I Saved $2.1 Million On Lunch – A Sit Down With Warren Buffett

I thoroughly dislike watching CNBC for investing purposes due to all the noise.  When the markets are up, they bring on every single pundit to talk about how the market is going higher.  When the markets are down, they bring on all the bearish pundits to tell you why the world is coming to an end.  I remember when the S&P hit the ominous 666 level earlier this year, they brought in a “famed” technical analyst who said to expect S&P 200 by year-end.   What was her name again? I forget.  Watch CNBC for entertainment purposes mainly, and a little bit of learning.  Don’t watch CNBC to get rich.

Sometimes though, CNBC puts together something great.  And that great feat was bringing Warren Buffet (Columbia B-School Alum) and Bill Gates together in a town hall with all their business school students to ask them questions.

Here are some of the most memorable lines paraphrased from the show:

“Work for someone or an organization you admire.  When I moved from Nebraska to New York to work for Ben Graham, I didn’t care what my pay was.  I had no idea.  All I knew was that I admired Ben greatly, and was happy to be working for him.”

Warren’s response to what advice he has for anybody who doesn’t know exactly what they want to do?

“Buy and hold is not dead.  This financial crisis has not deterred our investment philosophy at all.  I don’t care about what happens tomorrow, next week, or even a year from now.  Invest in the long term as good businesses are going to be worth more over time.”

Warrens response to whether this financial crisis has changed his buy and hold investment philosophy.

“Run this business like this is the only business you can run for the next 100 years.  Understand the motor of the business and its competitive advantages.”

Warren’s annual letter to his 70 managers when asked how he continues investing for the long term.

“Everybody says cash is king, but it is not.  Cash is a terrible investment and will likely lose value over time.  By the time you see the Robins sing in Spring, it’s too late.”

Warren’s response to whether he believes the latest rally is for real and whether investors should hold cash instead of invest in the market now.

It’s 50 years of preparation and 5 minutes of decision.   The good big decisions don’t take any time at all.  If they take any time at all, you’re in trouble.”

Warren’s answer when asked how he can make such quick and massive capital deployment decisions.

“There are a few magic moments where you have confidence in yourself.  You have to have brash self confidence.  Trusting yourself, and saying yes.  These opportunities don’t come a long very often, so seize them while you can.”

Bills answer to what one of his defining qualities are as a person to make him such a success.

“I’m good at making money, however, if you read Adam Smith’s book, it’s all about the specialization of labor.  I know that Bill & Melinda, as well as my children are better than giving money away and helping others than I am.  That is why I entrust them.”

Warren’s answer to discussing his $30 billion charitable donation to the Bill & Melinda Gates foundation.

If any student wants to sell their future stream of income, come see me after the show.  I’ll buy them now for $1,000,000, or 10X your estimated yearly earnings.  If you improve your communication skills, I’ll pay you 50% more!”

Warren’s answer to how he see’s value investing and the value of an MBA education.

“You bet!” and “On Margin!”

Bill and Warren response to whether they’d buy the United States if it were a stock.

CONCLUSION

I can see now why someone bid $2.1 million to have lunch with Warren Buffet in 2008.  He’s a smart, humble, and inspirational man.  Bill, you’ve changed from a tenacious business titan to a great philanthropist, so you ain’t so bad yourself.  Thanks to both of you for your inspiration!

Questions for Readers:

* Warren Buffet went to business school and is the greatest and wealthiest investor of all time.  Do you think business school has anything to do with his success?  I ask because Bill is even wealthier and didn’t even finish college.

* Do you think Columbia business school students, and business school students in particular have a competitive advantage due to the access they receive?  If so, why don’t more people apply to top business schools if they want to make more money?

* Who are other inspiration leaders and business men you follow and why?

Here is the full video:

Keigu,

Financial Samurai – “Slicing Through Money’s Mysteries”

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Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Investing 101 says

    I have a Netflix subscription and one of the first DVDs I ordered was that conversation with Bill Gates and Warren Buffett. I think I watched it five times before returning it!

    I do think business school has something to do with his success, but at the same time I think that the whole “going to college” process tends to stifle creativity and steer you towards the path of safety. I’m thinking about Frederick Smith’s paper that outlined an overnight delivery service (which turned out to be Federal Express), that he reportedly got a C for. We all know how successful that idea turned out to be!

