Respect For Warren Buffett And The Late Charlie Munger
Two business leaders whom I greatly admire and respect are Berkshire Hathaway’s CEO Warren Buffett and the late Charlie Munger, former vice chairman.
Certainly, for their business acumen. But mostly for their honesty and integrity, the degree to which is rare in the business world. In a world where we are conditioned to accept and “live with” deception — in all areas of our lives — frustratingly expending time and energy managing around it, these men have learned that removing dishonesty from the equation is not only the right and noble thing to do, but that there is a benefit: it has freed them to more easily and profitably manage their company.
They are famously known for their transparency. Warren Buffett admitting mistakes publicly, in letters to their shareholders and at the Berkshire Hathaway yearly shareholder’s meetings.
This is one of my favorite quotes from Warren Buffett:
“Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.”
I remember when Warren Buffett predicted that the dotcom industry would fold prematurely, which came to pass, because business models of the day were focused almost exclusively on short term gains. This was the new way of conducting business. Buffett’s sure and steady value investing approach, which strongly integrates long term planning, seemed old-fashioned, comparatively speaking. (Google was an exception. Not a star nor sexy at the time, they were quietly planning their long term strategy, and it paid off.)
I witnessed the fallout of the dotcom industry working at a few startups, watching a succession of companies shut down, having burned through massive cash funding on the fast track to an IPO, seemingly without regard for the welfare of their customers, the products or services they depended upon, nor their employees.
An interesting phenomenon followed.
I noticed, first a trickle, then a growing influx of articles appearing in the Wall Street Journal reporting on corporate fraud and misgovernance — in other industries. Those who didn’t work in the dotcom industry watching colleagues who did and were profiting sought ways to profit in their respective industries. In the absence of dotcom inherency — rapid growth, stock options, and shot gun tactics — loopholes were sought. But things didn’t work out.
You can see a visual enactment of what I have described in the documentary, “The Corporation.” It’s compelling.
Granted, conducting business at Berkshire Hathaway vs that of an individual company is like comparing apples to oranges. Nor am I meaning to overlook the challenges that CEO’s of publicly-traded companies face in appeasing investors so as to remain competitive, not just in their market, but on Wall Street. This point was also made in the documentary, “ The Corporation.”
A holding company that incorporates honesty and integrity and has reached and teeters on a trillion dollar market cap, landing in the top 10 or so companies in the world, provides inspiration for change that is needed. Reading any of Mary Buffett and David Clark’s books on Warren Buffett philosophy demonstrates how careful examination and analysis can lead to useful, ethical, and profitable strategies.
Here are two of my favorite videos from Charlie Munger and Warren Buffett.
© Marlene Veltre 2024 All rights reserved
