5 Unexpected Traits in the U.S.'s Greatest Businessman
Whether or not you’re interested in money,
if you have ever bought chocolate from See’s Candy, seen a GEICO ad, or been to
Dairy Queen you should know something about the owner Warren Buffet. You might
assume since he’s super wealthy, that he’s a greedy corporate jerk. In fact, for a business person, he is amazingly
honest, open and humble. In many ways he is the exemplary business person and his
method has brought him nearly infinite financial rewards. Yet, despite being one
of the richest men in the world,* what is most interesting about the guy is not
his money. Here are a few ways he might surprise you.
1: Buffet
Has Not Always Been Wealthy- Warren grew up during the Great Depression and it
left a lasting impression on his psyche. He felt firsthand the gnawing, crippling effect
that a downed economy can have on people and a country. Since then he seemed
driven to seek out business opportunities. He delivered
papers, sold bubble-gum, Coca Cola and even bought pinball machines. One of his
most memorable jobs was at his uncle’s grocery store. It was here that his
uncle taught Warren the importance of saving and had a lasting impression on
him and his future business partner Charlie Munger. At 11, Warren made his first
stock purchase and the world has never been the same since. |
| Buffet and Graham |
3 Buffet Is Not Naturally Frugal- Buffet throughout his early years and much later was extremely, famously frugal. He is legendary for driving a used VW beetle and buying a used Cadillac even though he was able to afford a new one. His children didn’t know what he did for work to the point where his daughter mistakenly told her class their dad was a security guard. He continues to live in the same house that he bought in 1958 for $31,500. While his frugality might just seem like an odd personality quirk, the real reason he was so frugal is because he really believed he had to be. Even up until 1980, he openly questioned whether his company after all their much blood sweat and tears had done more than kept pace with the value of gold.[3] He knew all too well the business risks involved and he still honestly did not know if he would make it until much later in his career and at which point his frugal habits had become a part of him.
4 Buffet is Not The Most Talented Money Manager Alive - Buffet was anything but a genius when he started out and even now, it’s not his brilliance that makes him unique but his perseverance and unique combination of CEO and money manager. He started out buying textile factories which were largely economic mistakes and even after experiencing years of lackluster performance he stubbornly stuck to it and as he relates jokingly “in a rare burst of brilliance I went out and bought another textile factory.[4]” Before he perfected his investment technique he tried and failed investing in aluminum and acknowledges the low returns on his attempt at investing in airlines.
Besides Buffet’s mistakes, Warren recognizes that the GEICO money manager Lou Simpson often outperformed his own investments. There are examples of other fund managers like John Neff
who have long successful records but usually while was working for others. What’s different about Buffet is unlike Lou
Simpson or John Neff, Buffet is putting his own money in along with his
partners’ and has consistently stuck with it longer than anyone. He follows the example
of one of his store owners Rose Blumkin who continued to work well past her
90’s and they both had the attitude that you die when you stop working.
In addition to his long lasting investing
career, Buffet acts both as CEO and yet still think like an investor. There might be better investors out there and many more talented CEO’s, it is
very rare to find the head of a company who is also great at re-allocating cash the business
produces. Buffet’s combination of both CEO and financial advisor is partly why Berkshire
Hathway operates with minimal corporate staff and because he continues to
reinvest the proceeds at high returns, his company is able to grow at an
extremely accelerated pace.
5 Buffet Doesn't Actually Love Money- Lastly and what is most striking about
Buffet is that he can do high level managerial skills yet still relate to
people he grew up with. According to his own family, money hasn’t really changed Buffet on a fundamental
level.[5] His definition of success is "being loved by the people you hope love
you." When I look around, I often see people who drastically change their
habits and feel the need try to improve their lifestyle when that start making a lot less money than Warren Buffet. In a modern world of flaunting wealth I think we need more Buffet-ness. Bufffet completely cemented his greatness in 2006 when he committed to giving 85% of his wealth to the Bill and Melinda Gates foundation. While there have been major philanthropists before Buffet, (he and Bill Gates have been been compared to Dale Carnegie and John Rockafeller) few have done it in such extremes and influenced so many other wealthy individuals in the process. George Washington was said to be greatest man who ever lived because he was able to lead an army and gain their trust yet not be swallowed by that power when he turned it over to congress. Buffet has similarly shown such mastery with the market, being able to command more of it probably that anyone alive and then turn it over to philanthropy. Buffet demonstrates the great paradox about money that the more you are able to emotionally detach, the better you are at handling large amounts of it. As I take and honest look at myself and others I sometimes wonder if we all could do the same.
*After promising much of his money to the Bill and Melinda Gates Foundation Buffet’s ranking on Fortune’s list has lowered while Gates has shot to the top. If you consider the donation to the foundation still as part of Buffet’s wealth Buffet could definitely be considered the richest man alive.
[2] Letters 1995
[3] Letters 1979
