One of Buffett’s defining characteristics is that he so clearly lives by his own inner scorecard.
It isn’t just that he does what’s right, but that he does what’s right for him. As I saw during our lunch, there’s nothing fake or forced about him. He sees no reason to compromise his standards or violate his beliefs. Indeed, he has told Berkshire’s shareholders that there are things he could do that would make the company bigger and more profitable, but he’s not prepared to do them. For example, he resists laying people off or selling holdings that he could easily replace with more profitable businesses. Likewise, some investors have complained that Berkshire would be much more profitable if he’d moved its tax domicile to Bermuda as many other insurers have done. But Buffett doesn’t want to base his company in Bermuda even though it would be legal and would have saved tens of billions in taxes.
This was one of the greatest lessons of our lunch. His strength comes in part from this rock-solid sense of who he really is and how he wants to live. There’s no artifice. No need to live according to other people’s standards or opinions. Sitting with him at Smith & Wollensky, I could see that he makes no compromises in terms of his own happiness — even in something as small and insignificant as his gleeful enjoyment of the restaurant’s desserts. Clearly, he has set up his life so that it suits him and so that he enjoys it. When I asked if he had consciously created Berkshire’s unique decentralized structure, he emphasized that it operates that way because it suits his personality, not because it maximizes returns.
As an investor, he has always remained true to himself. During the tech bubble, when so many other people got carried away, he had no trouble sticking to his principles, even though this meant that he massively underperformed the market before it imploded.
...One of the key lessons of our lunch came when Mohnish asked what had become of Rick Guerin, a friend of Buffett’s whom he had mentioned in his article on “The Superinvestors of Graham-and-Doddsville.” For a while, Guerin’s investment record had been spectacular. But Warren told us that Guerin had been “in a hurry to get rich” and had used leverage to juice his returns. When the market crashed in 1973-74, Guerin was hit hard and was forced to sell various holdings, including thousands of shares of Berkshire Hathaway that would now be worth a fortune.
For Warren, the travails of this investor clearly provided a powerful example of the perils of debt and virtues of patience. “Charlie and I always knew we would become very wealthy,” he told us, “but we weren’t in a hurry.”...
It helps that Buffett has created a peaceful environment for himself in which he can operate calmly and rationally. By staying in Omaha, he has remained far from the madding crowd. His legendary personal assistant Debbie Bosanek (who has worked at Berkshire for more than three decades) also helps to shield him from unnecessary distractions. She once told Mohnish and me that Warren usually keeps his cell phone switched off and doesn’t even have an email address. The fact that he has the right filters clearly helps him to guard against letting in the wrong type of information.
...Similarly, he chooses not to fill his days with distracting meetings... Buffett has chosen a system that suits him perfectly, giving him the latitude to think in peace, impervious to the noise that tends to dominate Wall Street.
We at Outlookindia.com welcome feedback and your comments, including scathing criticism
1. Scathing, passionate, even angry critiques are welcome, but please do not indulge in abuse and invective. Our Primary concern is to keep the debate civil. We urge our users to try and express their disagreements without being disagreeable. Personal attacks are not welcome. No ad hominem please.
2. Please do not post the same message again and again in the same or different threads
3. Please keep your responses confined to the subject matter of the article you are responding to. Please note that our comments section is not a general free-for-all but for feedback to articles/blogs posted on the site
4. Our endeavour is to keep these forums unmoderated and unexpurgated. But if any of the above three conditions are violated, we reserve the right to delete any comment that we deem objectionable and also to withdraw posting privileges from the abuser. Please also note that hate-speech is punishable by law and in extreme circumstances, we may be forced to take legal action by tracing the IP addresses of the poster.
5. If someone is being abusive or personal, or generally being a troll or a flame-baiter, please do not descend to their level. The best response to such posters is to ignore them and send us a message at Mail AT outlookindia DOT com with the subject header COMPLAINT
6. Please do not copy and paste copyrighted material. If you do think that an article elsewhere has relevance to the point you wish to make, please only quote what is considered fair-use and provide a link to the article under question.
7. There is no particular outlookindia.com line on any subject. The views expressed in our opinion section are those of the author concerned and not that of all of outlookindia.com or all its authors.
8. Please also note that you are solely responsible for the comments posted by you on the site. The comments could be deleted or edited entirely at our discretion if we find them objectionable. However, the mere fact of their existence on our site does not mean that we necessarily approve of their contents. In short, the onus of responsibility for the comments remains solely with the authors thereof. Outlookindia.com or any of its group publications, may, however, retains the right to publish any of these comments, with or without editing, in any medium whatsoever. It is therefore in your own interest to be careful before posting.
9.Outlookindia.com is not responsible in any manner whatsoever for how any search engine -- such as Google, Bing etc -- caches or displays these comments. Please note that you are solely responsible for posting these comments and it is a privilege being granted to our registered users which can be withdrawn in case of abuse. To reiterate:
a. Comments once posted can only be deleted at the discretion of outlookindia.com
b. The comments reflect the views of the authors and not of outlookindia.com
c. outlookindia.com is not responsible in any manner whatsoever for the way search engines cache or display these comments
d. Please therefore take due caution before you post any comments as your words could potentially be used against you
10. We have an online thread for our comments policy:
You are welcome to post your suggestions here or in case you have a specific issue, to directly email us at Mail AT outlookindia DOT com with the subject header COMPLAINT