A Day with The Oracle of Omaha

Warren Buffett

On December 1, 2017, a group of Fuqua MBA students traveled to Omaha, NE to visit with legendary investor Warren Buffett and tour some of Berkshire Hathaway’s portfolio companies. Fortunate to attend, I found the experience profoundly inspiring and incredibly refreshing. At 86 years young, Warren was equal parts insightful and hilarious.

Here are some of the most interesting topics discussed during our extended Q&A session:

Investing

  • “Buy businesses that are so good, that even an idiot could run them (because they eventually will)”
  • “When we buy something, it’s for keeps”
  • “Only do friendly deals”
  • “I’m not afraid to pass on companies that I don’t understand”
  • “The right time to swing is when you can’t resist swinging”
  • [In reference to Berkshire’s recent airline investments] “Sometimes things change”
  • “Better to invest in good businesses, as they typically get bigger and dwarf the smaller losers over time”
  • “Cash is terrible” [prefers to invest in T-bills than keep cash on the sidelines]
  • “Having lots of cash can make you very uncomfortable”
  • “You don’t need to make a lot of decisions in investments to make a lot of money”
  • “Fear heads for the door in a mad pack, while Confidence comes back slowly one at a time”
  • [On risk evaluation] “Sigma’s don’t belong in investing”
  • “In investing, personal temperament is more important than IQ”

Career Advice

  • “Take the job that would you want if you didn’t actually need a job”
  • “Don’t work for a person that you don’t admire”
  • [For students looking to begin a career in investment management] “start by creating an audit record of your investments or get a job, with significant responsibility, working for a successful person”
  • “Ben [Graham] didn’t hire me when I first approached him”
  • “Find the job that you’re not going to want to retire from at 65”
  • “Work backwards, starting from where you really want to end up, in order to figure out how to get there”

NFM

Management

  • “I have no age biases in management — young or old — and believe in giving people lots of responsibility”
  • “Hire people who are high quality, classy folks”
  • “It’s harder to maintain discipline at a prosperous business”
  • “You have to find people who have an allegiance to the ‘bigger idea'”
  • “When our managers are in it for the money, we lose”
  • “I want the guy who loves his business”
  • “Don’t be on the comp[ensation] committee… trust me”

Technology / Innovation

  • “Disruption is going to be here forever… you should get on your knees every night and pray that it continues”
  • “Newspapers no longer offer much essential information, with the exception of the obituaries” [noted that he reads five different daily newspapers every morning]
  • [Warren’s response to friend Bill Gates telling him to use Bing] “Bing: But It’s Not Google”

Borsheims

Politics

  • “I don’t worry about America”
  • “After the election last November, we were buying the same stocks as we were before the election”
  • Views weapons of mass destruction (WMD) as a greater risk than climate change “by far” — although climate change is indeed happening, Warren believes that it’s something that “we can figure out” and it’s “not a short term factor for Berkshire today”
  • “The world is becoming increasingly specialized… a system left unchecked will continue to shower rewards on those with special skills”

Education / Teaching

  • “You become a teacher the moment that your child is born”
  • “The only thing that hasn’t benefited from the massive rise of technology is education”
  • [On what classes he would offer if designing an MBA investment program] “You only need two classes: 1) How to think about markets, and 2) How to value a business”
  • Warren noted that although he “didn’t enjoy the grading aspect”, he still loves to teach

Life / Family

  • “You probably only live once”
  • “Who you pick as your hero is enormously important in life” [went on to name his father and Tom Murphy (Capital Cities) as two of his own heroes]
  • “As Charlie [Munger] often says, ‘there are only three things in this life that can ruin you: liquor, ladies, and leverage'”
  • “Good habits are really important”
  • “1) Get rid of high cost liabilities [i.e. credit card debt] and 2) read The Intelligent Investor by Ben Graham”
  • “Who you hang out with is enormously important” [then noted that he was in a gang at age 13]
  • “You need a lot of human interactions to gain insights”
  • “Try to marry someone who is better than you are… I understand that there is a statistical problem with this”
  • “The most important job that you’ll have is raising a child”
  • “You really want to write your own obituary as you go through life”
  • “You only have to get rich once”

OTC

 


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