I highly recommend the new documentary on HBO about Warren Buffett. I watched it recently with friends. As I was typing up my notes, my sister Emily emailed her own. Her notes were so good that I’m sharing them first. Mine are included at the end.
“Becoming Warren Buffett”
Notes from Emily Gray, intended for a private family email, but I’M BLOGGING IT NOW
- Warren Buffet: age 86, net worth $67.3 billion, from Omaha Nebraska
- He stops at McDonalds for breakfast on his 5 minute commute to work
- He has always been competitive and loves to read
- His allowance was a nickel a week, so he started selling Coca-Cola and gum door to door and delivering papers for more money
- Compound interest: Over time it accomplishes extraordinary things. After applying compound interest, Warren’s wealth will be $100 billion
- Berkshire Hathaway, a holding company composed of 70-80 companies, is the 4th largest company in the Fortune 500
- His dad wasn’t worried about money, and instead focused on an inner scorecard
- Warren is a strong advocate that all lives have equal value
- His dad had unlimited confidence in him, even when he screwed up
- Warren didn’t want to go to college – he was doing well selling stocks, but he finished college in 3 years and then applied to Harvard Business School, was rejected, and then went to Columbia Business School in New York City.
- Two Rules of Investing: (1) Never lose money, (2) Never forget rule #1
Value investing = careful scrutiny of a company’s financial statements, and if you bought value it will eventually prove out
- He went through books looking for under valued stocks
- He picked up a romantic date in a hearse once. He owned a half interest in the car and thought it was practical. The date did not agree.
- Turning point of his life was when he met Susie, his eventual wife. It took her longer to realize she was the one for him. He made a sarcastic quip, and she thought, “Who is this jerk?” So she made a sarcastic quip back. Susie’s dad told her Warren had a heart of gold
“The chains of habit are too light to be felt until they’re too heavy to be broken.”
- Warren took a class on public speaking that changed his life. Graduating and improving his public speaking was his proudest accomplishment.
- He didn’t wear glasses at his wedding because he was so nervous and didn’t want to see all the people
- Bought the house he currently lives in back in 1958. They have 3 kids
- His children saw consistency. Like clockwork, his dad would come home from work and they’d eat dinner and he’d sing “Over the Rainbow” before putting the kids to sleep
- Susie was very involved in Civil Rights, and that’s what converted Warren to a Democrat (as well as MLK’s speech)
- He wanted to pile up the money and let his wife spend it running a foundation
“The trick to investing, like baseball, is to wait for the stock/ball in your sweet spot. When people yell “swing!,” ignore them”
- Warren knows his circle of competence and stays within that
- When he felt he was double crossed, he doubled down and bought control of the company trying to cheat him (out of $.125 per share)
- Warren is brutal in scrutinizing his past
“If you’re emotional about investment, you’re not going to do well”
- Warren and Charlie Munger – two old men best friends
- He’s done well by having ethics
- Focus – If he’s interested, he gets really interested
- He likes to work hard and doesn’t care about frivolous things
“Business problems are fun to think about. The hard problems are human problems”
- Geniuses are notorious for being lonely. It’s difficult to connect with Warren on an emotional level. He was blind to what people were doing behind the scenes
- From Susie, “I learned to have my own parallel life that was connected when he was open to connecting”
- Susie left Omaha in 1977 and moved to San Francisco. She realized the money gave her a choice that a lot of people didn’t have
“The biggest thing with making money is time. You don’t have to be particularly smart, but you have to be patient.”
- Susie wanted to give away more money, but the business side that Warren controls says that’s not smart
- Warren usually keeps existing management in place despite his investment in companies
“It takes 20 years to build a reputation and 5 minutes to lose it”
- Celebration is part of what makes people work well together
- As the company got bigger, he continued treating everyone the way he treats his relatives
“Love is a very strange thing, you can’t get rid of it. The more you give out, the more you get back. You try to hang onto it, you lose it.”
- After Susie’s death, Warren decided to give out the bulk of his money to the Gates Foundation (37 billion at one time) and his children’s charities
“If you’re willing to strike out a few times, you can really change something big”
- Warren now gives 99% of what he earns to people who can use it
- Warren’s ambition in life is to be a teacher
- Look for the job you would take if you didn’t need a job
- Warren is agnostic but doesn’t fear death
Above notes are from my sister Emily. Thank you Emily!!
Nick’s Notes: Becoming Warren Buffet
Here are my own notes from things I noticed from the HBO documentary “Becoming Warren Buffett”
- Warren has a particular way of speaking. It reminds me of how Ben Franklin wrote. Simple, clear, concise.
- His close friendship with Bill Gates is mentioned a few times. It seems incredibly genuine, with deep respect on both sides.
My biggest takeaway was about the importance of focus, which both Warren and Bill credited with their success.
- The power of compound interest.
- I love that he decorates his offices with newspaper covers from market crashes, like instructive art and warnings.
- Warren Buffet’s two rules of investing: (1) Never lose money, (2) See rule #1.
- The movie is more about Warren as a person, and much less about his individual business dealings.
- I found it incredibly fascinating and inspiring that the same 25 people have been working at Berkshire Hathaway for so many years. Nearly zero turnover.
- Warren Buffett as a man of consistency. Same foods, same schedule, same investing strategy.
“The chains of habit are too light to be felt until they are too heavy to be broken.”
His personal life:
- Constantly having dinner together as a family, all the time.
- He loves to eat at McDonald’s, especially for breakfast. Reminds me of my father!
- Warren’s father was a Republican who ran for office, and served in the Senate or House of Representatives.
- He was a bit of a troublemaker in high school: He shorted AT&T stock and brought in the paper proofs of his shorts in order to make his teachers nervous (all of their retirement funds were in AT&T).
- Warren was exceptionally proud of his graduation from the Dale Carnegie course in public speaking. Said it changed his life completely.
- Lives in Omaha, Nebraska. He likes to live there because it helps him focus.
- Relationship with his first wife Susie, and the complication situation with Astrid, was glossed over but addressed adequately. Compared to the book “Snowball” which was too deep, IMHO.
- On the benefits of his marriage to Susie: “She put me together. Suzie made me more of a whole person.”
- Susie inspired his interest and support in the Civil Rights movement. He was particularly inspired by Martin Luther King’s speech.