Warren Buffet is great with numbers, and I love math, too. But being good with numbers doesn’t necessarily correlate with being a good investor. Warren doesn’t outperform other investors because he computes odds better. That’s not it at all. Warren never makes an investment where the difference between doing it and not doing it relies on the second digit of computation. He doesn’t invest—take a swing of the bat—unless the opportunity appears unbelievably good.
One habit of Warren’s that I admire is that he keeps his schedule free of meetings. He’s good at saying no to things. He knows what he likes to do—and what he does, he does unbelievably well. He likes to sit in his office and read and think. There are a few things he’ll do beyond that, but not many.
One absolute truth about Warren is that he is a creature of habit. He grew up in Omaha, and he wants to stay in Omaha. He has gotten to know a certain set of people, and he’d like to spend time with those people. He’s not a person who seeks out exotic new things. Warren, who just turned 65, still lives in the Omaha house he bought for himself at age 27.
His affinity for routine extends to his investment practices, too.
Warren sticks to companies that he is comfortable with. He doesn’t do much investing outside the United States. There are a few companies that he has decided are great long-term investments. And despite the self-evident mathematics that there must be a price that fully anticipates all the good work that those companies will do in the future, he just won’t sell their stock no matter what the price is. I think his reluctance to sell is more philosophical than optimization driven, but who am I to second-guess the world’s most successful investor? Warren’s reluctance to sell fits in with his other tendencies.
Warren has certain good values. He feels lucky to live in an era wherein his skills have turned out to be so remunerative. Had we been born at a different time, these skills might not have had much value. Since he doesn’t plan on spending much of what he has accumulated over time, he makes sure that his wealth benefits society.
In a sense, Warren is constantly working with charity organizations and, in any case, his beneficiaries will get only a small portion of what he accumulated because the investor believes that passing on huge wealth to children isn’t in their or society’s interest. Warren likes to say that he wants to give his children enough money for them to do anything but not enough for them to do nothing. I’ve heard the words before but when it comes straight from the Omaha investor’s mouth, the articulation sounds powerful enough to crystallize one’s feelings.
Warren says most books written about him are, in most respects, accurate. He says he is going to write his own book someday, but given how much he loves to work and how hard it is to write a book (based on my personal estimation), I think it will be a number of years before he does it. When it comes out, I am sure it will be one of the most valuable business books ever.
Already, Warren’s letters to shareholders are among the best of business literature.
Already, Warren’s letters to shareholders in the Berkshire Hathaway annual reports are among the best of business literature. Readers are always intrigued by the man and his methods so you might want to keep tabs on http://www.meziesblog.com to lay hands of them someday because they’re timeless.