    • admin says

      Investing 101 – Yes, good point and that’s why I juxtaposed the question with Bill Gates’ education ,or lack thereof. I like Bill’s response of having brash confidence. The FedEx example you highlight is a good one. FS

  2. Melissa says

    I would positively say that Columbia, Yale etc grads absolutely have a competitive advantage. But it comes at a cost, a cost which is usually unbearable by regular families. Hence why only a handfull of the population can afford to study in such institutions.

  3. Minority Fortune says

    While business school isn’t THE answer for success, it can increase your knowledge. Buffett was smart enough to work under his mentor to gain practical knowledge. On top of that, he went to a top notch b-school which led to prime contacts and great influence.

    Business schools can be great tools to further one’s skills. If you look at the leading business schools, a lot of their graduates blaze the trail in brilliant accomplishments in society. However, some people are born with raw talent and can further develop it without the aid of institutional learning. We don’t see a problem with either path because it’s the result that matters most.

    Our inspirational individuals are Oprah, Buffett, George Soros, Tony Hsieh, Bob Johnson, the Rockefellers, Deepak Chopra, Nelson Mandela, etc. We love the “from rags to riches” stories, and their accomplishments motivate us to pursue our journey to wealth.

  4. admin says

    Hi Melissa – Thanks for your thoughts. Is it really cost though? Wouldn’t you be willing to borrow $100,000 if there’s a high likelihood you’ll make $1,000,000 more over your career? Many people have literally a short 2 year payback period on their grad school investments ie they make 50k more a year upon graduation.

    This is one of the great things about credit. It’s easy for anybody to use, and I can’t think of a better thing to invest in than your education and career!

  5. admin says

    Minority Report – Great comment! Oprah is such an amazing woman. What a success she has done branding and monetizing herself!

    Buffet’s message of finding a right mentor is so key. Work for someone you admire, and hope she/he brings you up with them!

  6. In the Money says

    Such wise words from two brilliant men.

    I think business school can help you succeed, but I don’t think it is necessary. Ultimately, business school might teach you a little, but what you really get out of it are connections. If you don’t need those connections or can acquire those through your own networking, you might not need business school to succeed.

  7. admin says

    Genius/MoneyMonk – no problem. I haven’t been so excited about a show/interview in a long time.

    It was funny, as some of us publishers think differently. While I was reading publishers Twitter about watchinbg “The Office”, I was Twittering about this interview and all the things Warren and Bill said to help make us a success! :)

    FS

  8. Charlie says

    what a neat interview. I think it’s great that he donated such a huge sum of money. I can’t even fathom having a fraction of that amount and it’s great he’s giving it to a good cause. thanks for sharing!

  9. Monevator says

    A lot of Buffett’s success was definitely down to meeting Ben Graham — wherever Graham happened to be teaching, I think the two men would have hit it off.

    Something else that comes across in The Snowball is Buffett was running little businesses from his mid-teens. For instance, instead of just delivering papers, he ran the route and multiple delivery boys. From memory, he had a farm and a tenant from age 20 or similar. He has a lot of practical experience of getting his hands dirty in business, as well as that academic background.

    • admin says

      Monevator – That’s right, I forgot about all his side-business initiatives. WB definitely had a knack for making money. He made the most of his opportunities! Sam

  10. Andrew Joseph says

    What I love about blogs is which they spark an idea in my brain. When that occurs, I really feel as I need to comment using the hope it may be interesting to some people. Because you will find lots of blogs and forums with numerous points of view, they question your comprehension. It is at these moments when you’ve important insignt other people may not have had, together with the blogger him/herself. I find myself coming back again to to your writings only because you have several very good insights and also you’ve been at this a very long time, that is really inspiring and tells me you know your stuff. Keep triggering imagination in others!

  11. Iretipaul@personal development blog says

    Two things attending school will do for you: to help you read and write. I believe business school has little to do with his success in investing. What really helped him was his early work with Graham.

    I draw inspiration from Warren Buffet because he knows the art of investing. Bill Gates community development programs touches the very essence of my being. Richard Branson’s style of entrepreneurship is what i want to adopt.

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