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I don’t know much about Warren Buffet, except the boring things that the press tells us – things like that he is one of the richest guys in the world, he is the “Oracle of Omaha”, he gives away all his wealth, et cetera. Apparently the media is content with this sensationalism and superficiality. But I found something really surprising and in its way fascinating in Warren Buffet nobody else seemed to care to write about. Maybe because it is a simple thing, but it is powerful.
I recently looked for the first time at Warren’s latest Shareholder Letter from 2011 which he publishes openly (disclosure: I am not in any way affiliated to Berkshire Hathaway, Inc.). It is a pretty long letter, but if you find time you should look at it in detail here – it is totally worth it. Not because it provides a great investment advice how to become as rich as Warren, in fact I couldn’t find much of advice in it that you could use. But it is an example of what character traits one person needs to be able to come as far as Warren Buffet. Reading through this letter to his shareholders, you find text passages such as:
A few years back, I spent about $2 billion buying several bond issues of Energy Future Holdings, an electric utility operation serving portions of Texas. That was a mistake – a big mistake.
Wow. When was the last time you’ve seen any external manager telling publicly “yes, I made a mistake, let’s go on”? Let alone any politician! I’d even say no politician in the last 20 years has come up with that level of truth. People are simply no longer straight forward.
And it goes on:
I totally miscalculated the gain/loss probabilities when I purchased the bonds. In tennis parlance, this was a major unforced error by your chairman.
So this is not just a one-time thing, this is an essential feature in Warren Buffet’s character and certainly one of his secrets to success. It is fascinating and living proof that being honest, straight forward, direct but not unfriendly are the foundations to build the necessary trust among whoever surrounds you to achieve great things. At 81, Warren Buffet has the balls.