These are 10 highlights of “Becoming Warren Buffett” which was broadcast on HBO on January 30, 2017 from 10:00 p.m. – 11:30 p.m.
(1) Warren Buffett considers himself to be very lucky by winning the “ovarian lottery” with 40:1 odds against being born in the United States (August 30, 1930), and 80:1 odds against being born in the U.S and being male (“sky is the limit”career opportunities).
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
(2) He was also very lucky to marry Susan Buffett (major “turning point” in his life.)
(3) “Compounding” is the 8th Wonder of the World. By waiting until late in life (2006 at age 76) to donate over 99% of his wealth, compounding has resulted in a substantially larger amount to give back to society. As of 2016, Warren Buffett has already contributed $24 billion to charities (primarily to the Bill and Melinda Gates Foundation) and his remaining wealth to be contributed to charities in the future is valued at over $63 billion.
(4) Using a baseball analogy from Ted Williams, Warren Buffett will swing at a pitch (invest in a stock/company) only if it is in his “sweet spot” (high probability of success). Even though Berkshire Hathaway is highly liquid ($85 billion in cash), Buffett is very patient. Berkshire Hathaway’s shareholders are long-term investors who generally plan to hold their shares “for a lifetime”.
(5) Buffett has simple tastes and is living in the same house since 1958. “Money is a scorecard.” Investing is a level playing field where everyone else can read the same thing that he reads. Buffett spends 5 – 6 hours a day reading and is very competitive.
(6) Both Warren Buffett and Bill Gates (Microsoft) attribute the same word to their success … “focus”.
(7) Before meeting Charlie Munger, Warren Buffett invested in “fair companies at wonderful prices”. Munger taught Buffett to invest in “wonderful companies at fair prices.”
(8) Ben Graham (Columbia University) taught Warren Buffett: “Rule 1 – Never Lose Money”, and “Rule 2 – Never Forget Rule 1”.
(9) In 1991, Warren Buffett saved Salomon Brothers from bankruptcy after a Treasury Bond trading scandal by making the case to Treasury Secretary Nick Brady that not only would 8,000 jobs be lost at Salomon, but its failure could “take Wall Street with it”.
(10) Warren Buffett’s ambition in life is to be a teacher. The right job for each person is the one you would pick if you did not need a job.