General Guidance for Stock Investing

Warren Buffett Q&A with Fortune Magazine

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Executive Summary


In an interview of Fortune with Warren Buffett held at the University of Nebraska Omaha attended by 150 students, faculty and a few friends of Buffett, he answered questions about women and work. He also gave additional wisdom on other things related to life and success.


In 1776, all men are created equal, but Article II of the Constitution described the presidency using male pronouns. It was only 61 years later before a woman finally got appointed in the Supreme Court. 33 males reigned before that first woman. The chance was 8 billion to 1.


Aside from the Supreme Court, there are many other organizations and companies that had gender sensitivity. For 30 years, Fortune did not have a woman writing articles, but Carol Lomous started it in the 1960s. Imagine wasting half the talent. If you look at the last 30 years, the authors are written by men. It was a different world back then.


A country that uses only half of its talent has got a great future if it started using all of it. More than half of the 1970s, women were just being shut out of most activities. Their talents never reached its potential. Just think about it if the whole team has got its potential out there!


Buffett view on women actually does not affect the way he manages Berkshire. For him, his job is to have the right people in the top spots for those businesses. He doesn’t look at it gender specific. Age doesn’t make any difference nor gender. In the end, the company needs to come up with the best person to run it. Talent is scarce, and everyone wants somebody to fill in the job well.


In appointing the CEO, the previous CEO anoints who will take his spot. It’s difficult for the board to bark the momentum and more difficult to make intelligent, yet independent decisions. Speaking up in a tensed environment and questioning the chairman’s recommendation of succession isn’t easy. It’s a social situation more than people realize. Moreover, meeting without the current CEO as a whole is a different level of discussion compared to when the CEO is present. A lot of bad decisions have been made on succession. Once mistakes are made, they are not easy to correct.


Learning is a continuous process. One can never learn enough about decision-making, succession, or even investments. According to Buffett, you need to read everything you can to invest a little of your own money. More importantly, do things with real money to experience investing. Build good records. Get a job where you take responsibilities that can prove what you did with your money, because that’s how you get major leagues. Learning never stops.


Learning never stops, but success can be achieved more efficiently with it. Somebody said success is getting what you want, while happiness is wanting what you get. Buffett said “One doesn’t preclude the other, though. If people whom you wanted to have love you, you can have all the money in the world. You can have buildings named after you, hospitals, and other establishments. Unless most people really care about you, you are not a success. Not everyone will make a fortune, but if the people you loved also loved you back, you are a success.”

Full Text


In an interview of Fortune with Warren Buffett held at the University of Nebraska Omaha attended by 150 students, faculty and a few friends of Buffett, he answered questions about women and work. He also gave additional wisdom on other things related to life and success.


Buffett’s Opinion on Women

Buffett grew up with a sister on each side who were just as smart as he is. They’re impressionable, but they did not have the same opportunity as he did. For both external and internal reasons, women just haven’t had the same chance as men have. It’s good that it has got a lot better nowadays.


In 1776, all men are created equal, but somebody had their fingers crossed because Article II of the Constitution described the presidency using male pronouns. It was 61 years later before a woman finally got appointed in the Supreme Court. It didn’t happen naturally. There were 33 males before that first woman. The chance was 8 billion to 1.


The Millionaire’s Cup

A young woman from Twitter asked Buffett, “If you were filling a financial toolbox with tools to guide young girls throughout their lives, what would you have in it?” Buffett said he’d put in a Millionaire’s Cup if they’re starting very young. It is a program on cable intended to teach lessons very early through an entertaining vehicle for young people to understand and enjoy it. Buffett advised, “Invest in yourselves.” It’s very important to start on the right path early. The Millionaire’s Cup program is equally for boy and girls.


The Best Book to Read According to Buffett

The best book to read if they wanted to be in the investment world is The Intelligent Investor by Benjamin Graham. Buffett have read hundreds of books before The Intelligent Investor, but that book gave him a philosophy. It changed Buffett’s life. The book is still relevant until now as he can still apply the lessons today.


