Wisdom from Warren Buffett

Recently I posted the latest in a series of articles referencing elite sports and leadership, featuring this quote from John Wooden :

“Success is peace of mind, which is a direct result of self-satisfaction in knowing you made the effort to become the best of which you are capable.”

Success is peace of mind. Wisdom.

Now, one might counter that peace of mind is all well and good, but the most conventional measures of success for business leaders are about money.

In the short to medium term such monetary measures can be measured in revenue, profit and other related metrics, including market price (and don’t get me started on the intrinsic value, or absence thereof!) of the likes of Bitcoin, Uber and more!).

In the long run, though, I quote Benjamin Graham, author of “The Intelligent Investor”, still, many decades later, a bible for so many.

‘In the short run, the market is a voting machine but in the long run, it is a weighing machine.’

In other words, ignore stock market swings, in the end, the intrinsic underlying value of any business will be what counts. Concentrate on building value, in other words.

In that long run, the most successful investor in my lifetime also worked under Benjamin Graham at the start of his career. He has built a business based on that principle and it has rewarded shareholders most handsomely indeed for around 60 years now.

His name is Warren Buffett. He is 87 years old, and, as he says “I intend to retire five or ten years after I die”. A Modern Elder indeed !

I’ve closely followed Buffett for about twenty years myself, reading voraciously around his career, his business, and particularly all of his many annual letters to shareholders. You may find those at BerkshireHathaway.com and they are wonderful reading.

(Oh, do go to that site for a moment anyway. This business is value at around $500 billion and a website could be build for under $100 that looks slicker than they have. Substance, not form!)

So, back to Coach Wooden for a moment. Success is peace of mind. Now what about peae of mind and Warren Buffett ? In “Smashing Paradigms – Stop the “Busyness”” I wrote about how he is not “busy”. He prefers free time to read, think, rest. He always has. He doesn’t clear a barrage of emails, instead he reads about five hours per day.

Peace of mind for Buffett AND and a stratospheric company valuation. Perhaps we can learn from him ? Some quotes from the man himself, allied with thoughts from me  :

“Be fearful when other are greedy, and greedy when others are fearful”

Know the intrinsic value of investments you hold are those you are considering buying, then trust yourself.

“If you were the golf manager and you hired Palmer and Nicklaus, why would you waste your time telling them how to swing”

All the CEOs Buffett has run his many companies are people he likes and admires, who are deeply knowledgable about the businesses they run. He then trusts them.

As I would say, “coach, don’t play”. Empowered leadership works, so his numbers tell us !

“Lose money for the business and I will be understanding. Lose reputation and I will be ruthless”

To Buffett, culture is EVERYTHING. I’ve read many books about Buffett. The one that gave me the biggest light bulb moment was this one. For all the numbers that Buffett and his people crunch on intrinsic value of investee businesses, the secret sauce of his business is Culture.

BRK beyond buffett

In addition to the annual letters and Cunningham’s book, the one biography that rings the most true (and is a terrific read) is this one, as Alice Schroeder had a long standing relationship with Buffett as a journalist he trusted and respected, so she has full access and also wrote from a space of deep knowledge :

snowball buffett