Lot of people recognize or use Warren Buffet's name, majority knows him as one of the wealthiest man alive. I thought i will add why I personally admire him.
To start, it's not because he is one of the wealthiest man in world, there are plently of other super wealthy whom I don't admire or I don't care. In case of Warren Buffet, it adds credibility and shows that what he does works (really well)!!
I admire Warren Buffet because ...
- His records are proven over a long period of time (50+ years) and not a one time 'lucky' phonomemon.
- His principles are simple to understand (didnt say easy to follow :-) ). You don't have to be a genius to understand it.
- He is open in sharing his investment principles and what worked for him. There is no secret trading platform or investment armies with complex trading algorithms.
- He admits his mistakes!! Refer to his annual shareholders letter, latest available here
- His principles are rational and makes sense!! E.g: "Be greedy when others are fearful and be fearful when others are gready", "The more number of decisions you make, the more chances of mistakes", "Price is what you pay. Value is what you get", and many more...
- Does not prefer loosing sleep (risk) for few extra $$.
- Very modest salary of $100,000 for a corporation with its size and profit. And unlike Wall Street CEOs who earns 1$ salary and multi millions in stock option and other benifits, he does not have a stock options.
- He treats his shareholders are partners, and candidly discuss his objectives and why he does certain things in certain ways. His shareholder's handbook is a great read.
- His way of managing his companies (80+) is different. He Identifies/acquires talent/companies and give them freedom to do what they are good at and continue to grow business. Does not interfere in day to day activities of his CEOs. Does praise his managers indivudiually, openly often in his meetings and letters.So, most of the owners/CEOs continue to work for him after Bershire buys the business from them.
- Allocates capital the most efficient ways.
- Manages Risk better than pretty much anybody!! Read last year's shareholder letter where he states that risk management is CEO's responsibility and not that of a Risk Manager's or that of a committee's job.
- He does not claim that he knows the future in short term. Unlike many others, who claims that they can predict S&P accurately for next week and month, he says he CAN'T predict future in short term.
- Lives a modest life inspite and extreme wealth and success.
- Donated most of his wealth to charity. That too, he didnt set up a new charity in his name, instead found the best available (Bill Gates) and allocated his wealth to their charity.
- He made his wealth by investing in capital markets, which is an area of interest to me.
Above all, I personally find that his principles makes sense to me and that is something I can follow. And it worked for me in past and continue to works for me!!! Inspite of all these, I am not saying he is perfect and not human!!
My earlier posts about Buffet can be viewed here
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* Beta version, started on Jan/2010 as an trial. Currently contains very limited data. Read more about this chart in the post
Monday, March 29, 2010
Why do I admire Warren Buffet?
Posted by George at 2:57 PM
Labels: Buffet, Investor Education
5 comments:
- income.portfolio said...
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one thing that i like about him is, almost all of his personal networth is tied to BRK. So if his partners lose, he also looses in same proportion.
Not like other fund managers, who are hell bent on taking fees and bonus, but not putting their own money into their own funds. - March 30, 2010 at 10:32 AM
- George said...
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Hi TIP Guy,
Yes, that is so true. More over, he never sold a single share till now.
Interesting to compare that with Lehman's management. (My earlier post)
http://www.rationalportfolio.com/2010/03/warren-buffets-lehman-analysis.html
George. - March 31, 2010 at 11:50 AM
- Milind said...
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Create your own fan followings, and win attractive cash rewards of Rs. 100,000. - April 27, 2010 at 8:28 AM
- Mariusz Skonieczny said...
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Buffett is definitely special. A lot of people like you and I can relate to him. He tries to live just like we do.
- May 31, 2010 at 3:23 PM
- Anonymous said...
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is this blog pretty much dead now? no updates
- July 16, 2010 at 10:58 PM