The Noah principle: if you believe something, act on it

"Predicting rain doesn’t count — building arks does." ?This simple but profound statement captures the essence of what it means to turn foresight into action.? The world rewards those who build, create, and act on their beliefs, not those who simply predict what will happen.? In business, investing, and life, the biggest mistakes aren't necessarily the actions we take that go wrong; they're often the actions we fail to take.

Let's explore this principle through the lens of some of the world's greatest investors: Warren Buffett and Charlie Munger.

Mistakes of omission: the invisible cost of inaction

Most people focus on mistakes of commission—the things they did wrong, the investments that lost money, the decisions that backfired.? But far more costly are the mistakes of omission: the opportunities missed, the actions not taken.? These mistakes are invisible, which makes them easy to overlook.? But as Buffett and Munger have shown, mistakes of omission can cost billions.

Consider one of their most famous regrets: not investing in Walmart when they had the chance.? Buffett and Munger identified Walmart as a great investment opportunity.? They believed in the company's potential.? However, by the time they decided to buy, the stock price had risen, and they hesitated.? That hesitation cost them dearly.? By missing out on Walmart, they estimate that Berkshire Hathaway lost out on over $10 billion in potential gains.

This wasn't a mistake of bad judgment—they were right about Walmart's potential.? It was a mistake of inaction.? They believed something, but they didn’t act on it.

The See's Candies story: acting on conviction

In contrast, consider their investment in See's Candies.? When Buffett and Munger first considered buying the company, they were initially hesitant because the asking price seemed high.? But they believed in the quality of the brand and the loyalty of its customers.? They decided to act on that belief and made the purchase.

That decision turned out to be one of Berkshire Hathaway's sweetest acquisitions (sorry about the pun).? As Buffett said in his 2019 shareholder meeting: "We put $25 million into it and it's given us over $2 billion of pretax income, well over $2 billion,".

The key difference?? They acted on their conviction.

Why do we hesitate to act?

The biggest barrier to action is often fear—fear of making a mistake, fear of looking foolish, fear of taking a risk.? But as the Noah principle teaches us, predicting a storm is meaningless if you don’t build an ark.? Inaction is a silent killer of progress.? The cost of missed opportunities compounds over time, and those costs can far outweigh the occasional mistakes made from acting too quickly.

Another reason we hesitate is that mistakes of omission are invisible.? If you lose money on an investment, it's obvious.? But if you fail to invest in a winning opportunity, no one sees the loss—including yourself.? This makes it easy to rationalise inaction.

Turning belief into action

How can we apply the Noah principle in our own lives?? The key is to develop a mindset that values decisive action:

1. Trust your analysis: if you've done your homework and believe in an opportunity, don't let minor short-term factors hold you back
2. Accept the risk of failure: not every action will succeed.? But the cost of inaction can be far greater than the occasional misstep
3. Learn to recognise opportunity costs: missed opportunities have real costs, even if they're not immediately visible.? Consider what you're giving up by staying on the sidelines.

Final thoughts

History doesn’t reward the predictors; it rewards the builders.? Warren Buffett and Charlie Munger have made mistakes of both commission and omission, but they’re quick to point out that their biggest regrets come from inaction—not acting on beliefs they held strongly.

The Noah principle reminds us that seeing the future isn’t enough.? We must act on our beliefs.? Whether it’s in investing, business, or personal goals, the true cost of hesitation often goes unnoticed until it’s too late.

So, the next time you believe in something—whether it’s a business idea, an investment, or a personal decision—remember: "predicting the rain doesn’t count - building arks does".