Part 2 of 3: Here’s Why Having a Mentor is Important for You (Science Backed Evidence)
This write up is the 2nd part of a 3 series write up on the topic of value investing mentorship. I will be laying out what is a mentor and the facts on why having a mentor is important.
A mentor by Oxford dictionary definition is an experienced and trusted adviser.
Based on that definition, there are two parts that a person needs to satisfy to be classified as a mentor:
- He or she has to be experienced in the particular subject matter at hand
- He or she needs to have a character and reputation that you trust
So… How do we know if that person has the experience and is really trustworthy? I will answer this question at the end of this write up.
First, let’s look at the science backed evidence on why having a mentor is important, shall we?
Case study #1: Mentorship is the science field
Mentorship is a concept that covers a lot of different industry — even in the lab for scientists. Christine Pfund, an associate scientist in the Wisconsin Center for Education Research at the University of Wisconsin-Madison who have had extensive research on the topic of mentoring in sciences says, “In short, good mentorship impacts who does science, how productive they are, and how satisfied they are on a science career path.”
This means that someone who have had a mentor in the early phase of their career as a scientist, can be more probable to be more successful in their career as mentioned by Christine Pfund, an associate scientist in the Wisconsin Center for Education Research at the University of Wisconsin-Madison
Joshua Morgan — posses similar views on mentorship — a postdoctoral researcher in the Department of Biomedical Engineering at the University of Delaware, and recipient of the 2016 Proteintech Best Postdoc Mentor Award, says, “Research is uniquely frustrating, and without positive mentoring, it can drive good scientists away from the lab, or worse, to ethically questionable choices.” and “Honestly, mentoring is one of those things that just keeps paying dividends. In addition to the emotional rewards of helping fellow scientists achieve, surrounding yourself with capable scientists enables good science.”
Hence, in the science field — having a mentor is proven to be useful to a scientist’s success.
Case study #2: Mentorship in Business
Management Mentors is a company near Boston that focuses on corporate mentorship best practices for over 20 years now — founded by Rene Petrin. He said that employees are a company’s biggest asset and taking care of them is key.
He said that mentoring creates more loyalty and breaks down the mentalities of silo. Mentoring is important because every employee comes in with different backgrounds, experiences and wisdom — and in business, in corporate, they should tap on those — if not, a lot of opportunity is missed.
While coaching is about building a skill set, mentoring is about building transformational relationship. The beauty of mentoring is that it works — with the focus being on a transformational relationship.
In business, relationship is important — and mentoring creates a unique improvement in the mentee’s ability to be a success in the business world.
Case study #3: Warren Buffett and Benjamin Graham (value investing living legend and legend)
Now, let’s see the evidence in relation to value investing — mentorship in value investing.
Warren Buffett has been in investing in the stock market since he was 11 years old — he is 87 years old as of 2018 — meaning that he has been in the stock market for 76 years. That is a long time.
Warren is passionate about stock investing for sure — more specifically, value investing. Have you ever wondered how did he start to be so passionate about value investing? What inspired him to embark on this lifelong mastery in value investing?
He has a mentor.
When Warren Buffett was 20 years old, he went to Washington D.C., Columbia University to find Benjamin Graham — who became his mentor.
Why did Warren find Benjamin Graham out of any other individuals out there? The answer is because when Warren was 19, he bought The Intelligent Investor book written by Benjamin Graham. And he was so inspired by it — by the concept that we have to look at a stock as if it is a business — that he re-read Benjamin’s book at least half a dozen times — inspiring him to be a value investor.
“Ben Graham was certainly the man who set me on the course that’s worked now for a good many years,” — Warren Buffett
Ben also taught Warren the two rules of investing that Warren lives by — the first being to never lose money and the second is to never forget rule number one.
“Investment is most intelligent when it is most businesslike” — Benjamin Graham
The above quote by Benjamin Graham clearly displayed the influence that he as as Warren’s mentor. As Warren Buffett often said that the critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price. The business focus thinking of Warren is clearly the same as Benjamin Graham’s thinking.
I would safely say that Warren today in 2018 might not be who he is if he had not had Benjamin Graham as a mentor. And going back to the two criterias needed for a mentor,
- He or she has to be experienced in the particular subject matter at hand
- He or she needs to have a character and reputation that you trust
Benjamin Graham without a doubt has experience in value investing as he not only ran his own hedge fund before, he is also a professor in Columbia University and wrote two books that perfectly encapsulates the spirit and methodology of value investing — The Intelligent Investor and Security Analysis — evidence that he has a character and reputation that people can trust.
Here’s a video from Youtube to further prove Warren Buffett endorsement on the importance of a mentor — Benjamin Graham:
Conclusion
It is vital to have a mentor. No matter what field you are in — and in the field of investing, it is especially profitable. In the next (3rd and final series of my value investing mentorship report), I will share with you in greater details why I would be a worthy mentor.
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