Both investing and insurance are a game of probabilistic science, where you try to get the odds in your favor. So, things he talked about that day and the way he spoke really struck a chord with me. He said, “I read 500 pages a week,” referencing the huge stack he had walked into the room with. “Any of you can do it, and the knowledge just compounds over time.” [500 pages a week or a day??]
It’s a rare person where the closer you look, the better he gets.
Warren loves teaching, and his ability to weave wisdom into storytelling and combine it with lessons from business history is really special. Warren credits his longtime business partner Charlie Munger with the best 30-second mind, but Warren’s ability to simplify the most complex issue is also unparalleled. Einstein lists the order of intelligence as “smart, intelligent, brilliant, genius, simple.” Warren’s mind is just frictionless in its ability to simplify issues to the core.
What’s the most important consideration for investing?
Howard Marks wrote a book titled “The Most Important Thing,” and I think it had 20 lessons. So it’s hard to distill into one – but it’s really a judgment business at the end of the day. You want to find the best business you can at the cheapest price you can. You can have a wonderful business at a high price resulting in a terrible investment, and conversely you can have a terrible business at a wonderful price yielding a terrific investment. Charlie Munger compares it to the parimutuel system or betting on horses. Everyone may know who the best horse is, but if it’s more than reflected in the odds, then it won’t pay off. You want to find the great horse that no one else thinks is a great horse.
What’s a typical day like for you?
I read about 12 hours a day. Our offices are like a library. So I read annual reports, conference call transcripts, trade magazines, etc. Most things are routine, mundane and obvious, but every once in a while you find something interesting worth digging into. Warren and I will usually catch up once or twice a day on stuff that’s going on – deals, stocks, stuff with our companies. Sometimes our managers reach out or a banker calls with an idea, but that’s about it.
What’s your advice for students who want to follow in your footsteps?
You really just have to find your passion in life. Warren says to find the job you would do if you didn’t need a job. The earlier you find that, the better – because it won’t seem like a chore to follow your dream, and you’ll outwork everyone in the process. Don’t be afraid to fail. In fact, you kind of want to fail early and often because it doesn’t cost you much when you’re young – and you learn a lot more from failure than success.