Warren Buffett is considered one of the most successful investors on Earth with an investment philosophy based on value. Mind you, he has given away US$ 38.8 billion of his net worth, which is estimated at US$ 71 billion. His first investment was made at the age of 11, and he was running his own business by 13. Known as the ‘Oracle of Omaha,’ the Chairman and CEO of Berkshire Hathaway has transformed his group into a conglomerate with more than 60 companies. He founded The Giving Pledge with Bill Gates.
BACKGROUND
DATE OF BIRTH
30 August 1930
BIRTHPLACE
Nebraska (USA)
EDUCATION
BA and BS degrees from the University of Nebraska at Lincoln
MSc degree from Columbia University
OCCUPATIONS
Businessperson
Investor
Philanthropist
HIGHLIGHTS
Among the most respected businesspeople in the world
Largest shareholder of Berkshire Hathaway
QUOTE
If you’re in the luckiest one percent of humanity, you owe it
to the rest of humanity to think about the other 99 percent
Warren Buffett
Q: What attributes have contributed to Warren Buffett’s success as an investor and businessperson?
A: Buffett himself has been quoted as saying the first attribute is finding your passion. From an early age, Buffet demonstrated that he was passionate about businesses and investing.
Secondly, he attributes hiring the right people to run his businesses – viz. those with integrity, intelligence and energy. Other attributes include a willingness to learn, sticking to his competencies and expertise while conceding that there are many things he doesn’t know, which he’d try to avoid if possible.
As an investor, his success has been built on a consistent investment approach, which hasn’t changed significantly over the years. It has been proven through academic studies that a rational and consistent approach over a long period of time produces superior returns in investing compared to trying to time the market or being swayed by sentiment.
Q: How can young businesspeople seeking to make a global impact drive change in the same philanthropic spirit?
A: Environmental, social and governance (ESG) compliant businesses and investments are more relevant today than they were a few years ago.
The change is driven by generational changes in the attitudes of younger people who are more mindful of conducting both businesses and lifestyles in ways that can make a positive global impact.
Q: What can Sri Lankan business leaders apply in their own practices?
A: While some of the key takeaways mentioned above are universally applicable to all business leaders, there are lessons to be learned from what Buffett hasn’t done too well.
Despite having a huge pile of cash, Berkshire Hathaway has underperformed the market for some time because Buffett avoided investing in businesses – especially technology businesses – that he claimed he didn’t understand well or were outside his core competencies.
So Berkshire Hathaway missed out on investing in these companies until it invested in Apple and Amazon much later.
The lesson here is that sometimes, even if we’re doing well, we have to keep adapting, innovating, and stepping outside comfort zones and core competencies… because the business world is never inert.
Ray Abeywardena
Managing Director
Acuity Partners
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