Success, Brains, and Women’s Abilities in the Eyes of Buffett

About 15 years ago, Buffett didn’t use to be so conscious about women and the importance of giving women opportunity. Just one day, it became a word when Carol Lomous entered my life and set an example. For 30 years, Fortune did not have a woman writing articles. In 1960s, it started because of Carol. Imagine wasting half the talent. If you look at the last 30 years, the authors are written by men. It was a different world.


With women engaging in more real life activities today, more women will experience success. But what does success really mean? Somebody said success is getting what you want, while happiness is wanting what you get. Buffett said “One doesn’t preclude the other, though. If people whom you wanted to have love you, you can have all the money in the world. You can have buildings named after you, hospitals, and other establishments. Unless most people really care about you, you are not a success. Not everyone will make a fortune, but if the people you loved also loved you back, you are a success.”


Carol said publicly at the Fortune’s Most Powerful Women Summit that Buffett is the least prejudiced executive she knew. He is not prejudiced in terms of race, ethnicity, or gender. However, he is biased about one thing – brains. What most people probably aren’t aware of yet is that there are all kinds of people who are doing wonderful things for the country. They aren’t intellectual giants, but they do their best. They are athletes, performers, artists; they are scattered around the world.


Buffett said that if there were one thing more important than brain, it is character. People are born with brains. Nobody chooses what gender he/she would be, but everyone is elected to have the character they want.


Hiring CEO’s

In terms of hiring regarding gender, Buffett have always tried to hire the best people regardless of gender. There’s a young woman in the audience that joined a year ago. She is now the chairman of the board of Berkshire. She selected the CEO for 2 of 4 of those companies.


Women as CEOs didn’t affect Buffett’s decisions in terms of what he would pay one way or another if the CEO were a female. It does not make any difference. However, what makes a huge difference on Jennifer Okimoto, CEO of IBM, is how good she is!


Buffett’s sisters are absolute as smart as he is. Sadly, the expectation of people around them was a good marriage was the crowning achievement. They have not thought of going into the same activates that he had. For Buffett, it was huge waste of talent.


If the world decided that all men under 5 ft. 10 in. should only have 3 activities available for them, what would the world become? Nothing but a piece of wasted and undiscovered talents. Why limit what one person can do just because he/she didn’t pass the “qualifications”? In this world, most women are basically secretaries, nurses and teachers. Buffett’s teachers were all women and that stroke him.


A country that uses only half of its talent has got a great future if it started using all of it. More than half of that period (1970s), women were just being shut out of most activities. Their talents never reached its potential. Just think about it if the whole team has got its potential out there!


Managers like Catherine Graham are a role model. She was the controlling shareholder; the CEO and Chairman of the board of Washington Post. She was the most powerful woman in the country, but she never believed in herself even though people told her already. When her husband died, she controlled Washington Post, and she was terrified. She overcame it and became active after all.


With regards to how Buffett views women affects the way he manages Berkshire, he said his job is to have the right people in the top spots for those businesses. He doesn’t look at it gender specific. Catherine Graham thinks about it the same way. Age doesn’t make any difference nor gender. In the end, the company needs to come up with the best person to run it. Talent is scarce, and everyone wants somebody to fill in the job well.


“Succession Is not Something to Keep to Yourself”

Even though Buffett makes his own decisions most of the time, succession is something that he would consult the board. They spend more time by far on that. If he should die today, everybody should be prepared and the decision should have been made. That is the key factor at Berkshire. The business is running extremely well and the women on the board contribute largely to it. Warren Buffett frankly likes the idea of women’s talents being recognized.


Though talents are good, educational background isn’t easy to throw away. There are only 24 people in the headquarters, 40,000 at Burlington, and 27,000 in GEICO. Each company has their own policies, but Buffett urges every one of Berkshire’s managers to do what they can to make it easier.


