later and you beat me. And since then you’ve won every game and every time I made you do work you would pull out the Chinese chess set…” I laughed along, sort of remembering what she talked about. “I just didn’t want to do any work.” I added, “For some reason I always thought about what the meaning of any activity is…and I always concluded that it was kind of meaningless and I didn’t want to spend time on it. I just rather spend my time playing some game that I found fun…So going back when I found myself in this situation that I mentioned, I think it was the same habit – I just didn’t see any meaning in all the work that I was doing or the platform that I was working under…so I just stopped doing it. And then came the problem of figuring out what to do next…”

“So here we are Ms. Li…here we are…I made another choice. Just like you, a few years ago. I moved back to Shanghai…yes…and I decided to start a company and invest on my own…and yeah…who knows if it’s the right decision. But at least I thought about it and believe this is the more meaningful path. I am going to struggle. No doubt about that. I am not prepared. I am even underprepared. I don’t know enough. Probably not even disciplined enough to pull this off to be honest with you…And I try to be honest with myself…And I understand that my privilege has allowed me to do this…so I am luckier than others Ms. Li…no doubt about it…but I didn’t choose this. I am just trying to play my cards right, to the best of my ability…I hope I will. I don’t want to be an ungrateful bastard and waste this luck. I hope to repay my debt that I owe. At least I intend to…I understand that I am an ordinary person. I understand that. But I believe in the power of compounding Ms. Li – if you can identify any ounce of ambition on me, that is it, not the fact that I am arrogant enough to believe I am special…those days are long gone…it’s that I believe in the power of compounding Ms. Li. If I just play my cards right, and don’t be a fool, I will do fine over time. At least I intend to…” She then uttered some words that comforted me, “I trust that you will be fine Yang. You always thought a lot about something before you did it. You were always a kid that strategized.” “Yea but that’s also the problem you see…” I answered, “being a smartass was not a choice, it was my nature, but making a decision and working hard towards it – that’s a choice. And there is much more nobility in that. That’s what I need to learn. That’s where I need to be. Oh, and some god damn patience. I need to learn some god damn patience…”

She briefly changed the topic before more incoherent thoughts came out, “And what about that kid that you were good friends with? Alex? What is he up to? Are you still in touch?” “Ah that guy,” I smirked, “yeah, we are still good friends. Actually, we’re still very good friends. Hah. That guy. He’s in the US right now doing his masters. No, I don’t know what he’s going to do afterwards. He might stay there. He might not. I don’t think he knows either…Yea he was a smart kid you’re right…you’re definitely right…Alex…yep…Chen Hao Lin…that’s the one…no he’s not gay…”

“In all seriousness…Ms. Li…it was nice seeing you. And I know you are going to retire soon. I still remember all of my Chinese teachers. Although they all hated me but I still remember all of them. If only I could see some of those who lost touch…that would be great. You remember Ms. Xie? She gave me a pencil case off her shelf my last day in Year 4…I always remembered that…Oh she went to another school? In Shanghai? Oh man I wish I could see her and tell her about that memory…I wonder if she still remembers…But anyways, if there is anything you want to know about me from this time catching up…just know this: I am struggling just like many others are…but I just happen to be a bit luckier than others…I try to make choices that I can feel proud of. I am trying to build a life like everyone else is. Making choices and accepting its consequences…I never expect you, or anyone else for that matter, to be talking to someone, and my name comes up, and say, “Alistair is doing really well…” I never believed in this idea of happiness…or at least I never experienced it…happiness is a myth…misunderstood…When I look back at my life in a few decades time, will I feel shame for all the difficult times that I struggled? Quite the contrary, I think it is those moments, where you are facing the banality head on, that you should feel proud of. You know, I watched this documentary a few weeks back. It was on Robert Caro, this famous American biographer, who spent and will spend his entire life writing about Lyndon Johnson. He has one last book to complete while being almost 90 years old…many speculate whether he can even finish this last monumental work. He spends every waking hour of his day researching and writing…in the same office that he has worked for decades…with only a typewriter and a notepad. He would move to Lyndon Johnson’s childhood town just to finish a chapter and is planning to live in Vietnam soon to understand the impact of the war had on the soldiers. That really inspired me…can you imagine? Spending decades reading, writing, editing, and repeat. He crafts over 3000 pages by starting with a single sentence. A little black ink on wood pulp…and then page by page…he creates his own masterpiece. The dedication to the craft…his unwavering focus on his work…his discipline and his relentless work ethic made a mark on me.”

“I hope that’s what I can do, Ms. Li, I hope that’s what you would one day say about me – that this little wise-ass kid who you taught in third grade would be someday trying to compound his way out of the game of life…That, no matter what mistakes he make, what continuous failures he may run into, how painful it may be, he would not interrupt the compounding. If there ever was a time that you would be glad to see me, or even be proud of me, let it be now, and not later. Let it be now…”