#Warren Buffett

Warren Buffett in the summer of 1998 (from the brilliant joint interview with Bill Gates that I linked to the other day):

They’ve asked us to start out talking, the two of us, about what got us here, but then it’s on to your questions. How I got here is pretty simple in my case. It’s not IQ, I’m sure you’ll be glad to hear. The big thing is rationality. I always look at IQ and talent as representing the horsepower of the motor, but that the output—the efficiency with which that motor works—depends on rationality. A lot of people start out with 400-horsepower motors but only get a hundred horsepower of output. It’s way better to have a 200-horsepower motor and get it all into output.

So why do smart people do things that interfere with getting the output they’re entitled to? It gets into the habits and character and temperament, and behaving in a rational manner. Not getting in your own way. As I said, everybody here has the ability absolutely to do anything I do and much beyond. Some of you will, and some of you won’t. For the ones who won’t, it will be because you get in your own way, not because the world doesn’t allow you.

This point is almost seems too obvious and yet at the same time, too subtle. Both of which are undoubtedly why such a key aspect of life is often overlooked when talking about why someone achieves greatness.

I think the multiples of technology stocks should be quite a bit lower than the multiples of stocks like Coke and Gillette, because we are subject to complete changes in the rules. I know very well that in the next ten years, if Microsoft is still a leader, we will have had to weather at least three crises.

Bill Gates, in a joint-interview with Warren Buffett, in the summer of 1998 — before the Bubble burst, of course.

The whole interview is pure gold.

[via @ElliotTurn]

Noah Buhayar on the news that Berkshire Hathaway likely failed to increase net worth more rapidly than the Standard & Poor’s 500 Index during the past five years:

Missing the mark in the last five years would highlight how difficult the billionaire’s task has gotten with his company’s expansion. Takeovers and stock picks have built Berkshire into a business with dozens of operating units and equity investments valued at more than $100 billion. That means future gains have to be bigger in absolute terms to increase book value by the percentage amounts of years past.

It seems that Warren Buffett is running into the same “problem" that Apple faces. Because they’ve both built such massively successful businesses, they’re nearing the limits of possible growth. They are both true “victims” of their own successes.

Michael Moritz:

Berkshire Hathaway, despite a market value now approaching one quarter of a trillion dollars, is managed from a tiny office with a staff smaller than a soccer team’s starting roster. Buffett is not the slave to a corporate calendar jammed with the humdrum inanities of business life like performance assessments, facilities planning, analyst meetings, compliance training, budget reviews and travel. This leaves him time to read and think so that for Buffett the only real difference between a weekday and the weekend is that for for two days the markets are closed. Buffett is no fan of spreadsheets or reams of analytical mumbo-jumbo. Facts, a pen, a sheet of paper and an agile mind are his tools.

A working style, free of bullshit, to aspire to.

But if you could buy dollar bills for 80 cents, it’s a very good thing to do.

Warren Buffett, talking on CNBC about what Apple should do with its cash. 

Interesting that the advice he gave to Steve Jobs about the cash a few years back was to buy back some Apple stock. Jobs obviously didn’t do that. Now Apple has an insane amount of cash.

Or, in Buffett terms: “They may have too much cash.”

cdixon

cdixon:

The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a…

Fucking brilliant. In the Berkshire Hathaway 2011 annual report, Warren Buffet breaks down everlasting gold bubble.

Ask anyone why gold is so valuable and they’ll immediately tell you that it’s a rare commodity. And that’s true. But beyond its decorative value, which is minimal at best, what value does it actually produce? Very little. 

Well, very little beyond selling it to the next fool who will pay more for it.