Warren Buffett has gone from a seven-year-old boy roaming the streets of Omaha selling Coca-Cola bottles for five cents apiece to a man now sitting atop the Berkshire Hathaway empire that he created, and has more than $525 billion worth of assets.
Have you ever wondered which habits helped Warren Buffett get to this place in his life? There are three of them that we feel everybody should adopt.
Don’t Stop Learning
In the 50th annual letter to shareholders of Berkshire Hathaway, longtime second-in-command Charlie Munger talked about one of the most enduring and important traits that Warren Buffett has that ultimately led to his success:
“Buffett’s decision to limit his activities to a few kinds and to maximize his attention to them, and to keep doing so for 50 years, was a lollapalooza. Buffett succeeded for the same reason Roger Federer became good at tennis.
“Buffett was, in effect, using the winning method of the famous basketball coach, John Wooden, who won most regularly after he had learned to assign virtually all playing time to his seven best players.… And Buffett much Out-Woodened Wooden, because in his case the exercise of skill was concentrated in one person, not seven, and his skill improved and improved as he got older and older during 50 years.”
Another way to look at it was that Buffett learned what he was good at and then stuck with it through thick and thin, and continued to hone his skills throughout this time.
Malcolm Gladwell, in his book Outliers, makes a suggestion that anyone looking to truly become an expert at something must have some inherent skill involved, but another key component is to keep practicing. And to become a true expert Gladwell says that the key is to spend at least 10,000 hours of time mastering this skill. Gladwell says “Practice isn’t the thing you do once you’re good. It’s the thing you do that makes you good.”
He shares an example of Bill Gates, being a man that snuck out of his parents’ house late at night during high school in order to learn computer coding. Another example is The Beatles, who played in various bars across Hamburg, Germany for eight hours a day until they mastered their craft.
The same thing holds true for Warren Buffett. He even once remarked:
“I insist on a lot of time being spent, almost every day, to just sit and think. This is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions, than most people in business. I do it because I like this kind of life.”
Similarly, rapper Nas says in his song “I know I can”:
“Boys and girls, listen up. You can be anything in the world, in God we trust. An architect, doctor, maybe an actress. But nothing comes easy, it takes much practice.”
No matter where life happens to take you, it’s always important to remember that whether you learn from Bill Gates, Warren Buffett, The Beatles or Nas, you’re never going to be perfect, and practicing persistently is always going to be the thing that gets you one step closer to making it happen.
Patience Is the Key to Success
The world is moving at an incredibly quick speed nowadays. The Wall Street Journal even reported, “It took 75 years for telephones to achieve 50 million users, while Angry Birds reached that goal in a mere 35 days.”
Another one of Warren Buffett’s admirable and distinct qualities is his patience.
Back in 2003, the Oracle of Omaha noted:
“We bought some Wells Fargo shares last year. Otherwise, among our six largest holdings, we last changed our position in Coca-Cola in 1994, American Express in 1998, Gillette in 1989, Washington Post in 1973 and Moody’s in 2000. Brokers don’t love us.”
But please take a moment to consider remarks that Warren Buffett made in his letter to shareholders back in 2010, in which he tells us that for Berkshire Hathaway to succeed:
“We will need both good performance from our current businesses and more major acquisitions. We’re prepared. Our elephant gun has been reloaded, and my trigger finger is itchy.”
Many people widely believe that Warren Buffett intends to purchase a single business worth billions upon billions of dollars. Even though his trigger finger may have been itchy in 2010, and the cash pile at Berkshire Hathaway is now more than $60 billion, Buffett instinctively continues to wait on the sidelines until the perfect opportunity presents itself.
Obviously there is value in moving quickly into something if the decision is a no-brainer and time is of the essence, but otherwise it would make sense for all of us to step back and exhibit more patience.
And your patience could consist of buying batteries while out shopping, or like Warren Buffett it could be buying the company that makes batteries instead.
Give Credit Where Credit Is Due
One of the final characteristics about Warren Buffett to note is that he is very eager to commend his managers and the people that surround him.
Consider, back in 2009, the remark he made about Ajit Jain, the head of the Berkshire Hathaway Reinsurance Division and speculated often to be the person to replace Warren Buffett as the head of Berkshire Hathaway:
“If Charlie, I, and Ajit are ever in a sinking boat – and you can only save one of us – swim to Ajit.”
When talking about Ted Weschler and Todd Combs – Berkshire Hathaway stock portfolio managers – Buffett made these remarks in his 2013 letter to shareholders:
“In a year in which most equity managers found it impossible to outperform the S&P 500, both Todd Combs and Ted Weschler handily did so. Each now runs a portfolio exceeding $7 billion. They’ve earned it. I must again confess that their investments outperform the mine. (Charlie says I should add “by a lot.”) If such humiliating comparisons continue, I’ll have no choice but to cease talking about them. Todd and Ted have also created significant value for you in several matters unrelated to their portfolio activities. Their contributions are just beginning: Both men have Berkshire blood in their veins.”
Or think about the praise that Warren Buffett gave to Tony Nicely back in 2005:
“Credit Geico – and its brilliant CEO, Tony Nicely – for our stellar insurance results in a disaster ridden year.… Last year, Geico gained market share, earned commendable profits, and strengthened its brand. If you have a new son or grandson in 2006, name him Tony.”
And as you can imagine, the list could go on forever.
Remember to take into account that we are talking about a person worth $70 billion, who also understands the value of the work of others and realizes that it’s as important to his success as his own value and work. So no matter what, we should always take the time in order to thank those who have helped us to get to where we want to be.
It’s important to always be yourself, but adopting these three traits will help everyone no matter what path you happen to take in life.