Investing in companies is a complicated business. And, while Berkshire-Hathaway is worth billions pf dollars, the company has been known to conduct deals ranging from a couple billion to $37.2 billion. A mistake, in this economy, could worry even the great Warren Buffett, Chairman of Berkshire-Hathaway. So, it’s understandable to think that Buffett is a cautious man who spends lots of time pouring over briefs in order to make sure that the multi-billion dollar deals his company makes are in its best interests.
But, according to an interview with Bloomberg, nothing could be further from the truth.“When somebody calls, I can usually tell within two or three minutes whether a deal is likely to happen or not,” Buffett told David Rubenstein in a video interview. “There’s just half-a-dozen filters, and it either makes through the filters or not.”
And that short timeframe isn’t just for small deals. While many businessmen might spend a few months to a year on deals, Buffett reportedly made his initial bid on Precision Castparts, after listening to CEO Mark Donegan talk for around 30 minutes. That deal, which is the largest deal Berthshire-Hathaway has made to date, was settled for around $37.2 billion.
Throughout his investing career, Buffett has prided himself on making quick decisions, and while it might seem shocking at first, gut decisions are often the best when you know what you’re looking for. If you’re not convinced in the first few minutes, then there is no point in letting someone else change your mind. In short, one of Buffett’s keys to success is knowing the risks, knowing when to take them, and when to walk away.
“At Berkshire, we make no attempt to pick the few winners that will emerge from an ocean of unproven enterprises. We’re not smart enough to do that, and we know it,” Buffett said.