Warren Buffett a famous investor who heads the Berkshire Hathaway (BRKA) empire he created, with over $525 billion in assets was not born a billionaire. But he possesses some features which made him become what he is today.
In the 50th annual letter to Berkshire Hathaway shareholders, Charlie Munger, the second-in-command at Berkshire, spoke about one of Buffett's most enduring and important traits that led to his success:
1. Never stop learning
"Buffett's
decision to limit his activities to a few kinds and to maximize his
attention to them, and to keep doing so for 50 years, was a
lollapalooza. Buffett succeeded for the same reason Roger Federer became
good at tennis.
Buffett was, in effect, using the winning method of the famous basketball coach, John Wooden, who won most regularly after he had learned to assign virtually all playing time to his seven best players. ... And Buffett much out-Woodened Wooden, because in his case the exercise of skill was concentrated in one person, not seven, and his skill improved and improved as he got older and older during 50 years."
In other words, Buffett understood what he was good at and kept going constantly developing his skill.
Speaking about himself, Buffet told "I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions, than most people in business. I do it because I like this kind of life."
The conclusion is whether you learn from Buffett or any other famous person - as none of us is perfect, persistent practice will always help take us one step closer.
2. Patience is vital
The world around us is moving at a speed that is truly hard to grasp. But being in a constant hurry may be not the best strategy. Buffett has been in advantage due to his patience. In 2003, he noted:
"We bought some Wells Fargo (WFC) shares last year. Otherwise, among our six largest holdings, we last changed our position in Coca-Cola (KO) in 1994, American Express (AXP) in 1998, Gillette in 1989, Washington Post in 1973, and Moody's (MCO) in 2000. Brokers don't love us."
Now have a look at his remarks in the 2010 letter to shareholders:
"We will need both good performance from our current businesses and more major acquisitions. We're prepared. Our elephant gun has been reloaded, and my trigger finger is itchy."
Moving quickly into something if it's a no-brainer decision and time is of the essence might be valuable. But otherwise, we would all do well to take a step back and exhibit a little more patience.
And that could be patience in buying batteries at the grocery store, or, like Buffett, the company that makes those batteries.
3. Praise people if they deserve it
Warren Buffett is eager to commend the team of managers who surround him.
Or his remarks about Todd Combs and Ted Weschler - who each manage a sizable stock portfolio at Berkshire Hathaway - in the 2013 letter:
"In a year in which most equity managers found it impossible to outperform the S&P 500, both Todd Combs and Ted Weschler handily did so. Each now runs a portfolio exceeding $7 billion. They've earned it. I must again confess that their investments outperformed mine. (Charlie says I should add "by a lot.") If such humiliating comparisons continue, I'll have no choice but to cease talking about them. Todd and Ted have also created significant value for you in several matters unrelated to their portfolio activities. Their contributions are just beginning: Both men have Berkshire blood in their veins."
Or consider his praise for Tony Nicely in 2005:
"Credit Geico - and its brilliant CEO, Tony Nicely - for our stellar insurance results in a disaster-ridden year. ... Last year, Geico gained market share, earned commendable profits, and strengthened its brand. If you have a new son or grandson in 2006, name him Tony."
No matter who we are and how high we stand, we should always take the time to thank the people who helped us get there.
