How Warren Buffett Makes Money
Warren Buffett, a brilliant business man, one of the richest and most charitable people in the world, was being interviewed on CBS’s “Person to Person”. The premise of the show is to give viewers a glimpse into the lives of some of today’s most important artists and newsmakers.
- An inviting room with a lot of natural light.
- A large desk with a lot of working space.
- A phone front and center.
- A small pile of reading material on the desk.
- Pictures on the wall representing some of the most influential people and moments of his life.
- And most notably… NO computer.
For the most part my office is a lot like Mr. Buffett’s (okay, it’s not quite as big). I have a lot of natural light. A nice, large desk. A small pile of paper on my desk of things that I’m currently working on and pictures around me of the most important and influential people in my life. The real difference is that my phone is a little left of center because my computer and monitor take front and center stage in my life.
How could Buffett not have a computer anywhere in his office? He’s a gazillionaire and has made most of his fortune in the stock market buying and selling on information. I spent 15 years working on Wall Street. I know there HAS TO BE a computer and a TV. How else could he know what’s going on in the world every single second?
Ahh…but that’s just it. One of the things Buffett said during the interview was that he is happy if he makes one good decision a year. He does his research by speaking to people (on his phone) and by reading reports and other information (mostly on paper). He takes his time to study the landscape, make a few solid decisions and act on them. And when he acts he sticks with his decision. He is known for buying stock in a company and holding onto it for the long run.
I am positive that Buffett has missed out on a lot of opportunities with his way of thinking but at the same time his strategy has done pretty well.
Granted, he has many people working for him that consolidate information for him and present him with what he specifically wants, but he does not spend his day distracted by all of the incoming email and the second-by-second news headlines. He gives himself the space and permission to focus his attention on his decision making process and what works for him.
Here are my top seven takeaways from Mr. Buffett’s interview.
- Make one really good decision a year you’re golden.
- Don’t try to do it all.
- If you miss something it’s okay.
- When you take your time and make a solid decision stick with it and see where it goes. The day to day fluctuations aren’t the concern it’s performance over the long run.
- It’s all about connections. The most important thing in Buffett’s office is his phone.
- Don’t forget what made you who you are and what’s important to you. In addition to pictures of family, Buffett has his Dale Carnegie Speaking Class diploma on his wall. He swears that this $100 class is what led him to where he is today.
- Remove the distractions. Move away from the computer when you need to really focus on something (or at least shut off the “you’ve got mail” notifications!).
Warren Buffett is an incredible man with many lessons to teach all of us. What lesson are you going to apply to your business today? Share your thoughts with me.