Warren Buffett Speaks

JANET LOWE is the author of the bestselling Bill Gates Speaks and Jack Welch Speaks. Her articles have appeared in such publications as Newsweek, the Christian Science Monitor, the Los Angeles Times, and the San Francisco Chronicle.

• Acknowledgments xiiiIntroduction 1ABOUT LIFE 13Omaha? Omawhere? Omawhat? 13Live how you want to live 15Eat what you want to eat 15Have a hobby 16Be passionate 19Aim high 20Aim well 23Focus on your goals 23Keep life in perspective 23Be honest 27Tell the whole truth, please 28Letter to the Wall Street Journal 30Cultivate good character 36Believe in yourself 37But don’t get too stuck on yourself 38Dodge the hype 44Share your wisdom 44Disregard old age 45ALSO: Attention Investors: Warren Buffett is crossing the street 20Nice guys finish first—sometimes 24Choose your heroes well 40Rose Blumkin, matriarch of the Nebraska Furniture Mart 47ABOUT FRIENDS 51Know what friendship is 51Go to bat for your pals 51Guiding Governor Schwarzenegger 52Build lifelong friendships 54ALSO: Charlie Munger 54ABOUT FAMILY 58Don’t spoil your kids 58The Buffett children 62Work things out with your wife 75Be kind to your mother 81ALSO: What others say about Warren Buffett 70Astrid Menks, Buffett’s second wife 78The controversial Susan T. Buffett Foundation 79What Leila Buffett had to say about her son 82What the critics say 82ABOUT WORK 85Work for the fun of it 85Start early 88Work where you want to work 89Work with good people 90Give a pat on the back 92Be loyal to your partners 93Guard your time 95Know when to quit 97ABOUT RUNNING A BUSINESS 99Communicate well 99Know when to say no 100Set an example 101Take care of shareholders 104Hire well, manage little 110Put a premium on experience 111Be smart about allocating capital 111Be brave 112Use crossover skills 112The mighty machine called Berkshire Hathaway 113ALSO: The Berkshire Hathaway annual meeting 102Goodbye to a good idea 106The Salomon scandal 108Berkshire Hathaway online 109ABOUT INVESTING 116Have a philosophy 116Recognize the enemy: inflation 117Experience epiphany 119Never mind what the professors say 125Meet Mr. Market—your servant, not your guide 126Ignore Mr. Market’s moods 129Listen for opportunity’s call 130Know the difference between price and value 133Seek intrinsic value 133Expect to be out of step 134Earnings, earnings, earnings 137Look forward, not back 138Avoid risk 139Don’t gamble 141Watch for unusual circumstances 143Don’t be surprised by circumstances 143Avoid excessive debt 144Look for screaming bargains 145Arbitrage when possible 145Be patient 148Think for yourself 149Have the right tools 150Be wary of Wall Street 151Only buy securities that you understand 152An old dog prowls new markets 153PetroChina 155An expanding circle of competence 157Buy reading glasses 160Become an investigative reporter 161Keep it simple 162Think big 164Know what you’re looking for 166Don’t sweat the math 167Admire frugality 169Set realistic goals 171Face facts 171Expect change 174Be capable of change 175Admit your mistakes 182No thumb sucking 185Join AA (Airlines Anonymous) 186Learn from your mistakes 190Buy storybook stocks 191Seek excellent companies 193Stick with quality 196Junk bonds 197Appreciate franchise value 199Respect pricing power 202Find a company with cheap float (then try to not misplace the company) 203Learn to like Monopoly 204Find managers who think like owners 205Management is important, but a good company is more important 206Avoid the Institutional Imperative (the tendency for corporations to act like lemmings) 206Favor companies that repurchase their own stock 207Don’t worry about diversification 207Invest for the long term 208To sum up 209And when you’ve become wealthy by following in the footsteps of Buffett, pay your dues to society 210Investing is one way of contributing to the public well-being 210When rewards are disproportionate 211Pay your taxes and don’t complain 214Give as generously as you receive 218Thoughts on charitable giving 223Will Buffett’s gift affect the company? 226The last word 227ALSO: Benjamin Graham 120The Used-Cigar-Butt School of Investing 135He tells them, but they don’t listen 172Baby Berkshire shares 175What does the Bill and Melinda Gates Foundation do? 224Berkshire’s Book Value vs. the S&P 500 231Berkshire Hathaway Share Price 233Time Line 235Endnotes 241Permissions 271