Warren-Buffett-Morning-Future
Inspiring Best Practice 11 December Dec 2017 1100 11 December 2017

Warren Buffett: the innovator who stakes everything on women

With a wealth of almost $80bn, he is the second richest man on the planet and an investor who has never missed a shot. Here’s why, at almost ninety years of age, Warren Buffett remains the mentor all startuppers would love to have.

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He is the friend every startupper would love to have, regardless of his ripe old age. He is the mentor whose approval is instantly worth millions of dollars. Because - as his protégées Bill Gates and Airbnb founder Brian Chesky can confirm - when Warren Buffett decides to back you, you can be sure that you’ll go far.

After all, Buffett is not often wrong, especially when it comes to money and innovation. Indeed, his investment strategy has earned him the nickname of “Oracle of Omaha”, his native town in the deep Midwest of the United States, where he still lives most of the year in the house he purchased in the early fifties for little more than $31,000. Indeed, sobriety is one of Buffett’s watchwords - he disowned his own granddaughter for taking part in a reality show in which heirs and heiresses flaunted their shamelessly luxuriously life styles.

“I’m not interested in cars and my goal is not to make people envious. Don’t confuse the cost of living with the standard of living,” says Buffett, who up to roughly 10 years ago, as CEO of his holding company Berkshire Hathaway, received a basic salary of €100,000 - a fairly modest figure, compared to the sky-high salaries of other magnates, especially considering that the company registers revenues of close to $224bn.

If you get to my age in life and nobody thinks well of you, I don't care how big your bank account is, your life is a disaster.

Warren Buffett

After all, as he often says, “if you get to my age in life and nobody thinks well of you, I don't care how big your bank account is, your life is a disaster”. A statement that is consistent with his commitment to philanthropy. In 2006, Buffett and Bill Gates promoted the Giving Pledge, which invites the wealthiest people in the world to pledge a large part of their wealth to charitable causes. “I want to leave my kids enough money so that they feel they can do anything, but not so much that they can do nothing.” To this end, Buffett says that, in time, he will donate all his shares in Berkshire Hathaway - a promise that he seems to be keeping. For now, he has donated 40% of his shares to charity, and since the start of 2017, the Oracle of Omaha has already donated more than $3bn to the Bill & Melinda Gates Foundation and to the four foundations he created on behalf of his first wife and children.

I want to leave my kids enough money so that they feel they can do anything, but not so much that they can do nothing.

Warren Buffett

And yet, with a net worth of $78.9bn, Warren Buffett still comes in at the top of the Forbes ranking of the richest people in the world, second only to his friend Bill Gates.

Born in 1930 to a member of the US Congress, Buffett began his career in finance at a very early age: legend has it that he acquired his first shares at the age of 11 and filed his first tax returns when he was 13, and that at the age of 15 he bought a plot of land that he leased to local farmers. The turning point in his life, which paved the way for his entrance into the global finance elite, came with the book, “The Intelligent Investor”, written by Benjamin Graham, who was later to become Buffett’s professor - and mentor - at Columbia University. After his studies, Graham invited Buffet to work for the Graham-Newman Corp., considered by many to be the first true hedge fund in history.

When he was about to retire, Graham asked Buffet to take his place at the head of the fund, but Buffett refused as he planned to return in his native town, Omaha. Here, upon being asked by friends and relatives to manage their money, he founded the Buffett Partnership open investment fund.

That was the start of his empire, based on Graham’s so-called “value investing” strategy, which involves buying securities that appear underpriced and keeping them for long periods of time. This strategy led him to acquire shareholdings in some of the most important American groups, from Coca Cola to Gilette and McDonald's. He then acquired Berkshire Hathaway, a declining textile industry that he transformed into one of the most powerful holding companies in the world, currently active in over 70 business sectors, ranging from laundry to private jets, and employing over 300,000 workers.

Patient innovation

A true friend and mentor, Warren Buffett is fascinated by the thousand ways in which innovation can change the world. Indeed, he is considered a guru in Silicon Valley, and is one of the most coveted guests of honour at important business events. That said, the magnate of the Midwest tends to invest in established companies that have moved on successfully from the start-up phase.

For him, the key to success is prudence. As Brian Chesky recalls, “his advice for Airbnb was, ‘get rich slow’ - although, nothing about Airbnb was slow.”

This advice is very much in line with Buffett’s investment strategy: “I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions, than most people in business.” Buffett’s main aim is to minimise risk. In this regard, he is a great admirer of Jeff Bezos, creator of Amazon, who has differentiated in many areas, from investment in the Washington Post to the creation of the private space agency. “He is one of the most successful entrepreneurs and visionaries in history; there is no one else like him.”

Invest in yourself

There's one investment that supersedes all others: invest in yourself.” On this, Buffett is quite clear. “Stay healthy on all three planes, mind, body and spirit: eat good food, drink plenty of water, read, and never stop learning”. This is an approach that Buffett also applies to his work. “People often ask me who they should work for. I’ve got a very simple answer: work for some institution or individual you admire.” The Oracle of Omaha is a man who practices what he preaches: “I learned to go into business only with people whom I like, trust, and admire.”

A philosophy that has tricked into his company: “We rely on a moral code of conduct, rather than on dozens of rules,” says Buffett. From his employees, he expects honesty first and foremost, because, as he explains, “it takes twenty years to build a reputation and 5 minutes to ruin it”.

When speaking about work, the Oracle of Omaha has a word of advice: “In the world of business, the people who are most successful are those who are doing what they love”. “You need to really think about what will make you proud when you are old and look back on your life. That is the right direction to take.”

It takes twenty years to build a reputation and 5 minutes to ruin it.

Warren Buffett

Choose the right heroes

While sobriety and patience are the first two cornerstones of success, the third - according to Buffett - concerns relations. “Always associate yourself with people who are better than you. Pick out associates whose behaviour is better than yours and you'll drift in that direction”, says Buffett, who believes that interpersonal relationships are key to building a successful future. This is something that he has experience first-hand, through his partnership with his university professor, Benjamin Graham, the mentor who paved the way for his entrance into the global finance elite.

“Choosing your heroes is the most important factor in becoming successful. I always ask university students: ‘Tell me who your heroes are and I'll tell you how you’ll turn out to be’.” The Oracle of Omaha’s heroes include his father and, of course, Benjamin Graham: “He was the greatest investment teacher ever”.

Life is a lottery. I had a 50% chance of being born female with the same IQ and talent, which would have made career options very limited.

The future is female

In order to give back some of the support he received at the start of his career by established people such as Benjamin Graham, Buffett has decided to mentor some of the brightest minds in Silicon Valley, giving particular priority to women.

“One of the reasons for my success was that I was only competing with half of the population”, he explains. “Life is a lottery. I had a 50% chance of being born female with the same IQ and talent, which would have made career options as limited as my sisters’,” when women were only allowed to be schoolteachers, nurses or secretaries.

Women have the same potential as men; it is our duty to help them to release it.” This is an idea he has advocated since the 1950s, when, at the University of Nebraska, he became professor of a course entitled Women and Investing, addressed specifically to women. More than sixty years later, the Oracle of Omaha is supporting the global Lean In movement - launched by Facebook COO Sheryl Sandberg to support the advancement of women in the workplace - mentoring Silicon Valley’s most promising businesswomen.

“Look what's happened over the past 300 years using half our talent. Just imagine what's gonna happen when we go full blast with 100%.”

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