Recently, Warren Buffett met at the University of Maryland for a discussion panel with college students pursuing their MBA/MS degrees. The students came from 8 different schools (Boston University, Columbia University, Concordia, Grinnell College, Marquette University, St. Louis University, University of Maryland, and Yale University) and prepared 20 questions for Buffett. The discussion lasted a little over 2 hours.
You can find the full discussion summary here, but here are a few of the highlights:
Q: What qualities do you look for in hiring people?
It’s no secret that Berkshire Hathaway keeps its corporate office tight-knit with few employees, and Berkshire subsidiaries are responsible for their own employees. But, he does try to guide them in the right direction.
“The qualities they look for are intelligence, energy and integrity. But the most important quality in a manager is having a passion for the business,” he said.
Q: What qualities do you admire in others?
Humor and leadership capability are among the top qualities Buffett admires in other.
Q: Why don’t you invest in tech companies?
Buffett explains that while he personally doesn’t feel comfortable investing in tech companies, two of his top investors Ted Weschler and Todd Combs each have their own allotment to invest, and at least one took interest in Apple. To put it simply, technology has no room in Buffett’s “Circle of Competence.”
Q: Is there a fundamental investment wisdom that you disagree with?
Buffett doesn’t necessarily answer the question directly, but he does offer up some words of wisdom. Not only does Buffett say that investing really hasn’t changed very much over time, he also says that if you invest in good companies there isn’t much need for diversification.
Q: What is the most important skill in finance?
Buffett doesn’t hesitate to say that its salesmanship. In fact, he goes on to say that salesmanship can help you in a few different aspects of life: marriage and work.
“There’s been far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities,” Buffet said at this years annual shareholder meeting.
On Everything Else
Q: What impact have the central banks had on stock markets?
It’s no secret that decreased/negative interest rates from central banks effect the whole world. Ideally, lower interest rates will help lower mortgage payments and borrowing costs, but hurt those who are savings-heavy. Warren Buffet doesn’t have a whole lot of insight on this subject as he says no knows how exactly these negative interest rates will play out, but he does know that “where there is chaos there is opportunity. “
Q: Are you concerned by the size of the national debt?
Buffett seems confident that as long as our debt is contained within our own nation, we should be doing okay. The net debt of America, the debt not including the government’s own borrowings, is more than 70% of the Gross Domestic Product. To put this in perspective for us, Buffett says that in World War II the net debt was about 120% of our GDP, and during Reagan’s terms it was only about 35%. Clearly, Buffett thinks we have plenty of wiggle room and showcases that we have been worse off in the past.
It’s refreshing to see one of the most successful investors in the world passing on his knowledge to the future of America. The octogenarian has had a lot of successes in his life and wants to see our nation continue to grow and thrive, which is why he enjoys handing out advice.