Examining The Buffet Laws Of Success
BY BAYO OGUNMUPE
FIFTY years after founding his company: Berkshire Hathaway, Warren Buffet reigns supreme as the greatest investor in history, with a personal fortune of $70 billion. Berkshire’s latest annual report says its market value has soared by 1,826,200 per cent under his leadership – an astonishing feat that boggles the imagination. Buffet and his partner Charlie Munger are central figures in The Great Minds of Investing, a new book that will be published on Nigeria’s Democracy Day, this month. The book features 33 famous investors along with their portraits by Michael O’Brien, a Bloomberg columnist.
In the book, Mohnish Pabrai said that discovering Buffet changed his life. It inspired him to embark on a 30-year game in which his goal was to turn $1 million into $1 billion by following Buffet’s laws of investing. If you want to be fabulously rich, it clearly pays to study Warren Buffet. But what is extraordinary to me is that Buffet’s wisdom goes so far beyond business and investing. Here are some of my favourite insights from Buffet on how to build a successful and happy life.
One, unconditional Love is Huge in Bestowing you Confidence in This World. In his profile, Buffet speaks of the most important reason for his success, as the love and support he received from his father, Howard Buffet, a U.S. Congressman whom he revered. He said his father believed in him, bestowing in him an unconditional love which boosted his confidence throughout his life.
Two, ‘‘I don’t Work To Collect Money.” This means he isn’t working for gain. He is working because he loves what he is doing. What money has bought Buffet is the freedom to live as he chooses. Three, ‘‘Live your life by an inner scoreboard.” That statement was the advice gained from Buffet in a 2008 dinner with Mohnish Pabrai and Guy Spier. Buffet doesn’t care how others view him, instead he remains true to himself, never compromising his own values.
Four, ‘‘Hang out with people who are better than you.” Another sagacious piece that Buffet shared with Pabrai. Such habits cannot help but improve your fortunes. You are influenced by people around you. If you hang around with pitiable people, pretty soon you will start being pulled in that direction. Thus, the best way is for you to take on the qualities of the people you admire. Imitate your heroes. Buffet’s greatest role models were his father and Benjamin Graham, who taught him in Columbia University and became his mentor.
Five, keep control of your time. Buffet designed his life so his schedule is blissfully uncluttered, leaving him time to read and think without distractions. He is not afraid to say ‘‘No” to interview invitations. Don’t let people set your agenda in life. Six: ‘‘It takes twenty years to Build a Reputation and Five minutes to Ruin it.” Which is why you must tell the truth all the time. Tell the truth in order not to lie to yourself. Make telling the truth a habit and a discipline. This isn’t only the right thing to do, it also works. Sometimes, people can build great careers and enjoy great successes for a time through bluster, bullying, intimidation and slipperiness. But it always unravels. The people who keep being successful year after year are people of deep integrity.
Seven, ‘‘Stick within your circle of competence.” Mason Hawkins, a famous, $32 billion worth investor spoke of Buffet: ‘‘The thing I admire most in him is his passion in knowing where his strengths are and keeping his focus on those strengths.” A good example is his turning over his assets to Bill and Melinda Gates, so he can continue investing and managing his company. Hawkins says glowingly of Buffet’s discipline and clarity of thinking as most exceptional. Buffet’s focusing on his strengths and ignoring everything else, lies at the heart of his success.
Eight, predicting rain doesn’t count, building arks does. An enduring success can be built only on such a concept of safety. In a 1995 speech, he explained that having a margin of safety means always building 15,000 pound bridge if you are going to be driving a 10,000 pound truck across it. To Buffet, this principle applies to every endeavour in life that involves risk. Buffet believes that lasting success depends not just on talent and hard work but on preparing for adversity. The person who builds arks prepares for adversity. Nine, nice people come in all colours. To show his distaste for racism and discrimination, Buffet quit the Omaha Rotary Club in the 1960s because it was racist and discriminatory. Whereas, Buffet routinely entertained blacks at home, the only white millionaire to do so in his lily-white area of Omaha.
Ten, the more you give love away, the more you get.
When you age, you begin to measure your success in life by how many of the people you want their love, actually do love you. This is important because, there are thousands of very rich people nobody loved, despite their generous donations. If by age 70, very rich but nobody loves you, then your life is a disaster. Being loved by everyone around you is the ultimate test of how you have lived your life. That is the measure of your success. The only way to get love is to be lovable. The more you give love, the more love you get. Warren Edward Buffet is the 84-year old American businessman, widely considered the most successful investor of the 20th century. He defied prevailing investment trends to amass a personal fortune of more than $70 billion. Also known as the Sage of Omaha, Buffet was the son of Howard Buffet a member of the United States House of Representatives from Nebraska.
After graduating from the Columbia Business School (M.Sc, 1951) Warren returned to Omaha to create Berkshire Hathaway Incorporated, a textile manufacturer which he turned into a billion dollar company by 1990. Buffet is still alive and winning.