Long read: How Warren Buffett Did It

“All of us—fellow investors and business executives, but also the wider public—are fortunate to have lived in the time of Buffett, to have soaked in his wisdom, and to have been inspired by his example. Buffett will be particularly missed at a time when many of the most successful people in the business community seem single-mindedly focused on making money, without reflecting much on the way they make it or what they will do with it. Just because you can doesn’t mean you should.”

Whilst Klarman comprehensively covers the great man’s life and career, there are three specific aspects in Klarman’s piece that stood out for us as inspirational about Buffett’s life and none of them are about investing.

First, as a teacher – sharing his thoughts and ideas so openly and in a simplistic fashion over the years that millions benefitted from it:

“People have a general sense that somebody can become rich by investing in (the right) common stocks, reinvesting the dividends along the way, and hanging on when other investors are panicking. We occasionally hear stories about a retired janitor, schoolteacher, or librarian who scrimped, saved, and invested wisely, leaving behind a small fortune. Buffett demonstrated something more startling—that you could become one of the richest people in the world by doing so, and not by using a wonky trading algorithm that scrapes a penny or two off every trade but by deploying a commonsensical plan to buy and hold shares in high-quality, publicly traded businesses. Buffett, in this way, was both a man apart—an investing unicorn—but also an Everyman, just another guy buying shares, usually in well-known companies. (The Average Joe, however, did not spend his days and evenings scouring stacks of corporate annual reports, footnote after footnote, for revealing insights.)

…Buffett is a gifted and inspiring teacher, and he has frequently taken the time to appear as a guest speaker in classrooms. Legions of student groups have flown out to Nebraska to meet, ask questions of, and have their picture taken with the Oracle of Omaha. Over the years, Buffett’s annual Berkshire Hathaway shareholder letters (and even his earlier partnership letters) became must-reads for investment professionals. Unlike most wonky and tedious Wall Street market commentators, Buffett became famous for making complicated subjects understandable. Buffett’s missives were eagerly awaited by the investment community; they were replete with memorable quips (such as the admonition about risk-taking that “It’s only when the tide goes out that you learn who’s been swimming naked,” and the time-tested advice to “Be fearful when others are greedy. Be greedy when others are fearful”), as well as quotes from the likes of Yogi Berra and Mae West.”

Not to forget the annual shareholder meetings in Omaha which became a pilgrimage of sorts for value investors across the world, seeking to learn the next nugget of wisdom from Buffett.

Second, the simplicity with which he led his life despite his enormous wealth:

“Buffett’s accumulation of enormous wealth hasn’t changed him, something that most enormously wealthy people can’t claim. Throughout his working life, he remained fundamentally the same person he had been when he was a child: bright, curious, and upbeat. His unchanging nature extended not only to his diet of hamburgers and Cherry Cokes; over time, his business interests came to reflect his childhood attractions to newspapers, railroads, and Dairy Queen. Buffett has lived in the same house in Omaha his entire adult life. He generally maintained the same friendships over many decades. He didn’t accumulate fancy cars, yachts, expensive art, or multiple vacation properties, as many of the ultrarich do. … Buffett’s enduring popularity, at least in part, is due to his enduring humility, sense of perspective, genuine wonder, and perpetual gratitude for how his life has turned out.”

Third, his own philanthropy as well as inspiring as other rich folks to give back: “Buffett has said that one reason that he deferred significant personal philanthropy for many years was because he thought that, by waiting, he would have disproportionately more money to give away down the road.

…In 2006, Buffett donated an astounding $31 billion to the already well-endowed Gates Foundation, thereby doubling its annual grant-making capabilities. (This was, and still is, one of the largest philanthropic gifts in history, and Buffett gave more to the foundation over time.) 

…In 2010, again joining forces with Bill and Melinda Gates, Buffett co-founded the Giving Pledge, an organization with the goal of signing up the world’s billionaires to the cause of philanthropy. Members needed to vow that they would give away half or more of their fortunes either during their lifetime or at their death. Buffett and Bill and Melinda Gates took the time to personally reach out to prospective members to persuade them to join, including arranging multiple meetings with me and my wife before we joined in 2013. At the most recent tally, the Giving Pledge had more than 250 members who have committed many hundreds of billions of dollars in future philanthropy, a number likely to grow over time—and a legacy that will have an impact far into the future. No one else has attempted, let alone accomplished, anything remotely comparable.”