Warren Buffett Unplugged: What I learnt from the Sage of Omaha

 

“Price is what you pay. Value is what you get.”

-Warren Buffet

Warren Buffett Secrets

The advent of the 21st century has brought in a mad frenzy to make huge sums of money and this has increasingly led to the disparity between the rich and the poor. In fact, many people are questioning whether the concept of healthy capitalism exists anymore at all. However despite all its critics, capitalism has a strange champion. One, who through his strict adherence to his values and simple yet, powerful thinking has managed to remain one of the most wealthy and successful men on earth : Warren Buffet.

Warren Buffet stands out from all the other Gods of the business world due to his approach to life and his insistence on what he calls ‘Creating Value’. Buffet advises that any person is sure to achieve success in fields where his natural strengths are used. Buffet calls this using the ‘Circle of Competence’  rather than frittering one’s energies trying to follow the latest trends.

Listed here are  some insights and principles which have helped me over the years:

Personal Philosophy  – The Inner Scorecard Principle

The Inner Scorecard principle stresses the importance of being the best at what you do even if no one around you appreciates you immediately for it. It says consistency of quality and excellence in actions are bound to bring superior and sustainable results in the future. The challenge is to continue doing what you do even if it appears to not produce any results.

Rodin Thinking Man

Buffet asks “Would you rather be the world’s greatest lover, but have everyone think you are the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover?”

My approach to my career and business life derives heavily from this personal philosophy of Buffet. In fact, my decision to join a B-School did not come till I had discovered my strengths as a communicator.  My past decision to quit a lucrative software job to pursue a career in Training which offered a relatively low salary was largely driven by Buffet’s Inner Scorecard principle. And I am confident, as I see my life moving in the direction I always wanted, that it was the right decision to make.

Wealth Decisions -Value Investing

Wealth

Another principle of Buffet which I love is the concept of ‘Value Investing’. Buffet learnt it from his mentor Benjamin Graham and he claims this is what helped him get to where he is now. Value Investing is a concept where one identifies a firm’s intrinsic value before investing in it. This often involves buying stocks which might not be the best performers according to the so-called experts.

This concept can be extended to our decision making as most often, we take them without estimating their true value. It has helped me realize that focusing on short term gains might cause more harm than good.

Brand Building: Patience and Integrity

Brand Building

Warren Buffet feels that the most valuable quality in an investor is Patience. He says, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” There have been numerous instances when impatience has hampered my chances at success and I have found that most of the times, patience combined with perseverance carries a person through both business and life.

Another quality which stands out in Buffet is his integrity. He once famously said,” If you have the highest intelligence and ambition but no integrity, I would not even consider you as a candidate for my firm”.

My way of adopting this into my life is to be as honest and transparent as possible in all the things that I do. His message has also inspired me to share my learnings and insights with others. Even if it helps one person in his lifetime, I would consider my life well-lived. And I am confident that if I adhere to Buffet’s principles, I do not have to worry about being caught wrong-footed.

Career – Seek The People/Companies You Admire

I intend to follow through with Warren’s advice on career. He says “People ask me where they should go to work, and I say work for whom you admire the most. Do what you love, and work for whom you admire the most and you’ve given yourself the best chance in life you can”.

Career Goals

After B-School when most people would choose to seek the highest paying companies, this helped me stay grounded. I had made up my mind to work for firms which are known for its integrity and loyalty to its shareholders. This helped me stay away from the greed for joining firms which offered huge starting packages but were not great on fairness and ethics.

Well-Being – Give Back what You Receive

Warren Buffet’s philosophy of restoring the balance in the universe by giving wealth to charitable causes really strikes a chord with me. And he is the only multi billionaire who has pledged to give 90% of his wealth in charity. He says that unless people learn to give back what they have in abundance, they will never evolve as human beings.  It is this combination of down-to-earth thinking and profound wisdom which makes him a role model for millions of people.

All in all, Warren Buffet has emerged as the world’s greatest investor and to me one of the best human beings because of his approach to life. His quote sums up his conservative, yet sound thinking which embodies his typical wit and attitude to life:

Warren Buffett Press

“If a genie appeared and gave you the car of choice (and you love cars), but there is a catch, it is the last car you get in your life. What will you do with it? You’ll read the manual five times, keep it in the garage, fix the least little dent etc… ” this is exactly the position you are when it concerns your mind and body. You only get one mind and one body, and it’s got to last a life time… it’s what you do right now that determines how your mind and body will operate ten, twenty, thirty years from now” 

The importance of being healthy is much more applicable to our generation than it was before. With all the stress and strain of our daily routine, few of us dedicate time to replenish our mind and pay attention to our bodies. All the running around will do you no good if you are unable to enjoy the fruits of your labour after 20 years.

I hope these principles help you too and make you healthy, wealthy and wise!

Cheers!


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