Over the years, Buffett has repeated the same advice in interviews and shareholder letters: Find good, undervalued companies with strong leadership and stay away from them.”I have a lot of fun doing what I do every day. I’ve had fun at it since I started delivering papers at age 13. You better enjoy it as you go along. The idea that you’re going to have a lot of fun 30 years from now, or if you have ten million dollars, the trick is to enjoy what you’re doing that day. And I always have,” Buffett said in 1999.
Early bets, early lessons
Buffett has often emphasized that luck played a decisive role in his success, starting with where and when he was born.
“I was conceived in the crash. I was conceived in November 1929. My father was a stock salesman. So you can draw your own conclusions. If the market had stayed strong, he would be calling. I don’t know what would happen,” Buffett said in 1992.
He bought his first shares at the age of 11. It didn’t go well.
“I bought three shares of Cities Service Preferred in 1942 for $38 a share. Doris, who is three years older, 13 or 14, and she thinks that was my entire fortune, so if I did that, so would she. It promptly dropped to $27. And Doris and I walked to Rose Hill and she reminded me that I wasn’t setting any records yet,” said Buffett.
As a teenager, Buffett was ruthless. He sold golf balls, delivered 500 newspapers a day, held horse races for the disabled and sold tips to gamblers at Ak-Sar-Ben. He bought a used Rolls-Royce for $350 and rented it out for $35 a day. But his favorite early venture involved pinball machines placed in barbershops in Omaha.
“We did very well in that business. It was called Wilson Coin Operated Machine Company because my partner Don Danley and I went to Woodrow Wilson High,” Buffett said in 1992. “The barbers were always bugging us to put in newer machines… We told them we would discuss it with Mr. Wilson. We said he was a tough guy and we weren’t sure we could convince him.”
Building Berkshire
Buffett’s rise has been incremental, not lightning fast. At the age of 32, he invested in a struggling textile company called Berkshire Hathaway. In the 1960s, he took over and focused the company on insurance, a decision that provided the steady cash flows that would power decades of acquisitions.
From GEICO and Central States Indemnity to Borsheims, Nebraska Furniture Mart and dozens of household names, Berkshire became a sprawling collection of companies tied to decentralized management and long-term ownership. Much of the wealth that Buffett generated is now being given away.
“I once said, quoting someone else: I generally believe that if you have a lot of money, you should leave your children enough money so that they can do everything, but not enough so that they can do nothing,” Buffett said in 1992. “I just don’t see any reason from a social or personal point of view that passing on hundreds of millions is advisable.”
First write the obituary
Every spring, Berkshire shareholders flock to Omaha in pilgrimage-like numbers, listening as Buffett explains his decisions in marathon sessions that blur business, ethics and humor. His longtime partner Charlie Munger once offered him some advice that Buffett said stuck with him.
“He said to me, you write your obituary early and you reverse engineer it,” Buffett said in April 2023.
When a reporter asked if that meant sticking to it, Buffett replied, “Or you should strive for it. Whatever it is. Whatever you want to achieve in your life, just figure it out. That’s what your obituary will be about. That if you want to be remembered as kind, you better be kind. It will be there, and you won’t be able to change it.”
Last month, Buffett accelerated the distribution of Berkshire shares to foundations founded by his three children, totaling about $1.3 billion. In his Thanksgiving letter, he reminded readers that success is not measured by money or power.
“Kindness is free, but it is also priceless,” he wrote. “Keep in mind that the cleaning lady is just as much of a human being as the chairman.”
He will hand over the title of CEO next week. The office, the routine and the philosophy remain.
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