“Warren Buffett and the Businessof Life”Leadership BiographyTotal LeadershipSpring 2013George Schultz
The Real Warren Buffett…“I offer you the real Warren Buffett. A manger of capital. And aleader of people.” - James O’Loughlin Born in 1930 (currently 82) in Omaha, Nebraska – two siblings Father (Howard Buffett) was US Representative Attended Wharton before transferring to University of Nebraska–Lincoln. ReceivedMBA from Columbia Business School. Joined Graham-Newman (1954-56) to work for his idol, Ben Graham. Moved back to Omaha to start the Buffett Partnership (1956-1969) Unintentionally took over Berkshire Hathaway Inc. (“BRK”), a textilemanufacturer, in 1970. Became CEO and Chairman. Later partnered with friendCharlie Munger. Through investments (both public and private) Buffett grew BRK into a $250 billioncompany…earning the nickname, “The Oracle of Omaha.” $10,000 invested with Buffett at the start of his tenure would be worth somewherein the neighborhood of $500 million (before taxes) today Currently the 3rd wealthiest person in the world, and one of the most influentialpeople. Pledged 99% of his fortune for philanthropy.Much can be learned from studying Buffett – both about investingand, more importantly, about life…
The Four Domains Buffett at Work… Found his passion (very) early “We’ve been deploying capital since Iwas 11. That’s our business.” Does what he loves “I enjoy the process far more then theproceeds, though I have learned to livewith those as well.” “If we were not paid at all, Charlie and Iwould be delighted with the cushy jobswe hold.” Very good at motivating people “He has a way of motivating you. Hetrusts you so much that you just want toperform.” – Bill Child, R.C. Willey HomeFurnishings
The Four Domains Buffett in the Community… Makes time for friends (playsbridge 12 hours/week!) “He’s just my best friend. He’schanged my life. I’m the luckiesthuman being in the world.” -Sharon Osberg (Bridge Partner) Gives back “If you’re in the luckiest 1 per cent ofhumanity, you owe it to the rest ofhumanity to think about the other 99per cent.” – Warren Buffett Views himself as a teacher Bases his life on “deserved trust” “It’s a new concept in business. It’scalled trust.” – Barry Tatelman,Jordan’s Furniture
The Four Domains Buffett on Self… Keeps an internal scorecard “The big question about how people behave iswhether they’ve got an Inner Scorecard or an OuterScorecard. It helps if you can be satisfied with anInner Scorecard. Does what makes him happy “I really like my life. I arranged my life and so thatI can do what I want… I tap dance to work, andwhen I get there, I think I’m supposed to lie on myback and paint the ceiling.” Is a continuous learner “Warren Buffett is one of the best learningmachines on this earth. The turtles which outrunthe hares are learning machines. If you stoplearning in this world, the world rushes right byyou.” – Charlie Munger Instills good habits “Chains of habit are too light to be felt until theyare too heavy to be broken”
The Four Domains Buffett with Family… Recognizes the importance of family “(LTCM) was a major deal…but it could nothave come at a worse time. Buffett wastrying to leave his office to get to agranddaughters birthday party.” - Fortune Integrates Buffett brought along and reread (to his wife)Security Analysis during their honeymoon Son, Howard, is a board member of BRK Experiments “Eventually, Warren Buffett bought his son afarm. However, he charged Howard rentbased on his sons body weight” Wants his children to find their passion “A very rich person should leave his kidsenough to do anything but not enough to donothing.”
ConclusionClassic Buffett Question: Imagine that you may choose one otherstudent in your class, and thereafter be entitled to 10 percent of thatstudent’s earnings for life. Who would you choose?“The interesting thing is, when you think about what’s going through your mind,you’re not thinking about things that are impossible for you to achieve yourself.You’re not thinking about who can jump 7 feet, who can throw a football 65 feet,who can recite pi to 300 digits, or whatever it might be. You’re thinking about awhole lot of qualities of character. The truth is, that every one of those qualities isobtainable. They are largely a matter of habit. My old boss, Ben Graham, when hewas 12 years old, wrote down all of the qualities that he admired in other peopleand all the qualities he found objectionable. And he looked at that list and therewasn’t anything about being able to run the 100 yard dash in 9.6 or jumping 7 feet.They were all things that were simply a matter of deciding whether you were goingto be that kind of person or not.”The lesson of Warren Buffett: Warren has been incredibly proactive throughout hislife at forming the qualities of character that he admires. He doesn’t do things hedoesn’t want to do. He says no. He integrates. He experiments. He makes time forhimself, his family and friends. He does what he loves. He operates in a web oftrust. Potentially most instructive though he wasn’t always a personal success.Warren’s life is fascinating to study because he has continually improved.