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The Four States of Warren Buffett
It is my belief that the fanfare and fuss surrounding a leader’s achievements often overshadows how they reached and maintained their position at the summit of success.
There is a cult of personality around Warren Buffett, the revered, even fabled chairman and chief executive of Berkshire Hathaway. It is not something he has cultivated, but his billions of dollars no doubt fuel a large measure of interest. If you fall for all the hoopla, you miss the real Warren Buffett – a leader in business and the community virtually without peer.
The tens of thousands of shareholders in his company, attending their annual meeting at CenturyLink Center in Omaha, Nebraska, are not fooled. They all know about what I like to describe as A.I.L.C. - or the four states of Warren Buffett.
Authenticity
People respond to authenticity: they need to know that a leader is everything they seem to be. They recoil from baseless bravado and overblown promise. In today’s society, all leaders are on a watching brief.
So, in our era of suspicion and scepticism, that there is a competitive process for the 30,000 places at the Berkshire Hathaway annual shareholder meeting is clear evidence of Warren Buffett’s genuine, real connection with the people and of the high regard in which he is held.
Executive management and directors tend to approach these meetings as highly scripted and defensive affairs, with questions and answers anticipating every possible shareholder accusation or complaint.
In contrast, Warren Buffett hires an entire stadium and conference centre for three days. There is a steak night at his favourite restaurant, picnics and shopping days. And when it comes to engagement with shareholders, there is six hours of unscripted, nothing off-limits interaction. It is the definition of a positive conversation between management and shareholders. It is a celebration rather than an interrogation. It is interaction at a human level.
Instinct
When it comes to making the big decisions, some leaders listen to their natural instinct, whereas others ignore it, consistently deferring to advisers or the safest option to steer their decision.
It is obvious that Warren Buffett sits in the former category. Famously he bought his first stock when he was just 11 years old. He also started a newspaper delivery business which allowed him to buy a farm at the age of 14. How is that for natural instinct?
And it has never left him. He has always had an instinct for value and innately known that it comes with time, not in the moment.
He places a premium on tangible value, trusts his instincts and, with enviable patience, stays the course. Not for Warren Buffett the shifting trends and fashions of Wall Street.
Leadership
One of the biggest lessons in leadership is learning how to let go. This is why recruiting the right people to take with you on your leadership journey is essential. You are looking for authentic, loyal people you can trust and, simply put, that you like being around. Only then can a leader confidently empower their staff with responsibility and delegate decision-making.
Warren Buffett HQ is just 24 people. He has complete trust in operating managers to run the companies in which he buys large stakes. He has worked with his partner Charlie Munger for 54 years. This says a lot about Warren Buffett’s ability to surround himself with people that he believes in.
Empowering staff and delegating decision-making are the hallmarks of great leadership. With confidence and trust comes an ability to invest in your staff, to give them freedom of movement to make their own decisions and accept the risks that come with that.
Community
Real leaders are not takers. For them, success is not about accumulation, it is about how you made your community a better place. How you stimulated positive views, encouraged people to be better and supported those who needed it.
It is clear to me that the essence of Warren Buffett is not money. Whether he is lobbying President Obama to change unfair tax laws that see him paying only 19 per cent tax, when his staff are paying more than 30 per cent, or committing 85 per cent of his fortune to support the lifesaving research and biotechnology work of the Bill and Melinda Gates Foundation, the essence of Warren Buffett is giving back to the community.
So the shareholders of Berkshire Hathaway are not taken in by the fanfare that accompanies one of the world’s richest people. Sure, like him, they are about returns, but they know he is no different now to when he was a boy building his first business. They respect and accept his thinking, and his trust in and his delegation to others.
It appears to me, that money is a by-product of his passion, rather than the core of his focus. Therein lies an extraordinary lesson for those young and ambitious people who are at that stage perhaps of being blinded by "success". It comes with passion and focus, not from a quick trade.
Old fashioned values of loyalty, decency and trust – so much a part of my grandfather’s era - are worth more today than ever before and I suspect are the true source of Warren Buffett’s wealth.
At a time where the United States appears to live in the moment, when once it had the vision to land on the moon, it prompts me to consider Warren Buffett – not the billionaire, but the man who built a culture that will be his succession plan. He reminds the world, and the United States in particular, that traditional values build hard working and big thinking economies. It is time we paused to reflect on this.
https://www.linkedin.com/today/post/article/20140502001338-322130907-the-four-states-of-warren-buffett
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Discussions
Be the first to like this. Showing 36 of 36 comments
stocko, many just go buy his book and memorize some mantra like buy when ppls fear and sell when ppls greed, so they ended up buying a lot of cybert on the way crash from 2.00 . csl also crashed from 2.00, the seling was panic, and these warren buffet cult believer grab cybert and csl at 1.00 at lightning speed.
so is warren buffet is a saint or sinner?
2014-05-03 11:55
interested in your '" I know I will be rich". I owe somebody this explanation and skip his class.' story. pls elaborate
2014-05-03 12:00
Ha, i post some comment on Apr 26 on blog: stock Trade Signal-Intra Day and Short term signal and did not get back to them.
