Warren Buffet Leadership Case Study is a part of Leadership Stories, a series of biographies of great leaders in history that have impacted the world in a huge way.
Warren Buffet is one of the world’s richest men, with assets totally up to US$50 billion in 2011. His main source of wealth comes from his company Berkshire Hathaway, a conglomerate holding company headquartered in Omaha, Nebraska, United States.
His philosophy of value investing and prudence and influenced many investors worldwide.
Buffet was born in 1930 to a businessman and politician in Omaha, Nebraska.
From a very young age, Buffet displayed the qualities of an entrepreneur and an investor. As a child, he would go door-to-door to sell chewing gum, Coca Cola and magazines.
In his elementary school, he would purchase a pinball machine and place it in a barber store. This was so successful that he would end up owning several pinball machines at different stores.
In his time in college, he would continue to do many money making activities like delivering newspapers, selling golf balls and stamps, among many. By the time he was finished with college, he already had $90,000 in savings (adjusted to 2009 dollars).
Buffet would work in Graham Partnerships under his role model of Value Investing, Benjamin Graham. He had offered to work under him for free earlier on but was rejected.
Buffet would start his own partnerships later on, called Buffet Partnerships. These several partnerships with other companies would eventually make him a millionaire through stock ownership. Buffet would invest in a textile manufacturing firm called Berkshire Hathaway and eventually take over the firm as well.
It was from this firm that he began writing his letters to the shareholders which would continue on until today.
From this firm, he would make many wise acquisitions in companies like Washington Post, General RE, ABC and Salomon Inc. This would eventually make him a billionaire in net worth.
As of April 12, 2011, a single Berkshire Hathaway stock costs a whopping US$123,497.
Warren Buffet has received several honors and recognition by the public media, including:
• Top money manager of the 20th century in a survey by the Carson Group
• Time's 100 Most Influential People, 2007
• Presidential Medal of Freedom, 2011
• World’s most Influential Global Thinker in Foreign Policy's 2010 report
Warren Buffet is probably the most successful investor in the history of the world, and one of the world’s richest men with over US$50 billion in networth.
1. Stick to Fundamental Values
Buffet always believed in the fundamental values of a business. While the financial world becomes driven by fear and greed through its ever increasing leveraging and the using of derivatives, Buffet stays solidly by his investing values. He believes simply that investing in a business stock is like investing directly in the business. If the business can be profitable in the long run, so will his stock.
In our age where there are many upcoming new things, management theories and techniques, we must learn to always stick to the fundamental leadership principles of vision, character and discipline and so on. While theories and tools can come and go, principles that govern leadership will forever remain the same.
2. Live simply
Although Buffet is one of the richest men in the world, he lives simply; cycling to work and only having a single telephone at home.
Many leaders nowadays are distracted by the ‘things’ and other possessions they can have as leaders, so much so that it sometimes that the motivation of leadership can become clouded. Is this leader in it because he believes in the cause, or that he wants to be distinct, recognized and be most rewarded?
Buffet displays great humility and the purity of his pursuit by his spending. Instead of becoming complacent or distracted by riches after a while, Warren Buffet was very clear that his objective is to accumulate wealth. I believe that every leader has something to learn from Warren Buffet as well.
3. Give back
Buffet intends to give back 99% of his wealth to charity through the Gates Foundation. If his focus in wealth accumulation was admirable, then giving it all away is even a greater feat.
As a leader, one must remember the purpose by which one is in leadership; not to take from the world, but to be an asset and a person of value to the world. That is the attitude of any successful leader.
Chains of habit are too light to be felt until they are too heavy to be broken.
Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.
Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
Only when the tide goes out do you discover who's been swimming naked.
I always knew I was going to be rich. I don't think I ever doubted it for a minute.
The investor of today does not profit from yesterday's growth.
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.
Let blockheads read what blockheads wrote.
I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
A public-opinion poll is no substitute for thought.
MORE WARREN BUFFET LEADERSHIP QUOTES
Beware of geeks bearing formulas.
Price is what you pay. Value is what you get.
You only have to do a very few things right in your life so long as you don't do too many things wrong.
Your premium brand had better be delivering something special, or it's not going to get the business.
Risk comes from not knowing what you're doing.
Someone's sitting in the shade today because someone planted a tree a long time ago.
The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing.
When you combine ignorance and leverage, you get some pretty interesting results.
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Warren Buffet speaks to a group of MBA students:
» Jamie Dimon
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» Steve Jobs
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» Ray Kroc
Ray Kroc is the man behind the multimillion dollar fast food empire, MacDonald’s. In his life, he has built the fast food chain from a simple hamburger restaurant to a multi-billion dollar franchise that has reached almost every part of the world today.
» Andrew Carnegie
Andrew Carnegie was the father of modern steel and was one of America’s richest men. He started the Carnegie Steel Company, which later merged with Steel Company to become U.S. Steel.
» Walt Disney
Walt Disney is the famous founder of Mickey Mouse, the loveable cartoon character that has permeated almost every country and culture in the world. He is the co-founder of Walt Disney Productions and one of the most influential motion picture producers in the world.
» Henry Ford
Henry Ford is the founder of the Ford Motor Company and also the inventor of the modern day assembly line method of production for his Model T cars. He is also an inventor who has been credited with over 100 patents. During his time, he was one of the richest people in the world.
» Sam Walton
Sam Walton is the founder of Walmart, the international discounting retail giant. He is a model business leader who has changed the way big business is done.
» Donald Trump
Donald Trump is an American business magnate and television personality. He is the Chairman of the Trump Organization, a US-based real-estate developer. To date, Donald Trump has accumulated wealth of up to US$2.7 billion, primarily through his real estate investments.
» John D Rockefeller
John D Rockefeller is an American Oil Magnate and the first billionaire in the history of the world. In today’s dollars, Rockefeller is still considered the richest man in modern history. He was also one of the first few philanthropists in the world, giving back a huge portion of his wealth to the community.
» Warren Buffet
Warren Buffet is one of the world’s richest men, with assets totally up to US$50 billion in 2011. His main source of wealth comes from his company Berkshire Hathaway, a conglomerate holding company headquartered in Omaha, Nebraska, United States. His philosophy of value investing and prudence and influenced many investors worldwide.
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