I recently read The Greatest Trade Ever by Gregory Zuckerman, which gives a nice look at the rise of the housing bubble and John Paulson's trade that reaped billions for his hedge fund. I've since moved onto Snowball: Warren Buffet & the Business of Life and I wanted to reflect on simple, yet important lessons I've taken away from both books.

John Paulson and Warren Buffet never allowed self-doubt or frustration to radically shift their investment philosophies. As the housing boom was moving along at full throttle on Wall Street, Paulson was surrounded by colleagues in hedge fund industry posting record returns while his fund sputtered along. For many, the housing boom was the trade of lifetime -- everyone was winning. From the average American homeowner to the Wall Street firms, everyone along the mortgage chain was happy as could be. Yet, Paulson sat on the sidelines. How many people can actually say they would have sat on the sidelines as their hedge fund was sputtering along when there was plenty of easy money to be made?

The same can be said for Warren Buffet, who is undeniably the King of Consistency when it comes to his investment principles. Even in the 1980s as Leveraged Buyouts became front page news, Buffet refused to get sucked into the culture of easy money. As firms like KKR piled high levels of debt onto companies without much of their own cash, such actions only solidified his commitment to long term growth versus financial engineering.

As simplistic as it may be, Paulson and Buffet stuck to what they believed in. Both men did not allow outside influences -- whether it was friends, colleagues, or the broader economic environment -- to alter their investment principles. As the herd was running in one direction, but both Paulson and Buffet simply asked "Why is this happening?" and allowed their experience and research to guide their decision making.