Buffett’s Son Questions Him

A small company that has 24 people at the headquarters you can individualize the policies. If Buffett had one, would he? His son asked, “Would you take actions at Berkshire Hathaway to make it easier for women to advance such as paid sick leave being a big barrier for women?“


In terms of the subsidiaries, the managers who run the businesses are given the responsibility on how to manage the businesses assigned to them. Buffett doesn’t tell them virtually anything to do except to put the company always in the front page of the newspapers. For instance, he doesn’t know particularly the needs of the 27,000 employees of GEICO and how they interact. There are some places where flexible workers would work very well, but there are other places where it’s not going to work very well. The managers hear Buffett talk and they read what he writes, but they run the businesses the way they it has to be.


The Women and Lessons who/that Contributed to Buffett’s Success

Susie, Buffett’s Daughter, is one of the women who had an influence in his life. According to Buffett, his life would be way different without her. It’s true with all his children, too, but Susie lives in Omaha. She is Buffett’s model for what he hopes all women get to be. Buffett had every bit as much as confidence in her doing anything. If he asked her to help him out, he’s sure things will get finished.


When asked about what Buffett learned from her mother, surprisingly, he answered that he learned most of his lessons in life from his father overwhelmingly. His mother thought her job was to totally serve my father. Personally, she didn’t want to move to Washington from Omaha, but she obeyed, because all her life, she had in mind that her purpose was to serve my father. She lived a life that was dictated by my father.


Growing up, it didn’t bother Buffett. His mom was intellectual, but she never got the chance to use it. She was there basically to take care of everything that was needed in the family. She was tied to housekeeping duties. If dad wanted to run for congress, he would be out there campaigning for him. Buffett guessed this set up affected her deep down. Maybe she thought it’s not quite fair, but she also thought that’s what women needed to do in life.


What is a Diverse Company?

For example, a CEO is picking his nephew. Buffett will have a big subtraction for that, but if he read a proxy statement that says something like “We have this and that as a diversity policy…” Buffett won’t pay any attention to that. What he cares about is whether they picked the best person or not. He has been on boards where they made a mistake of not choosing the best person (It wasn’t gender based). Sometimes a person is different when he becomes CEO. A mistake suddenly.


Is there a pattern in picking CEO’s?

The person is anointed by the previous CEO. It’s difficult for the board to bark the momentum and more difficult to make intelligent, yet independent decisions. Speaking up in a tensed environment and questioning the chairman’s recommendation of succession isn’t easy. It’s a social situation more than people realize. Moreover, meeting without the CEO is a whole different level of discussion compared to when the CEO is present. A lot of bad decisions have been made on succession. Once mistakes are made, they are not easy to correct.


On Stocks and Investments

If the companies does well, Buffett wants them to do well on stock ownership. They don’t give stocks to them; they buy. If they do lousy, Buffett wants them to feel the pain so they will learn from their experience.


Learning is a continuous process. One can never learn enough about investments. He needs to read everything he can to invest a little of his own money. More importantly, do things with real money to experience investing. Build good records. Get a job where you take responsibilities that can prove what you did with your money, because that’s how you get major leagues. Learning never stops.


The most important thing to keep in mind when investing in stocks is to get more money than what you’re paying.


The biggest mistake people make is listening to other people and buying something because they think it’s going to up next week or next month. It is important to understand what you’re buying! No one buys a farm without looking at it and expecting to get a lot of eggs from the chickens, how long before the soil softens, etc. It is not wise to buy without figuring out how much it’s worth and figuring out the price. Same way when buying a house. A buyer figures how much it looks and asks how much it costs and then check the tax. When spending, always want to look at the productive ability of the asset – whether it’s a farm, an apartment, a company. If you see what your money’s worth, you’ll do very well.


Vivid Memories of Teaching at the University of Nebraska Omaha

If there were one most vivid memory during his teaching days, it would be how to value a business and how to think about the stock market. He said the audience, “If you got an A in both, you can do very well.” All that a person needs to know to succeed is find out what things are worth. After that, he’ll know all the philosophies about the stock market whether he’s buying businesses or he’s buying ticker symbols. Buffett exclaimed, “I had lots of fun teaching here over the years. Made a lot of friends!”