Notes From a Meeting with Warren Buffett
undergroundvalue.blogspot.com
undergroundvalue.blogspot.com
What if you could buy 10% of one of your classmates and their future earnings? You wouldn't buy the ones with the highest IQ, the best grades, etc, but the most effective. You like people who are generous, go out of their way, straight shooters. Now imagine that you could short 10% of one of your classmates. This part is usually more fun as you start looking around the room. You wouldn't choose the ones with the poorest grades. Look for people nobody wants to be around, that are obnoxious or like to take all the credit. If you have a 500 HP engine and only get 50 HP out of it, you'll be beat by someone else that has a 300 HP engine but gets 250 HP output. The difference between potential and output comes from human qualities. You can make a list of the qualities you admire and those you despise. To turn the tables, think if this is the way I react to the qualities on the list, which is the way the world will react to me. You can learn to turn on those qualities you want and turn off those qualities you wish to avoid. The chains of habit are too light to be felt until they are too heavy to be broken. You can't change at 60; the time to look at that list is now
And that, people, is how that guy is rich.
1.5 BILLION servings of Coke a day?! That's 1 for every 4 humans on this planet. Now that is a crazy stat (and I thought Starbucks opening 7 stores per day was crazy)
Was an interesting aspect of living in Spain. I had to get used to making an 11 ounce bottle of coke last a whole meal, or pay another $3 for a 'refill'.
Also, look up Charlie Munger and his essays, the #2 guy after Warren buffet.
"I had nothing to do with my own success. [...] I was born with the wiring for capital asset allocation. I had the right wiring at the right time. Temperament is a large part of my wiring. I was naturally good at it, and I used some feedback to develop it better.[...]"
Do you realize the logical assumption behind such statement ?
It means that if you fail, you're not responsible either, because you weren't born in the right place at the right time with the right "wiring". So basically Mr. Buffet doesn't believe in free will, and if you're on the lucky side, "there is no reason to feel guilty about it.". If you're on the unlucky side, there is really nothing you could do about it but try to be happy anyway with what you have.
But isn't the american society based on individual merit ? "Anyone can succeed if he really wants to", wich leads to the logical implication that "if you fail, it's also your fault". Mr. Buffet's philosophical conclusions can be summed up by his "ovarian lottery" metaphor that comes up a lot of times in the interview : you won in the vagina, should you apologize to the others ? Then why should it be different in the society, son ?
Now let me be clear : I'm not emitting a moral judgment about what Mr Buffet says, that he should believe something else or whatever. I just find it paradoxal that Mr. Buffet, wich is one of the icon of the american society, tends to not believe in what makes the heart of the american society paradigm : free will & individual merit.
"After a talk at Harvard, I told them to work for who they admired the most, so they all become self-employed. It’s important to go to work for someone or some organization you admire."
Is it so much for a person to want to own their home, have a personal savings, have health care, and be able to retire at a reasonable age? I don't think it is a 'mistake' to want for any of these things, and sadly, there are a good number of people in the world that this is not accessible to.
This was (and has always been) Buffet's point. Everyone in America has won the 'ovarian lottery' (as he calls it) because we were born here with the opportunity to achieve all those things and more. He's not implying it's only possible here, and he is not implying everyone should be happy where they are. He is just saying we should be thankful that we live in a country that generally makes it possible, and even probable.
The fact that you have the opportunity to become super rich is no 'gift' when you consider that the most likely outcome is that you will work a shit job making shit money so some asshole like Buffet can squawk about how grateful you should be.
Don't get me wrong, I have no problem with people getting rich. But please realize that the gap between the average Joe and the Warren Buffets of the world has been growing larger for quite some time.
Just goes to show that the human psyche cares more about relative prosperity than absolute prosperity. This is well documented in research. Still, I have to question why you would prefer to be 'rich' in a place without running water rather than be 'poor' in America (where the poor people only have one TV and have to drive used cars).
Of course, there are a lot of people worse off than my above glibness suggests, and I think we should definitely be doing all we can to help those people out, but don't try and claim being poor in America is somehow worse than being poor anywhere else just because people like Warren Buffet live here.
"Don't get me wrong, I have no problem with people getting rich."
The fact that you called Warren Buffet an asshole shows that you do. If you knew anything about the guy, you'd know he doesn't rate anywhere on the asshole scale. My guess he is just a soft target because he happens to be so rich that he is a statistically anomaly.
Being rich in America is certainly great. Being poor in America is not that much different than being poor in the developing world, aside from the better hand-me-downs.
The ability to social climb probably requires several generations at this point. First getting into the middle class, then the upper middle class, then finally into the owner class. I still say it's possible, but yeah, it'd require a brilliant mind and a lot of luck to do it all in one leap.
Clean water (ie, no Malaria), soup kitchens, human rights, no shanty towns, opportunity to improve your life, and the availability of public education provide a safety net that developing countries often lack.
Being poor in America is surely difficult, but I'd much rather be poor here (or in the developed world in general) than be poor in a 3rd world country.
"In high-income countries more than two-thirds of all people live beyond the age of 70 and die of chronic diseases: cardiovascular disease, chronic obstructive lung disease, cancers, diabetes or dementia. Lung infection remains the only leading infectious cause of death.
...
In low-income countries less than a quarter of all people reach the age of 70, and nearly a third of all deaths are among children under 14. Although cardiovascular diseases together represent the leading cause of death in these countries, infectious diseases (above all HIV/AIDS, lung infections, tuberculosis, diarrheal diseases and malaria) together claim more lives. Complications of pregnancy and childbirth together continue to be a leading cause of death, claiming the lives of both infants and mothers."
Still think that being poor in America is as terrible as being poor in the developing world? How many kids do you know of that die of diarrhea in America? I'm not saying either situation is a panacea, but seriously, everyone in this country won the 'ovarian lottery' just by being here.
Anyway, this is getting way off topic...
"The difference between potential and output comes from human qualities." - brilliantly put.