To answer your question is Warren a saint or sinner, probably some of my previous posting will provide some clue to you. It is deep understanding of Business and its perspective.
2014-05-03 13:27
Look at Magni Tech by KCchongz. He is making me crazy everyday. But i have to say No. It is like Pintaras in Construction.
2014-05-03 13:46
5 year figures of Magni tech does not initiate a Buy call to me. Jenny, you be the judge.
2014-05-03 14:05
stocko, i m not a fan of kcchonz. dont waste my time with his fundamental stories. to me
stock mkt is not about the past earning but forward looking. and a good stock must be sexy, young, and vibrant.
2014-05-03 14:06
Jenny for the first time in so many days I drop my suspicion that you are an agent for a syndicate
2014-05-03 14:18
Can't blame me, anybody who approach me and tell me :
(1) stay above Pavillion (implying certain level of wealth); and
(2) can mobilize HK fund managers to push up share price
will automatically put me in high alert and not to be trusted
(9 out of 10 conmen I met boasted about their wealth and drop names)
But what u said above, and also what you told Alphabeta, has disarmed me
Only an educated and experienced investor will say something like that
In analyst term, I have just upgrade your rating to Outperform
2014-05-03 14:26
“The further backward you can look, the farther forward you are likely to see” Winston Churchill
"History doesn’t repeat but it does rhyme" Mark Twain
2014-05-03 18:46
Jenny I would say KC is always young and vibrant. It is just me who is old fashioned.
2014-05-03 19:38
KC you know there is need to look further backward as I always notice there is a trend of 5 good year of above average and then 5 bad year of below average. There is a need to study for at least 10 years.
2014-05-03 19:45
Ha ha young and vibrant? KC you know how the girl nowadays right? You have daughter?
2014-05-03 19:53
To very young and vibrant girl Ms j: Please go thru some of KC write up. You must ya if you want to learn.
2014-05-03 20:01
Mr Ooi I like your trading ideas on Cup and handle. It is almost like Head/Shoulder/Waist line/Knee and Toe formation right? The Support is always at about waist line/cup formation and then the Break Out happens thereafter.
2014-05-03 23:43
But i think double Bottom comes first right then Only Cup and handle? Is it a good strategy/winning probability of Buying at double Bottom then?
2014-05-03 23:55
Posted by stockoperator > May 3, 2014 11:55 PM | Report Abuse
But i think double Bottom comes first right then Only Cup and handle? Is it a good strategy/winning probability of Buying at double Bottom then?
Ans : I do not look at double bottom stock because this stock is either a down trending or side way stock. I am more keen on double top, it means a Cup is formed. It takes 2 weeks to form the Handle. Once the pivot line is crossed, the price will sky rocket up. Our slogan is "sky is the limit".
Thank you.
2014-05-04 09:18
Thanks Mr Ooi, Like this is Buying High Selling higher. I never try this out before.
I would prefer then Buying at the Bottom line of Uptrend line then which is your Ema20/Parabolic Line.
2014-05-04 12:23
You know people like me Always wait for Good Business selling to me cheap cheap price preferably at double Bottom
For a case in study of your cup and handle, is my LPI forming cup and handle then????
2014-05-04 12:34
Mr Ooi, i think there must be another example of cup and handle formation for Pintaras before breaking out on 9th April right??
2014-05-04 16:03
Posted by stockoperator > May 4, 2014 04:03 PM | Report Abuse
Mr Ooi, i think there must be another example of cup and handle formation for Pintaras before breaking out on 9th April right??
Ans : Yes. You know that Cup and Handle Chart is super bullish. My slogan is "Sky is the limit" especially the stock continue breaking new high like Ptaras. Please make full use of this chart pattern to win big in KLSE.
Thank you.
2014-05-04 16:08
I have to thank you. You and KC are the cornerstone of this forum. God bless you all.
2014-05-04 16:15
Let me summarize what I learn from the Master:
1. Rounding Bottom
2. Double Top
3. Formation of Handle
4. Break Out from Pivot Line
This is one of the Best formation.
I dont know technical can be so interesting.
2014-05-04 17:23
come on! applying warren's philosophy on some highly speculative or stocks without fundamental and expecting the same output as his classical Geico/ Washington post are you serious? CSL doesn't have any tract record and Malaysia red chips are well known for suspicious book. You should blame yourself for picking some rubbish counter rather than blaming Warren. His philosophy only can be applied on intact companies! For those who blame kcchong do you analyze companies or businesses better than him? If not please keep your mouth shut!
2014-05-06 03:45
any present chart of any stock with this cup handle please. I would like to see how it looks
2014-05-06 07:41
warren is not a trader. he dont look at stock prices everyday. he doest even use much computers. moreover he is more of a bussinessman than an investor. you have to be rich in the first place to do what he did
2014-05-06 09:15
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
stockoperator
Most people just study Warren investment methodology But ignore his belief/mentality/charisma/leadership which are more than the cornerstone of his success. Last but Not least, his winning mentality=" I know I will be rich". I owe somebody this explanation and skip his class.
2014-05-02 21:39