I love Warren Buffett.
I have long admired his prowess as an investor, but, like so many of his fans, I have especially appreciated the way he shares his investing strategies through simple stories and humor – especially the humor. (Anyone who frequently incorporates sexual metaphors to explain his thinking and quotes Woody Allen, Mae West, and Gypsy Rose Lee in his shareholder letters is alright in my book!)
A couple of years ago, my son had the opportunity see Buffett in a public appearance at Ohio State University. I had no idea if he would like what Buffett had to say, but I was happy that he was going to give it a try.
“Buffett is a beast,” was the text I got from my son later that night. It was a compliment of the highest order from an 18-year old.
His text continued: “My favorite quote was ‘I try to buy stock in businesses that are so wonderful that an idiot can run them… because sooner or later, one will.'”
Hilarious. Brilliant. And simple.
Yes, Buffett is a beast. And, though so much has already been written about him, and though so many of his quotes and stories have already been famously repeated by so many people, I nevertheless would like to share some of my favorites…
“R.C. Willey is an amazing story. Bill took over the business from his father-in-law in 1954 when sales were about $250,000. From this tiny base, Bill employed Mae West’s philosophy: ‘It’s not what you’ve got – it’s what you do with what you’ve got.’ “
“Would you like, publicly, to be considered as the best lover in the world, but privately know that you are the worst?
Or, would you rather be considered publicly to be the worst lover in the world, when privately you know that you are the best?”
“Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you.
You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.”
“We continue, however, to need ‘elephants’ in order for us to use Berkshire’s flood of incoming cash. Charlie and I must therefore ignore the pursuit of mice and focus our acquisition efforts on much bigger game.
Our exemplar is the older man who crashed his grocery cart into that of a much younger fellow while both were shopping. The elderly man explained apologetically that he had lost track of his wife and was preoccupied searching for her.
His new acquaintance said that by coincidence his wife had also wandered off and suggested that it might be more efficient if they jointly looked for the two women.
Agreeing, the older man asked his new companion what his wife looked like. ‘She’s a gorgeous blonde,’ the fellow answered, ‘with a body that would cause a bishop to go through a stained glass window, and she’s wearing tight white shorts. How about yours?’
The senior citizen wasted no words: ‘Forget her, we’ll look for yours.’ “
“The attitude of our managers vividly contrasts with that of the young man who married a tycoon’s only child, a decidedly homely and dull lass.
Relieved, the father called in his new son-in-law after the wedding and began to discuss the future: ‘Son, you’re the boy I always wanted and never had.
Here’s a stock certificate for 50% of the company. You’re my equal partner from now on.’
‘Now, what would you like to run? How about sales?’
‘I’m afraid I couldn’t sell water to a man crawling in the Sahara.’
‘Well then, how about heading human relations?’
‘I really don’t care for people.’
‘No problem, we have lots of other spots in the business. What would you like to do?’
‘Actually, nothing appeals to me. Why don’t you just buy me out?’ “
“An observer might conclude from our hiring practices that Charlie and I were traumatized early in life by an EEOC bulletin on age discrimination.
The real explanation, however, is self-interest: It’s difficult to teach a new dog old tricks. The many Berkshire managers who are past 70 hit home runs today at the same pace that long ago gave them reputations as young slugging sensations.
Therefore, to get a job with us, just employ the tactic of the 76-year-old who persuaded a dazzling beauty of 25 to marry him.
‘How did you ever get her to accept?’ asked his envious contemporaries.
The comeback: ‘I told her I was 86.'”
“Life is like a snowball. The important thing is finding wet snow and a really long hill. ”
“As you can see from the two tables, the comparative growth rates of Berkshire’s two elements of value have changed in the last decade, a result reflecting our ever-increasing emphasis on business acquisitions. Nevertheless, Charlie Munger, Berkshire’s Vice Chairman and my partner, and I want to increase the figures in both tables.
In this ambition, we hope – metaphorically – to avoid the fate of the elderly couple who had been romantically challenged for some time.
As they finished dinner on their 50th anniversary, however, the wife – stimulated by soft music, wine and candlelight – felt a long-absent tickle and demurely suggested to her husband that they go upstairs and make love.
He agonized for a moment and then replied, ‘I can do one or the other, but not both.'”
“In the long run, of course, trouble awaits managements that paper over operating problems with accounting maneuvers. Eventually, managements of this kind achieve the same result as the seriously-ill patient who tells his doctor:
‘I can’t afford the operation, but would you accept a small payment to touch up the x-rays?’ “
“No matter how great the talent of effort, some things just take time: you can’t produce a baby in one month by getting nine women pregnant.”
“We must face another obstacle: In a finite world, high growth rates must self-destruct. If the base from which the growth is taking place is tiny, this law may not operate for a time. But when the base balloons, the party ends: A high growth rate eventually forges its own anchor.
Carl Sagan has entertainingly described this phenomenon, musing about the destiny of bacteria that reproduce by dividing into two every 15 minutes.
Says Sagan: ‘That means four doublings an hour, and 96 doublings a day. Although a bacterium weighs only about a trillionth of a gram, its descendants, after a day of wild asexual abandon, will collectively weigh as much as a mountain…in two days, more than the sun – and before very long, everything in the universe will be made of bacteria.’
Not to worry, says Sagan: Some obstacle always impedes this kind of exponential growth. ‘The bugs run out of food, or they poison each other, or they are shy about reproducing in public.’”
“It’s a treacherous business and a wary attitude is essential.
We must heed Woody Allen: ‘While the lamb may lie down with the lion, the lamb shouldn’t count on getting a lot of sleep.‘”
“Currently liking neither stocks nor bonds, I find myself the polar opposite of Mae West as she declared: ‘I like only two kinds of men – foreign and domestic.’”
“Gypsy Rose Lee announced on one of her later birthdays: ‘I have everything I had last year; it’s just that it’s all two inches lower.’ As the table shows, during 1987 almost all of our businesses aged in a more upbeat way.”
“When I was sixteen, I had just two things on my mind – girls and cars.
I wasn’t very good with girls. So I thought about cars. I thought about girls, too, but I had more luck with cars.”
“In fairness, we’ve seen plenty of successes as well, some truly outstanding. There are many giant company managers whom I greatly admire; Ken Chenault of American Express, Jeff Immelt of G.E. and Dick Kovacevich of Wells Fargo come quickly to mind.
But I don’t think I could do the management job they do. And I know I wouldn’t enjoy many of the duties that come with their positions – meetings, speeches, foreign travel, the charity circuit and governmental relations.
For me, Ronald Reagan had it right: ‘It’s probably true that hard work never killed anyone – but why take the chance?’ “
“Charlie doesn’t like it when I equate the jet with bacteria; he feels it’s degrading to the bacteria. His idea of traveling in style is an air-conditioned bus, a luxury he steps up to only when bargain fares are in effect.
My own attitude toward the jet can be summarized by the prayer attributed, apocryphally I’m sure, to St. Augustine as he contemplated leaving a life of secular pleasures to become a priest.
Battling the conflict between intellect and glands, he pled: ‘Help me, oh Lord, to become chaste – but not yet.’”
“Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful.”
Thank you, Warren. You have given us all way too much of a good thing for so many years…
…and yes, it has really been wonderful.