Last week, I highlighted a lot of Warren’s wisdom gathered over the years, this week are insights on what makes Warren Buffett tick, his character, salesmanship, and management.
I’ve split up my insights of the book into 4 parts:
Part 1 - Wisdom/Advice (https://kobekoto.com/blog/snowball-warren-buffett-summary/)
Part 2 - Personality Traits
Part 3 - Financial/Investing Insights
Part 4 - Warren’s Social Circle
All quotes are by Warren Buffett unless otherwise mentioned.
Focus and Obsession
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Warren “was a very focused person. He could focus like a spotlight, 24 hours a day almost, 7 days a week almost. I don’t know when he slept.” - Warren’s college buddy
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“I was the only one who ever showed up at those places. They never even asked if I was a customer. I would get these files that dated back 40 or 50 years. They didn’t have copy machines, so I’d sit there and scribble all these little notes, this figure and that figure.”
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“I went through the Moody’s Manuals page by page. 10,000 pages in the Moody’s Industrial, Transportation, Banks, and Finance Manuals - twice. I actually looked at every business - although I didn’t look very hard at some”.
Work Habits Leading To His Success
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Buffett put in the work:
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He read magazines like the Progressive Grocer to learn how to stock a meat department.
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He spent months reading old newspapers dating back a century to learn the cycles of business, the history of Wall Street, the history of capitalism, the history of the modern corporation.
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He analyzed economic statistics until he had a deep understanding of what they signified.
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Since childhood, he had read every biography he could find of people he admired, looking for the lessons he could learn from their lives.
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He attached himself to everyone who could help him and coattailed anyone he could find who was smart.
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He ruled out paying attention to almost anything but business - art, literature, science, travel, architecture - so that he could focus on his passion.
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He never stopped thinking about business: what made a good business, what made a bad business, how they competed, what made customers loyal to one versus another.
“20 Punches” Approach To Investing (AKA No Dabbling)
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“You’d get very rich if you thought of yourself as having a card with only 20 punches in a lifetime, and every financial decision use up one punch.
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You’d resist the temptation to dabble. You’d make more good decisions and you’d make more big decisions.’
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This is what he ran his life on, no desire to buy and sell real estate, art, cars, tokens of wealth, no jumping from city to city, career to career.”
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Some of that was easy for a man so certain of himself. Some of it came with being a creature of habit.
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Some of it was a natural tendency to let things compound, and some of it was the wisdom of inertia
Salesmanship
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He started to radiate a presence in public. He displayed an authority, an almost electric charge of energy, that radiated to an audience. He just used to ooze that stuff wherever he went.
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He raised money for his new firm as fast as he could talk.
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Instead of asking for a favor, he was granting one people felt indebted to him for taking their money. Making people ask for him to invest their money put him psychologically in charge. He would come to use this technique often, in many contexts, for the rest of his life.
Management Style
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“Praise by name, criticize by category” - Buffett’s rule.
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The role of Gladys Kaiser (his personal secretary) - she dispatched paperwork, phone calls, bills, and nonsense with brisk efficiency. She kept Buffett off-limits to everyone, including at times, his family.
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Buffett was a likable boss who
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Never lost his temper
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Never changed his mind suddenly,
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Never said a rude word to anyone
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Never berated or criticized his employees
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Didn’t second-guess people on their work
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Let them do their jobs without interference.
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His trick of management was to find obsessed perfectionists like himself who worked incessantly.
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Buffett’s long-used technique of criticizing by withholding attention
Weaknesses
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Buffett’s weakness - if he felt he needed something, he needed it, and that need must be satisfied. He did this without any apparent malice or arrogance.
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Buffett dreaded confrontation. His first instinct was to avoid it and he ran if anyone threatened to explode at him the way his mom did. He had learned to shut down emotionally in the face of a possible eruption.
Personal Interests
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Buffett three roles invariably interested him:
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The first was the relentless collector, expanding his empire of money, people, and influence.
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The second was the preacher, sprinkling idealism from the lectern.
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The third was the cop, foiling the bad guys.
- The perfect business would allow him to do all of these at once: preach, play cop, and ring the cash register. The perfect business was a newspaper.
Love Of Journalism
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Buffett said that if he had not become a money manager, he would have pursued journalism as a career.
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Buffett’s dream was to be not just an investor but a publisher - to have the influence that went with owning the means through which the public learned the news.
Personality Traits
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“Buffett is not a simple person, but he has simple tastes”
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His genial manner, self-deprecating wit, and air of calm put people at ease.
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He had shed some of his earlier gracelessness and most of his arrogance along with the more obvious signs of insecurity - though his tolerance for criticism had not increased.
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He showed great loyalty to longtime friends.
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He was prone to deluging his friends with mountains of clippings and reading material that he thought would interest them.
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Friends on Buffett: “He’s the master of win/win...but he never does anything that isn’t a win for him.”
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Warren Buffett was a man who loved money, a man for whom the game of collecting it ran in his veins as his lifeblood.
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The passion for getting rich lent him the dignity to face years of almost intolerable criticism without counter attacking during the Internet Bubble.
Side Effects of Intensity
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Errors of omission in personal life - inattention, neglect, missed chances - were always there, the side effects of intensity.
Family Life
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In relation to Susie, her husband wasn’t lacking in emotion, he was just cut off from his own feelings.
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Buffett tried to control his children with money yet never spent any time teaching them about money. It might seem odd, but it was the same story as with his employees. He felt any smart person could figure it out.
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He handed the kids their Berkshire stock without stressing how important it might be to them someday, explaining compounding, or mentioning that they could borrow against stock without selling it.
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Each of the kids knew not to expect financial help from him except to pay for their education.
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He was willing, however, to make financial deals with family members to manage their weight.
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His children - He was determined to manage their expectations about money, in order to ensure that they would find their own way in life.
Inherited Wealth
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Unearned position, inherited wealth drove Buffett crazy, offended his sense of justice, and disturbed his sense of the universe’s symmetry.
Natural Tendencies
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Buffett natural tendencies lean towards honesty:
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rectitude
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the urge to preach
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openness, integrity, extreme honesty
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He was a born collector, from license plates to coins, to stamps
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Buffet had a passion for detail and would forever go to extremes to control his overhead by paying for expenses in ways that could be shut off as needed or could be covered in ways that made them effectively free.
Being A Shark In Uncertain Times
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Berkshire’s best opportunities always came at times of uncertainty, when others lacked the insight, resources, and fortitude to make the right judgements and commit.
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“Cash combined with courage in a crisis is priceless.”