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- Bdog2g2, on 05/08/2009, -0/+52Buffet used a tried and true method to getting rich.
- He was rational and calculated about his investments. Meaning he could look at the annual reports and smell *****.
- He was methodical and not irrational. Meaning he took his time.
- He wasn't trying to get rich as quick as possible. He spent years developing his skills and methods.
- He wasn't greedy.
- He knew he wouldn't be right all the time and there are times were an investment would go bust, but that didnt' stop him the next time. He learned and moved on.
- Slow and steady wins the race. - one1plus1one, on 05/08/2009, -0/+30To say that Warren Buffett made his fortune because he is "well connected" means that you've completely misunderstood the history and achievement of Buffett.
Buffett made his initial vast fortune precisely because he was NOT well connected, and because he avoided people of power in Washington DC and New York.
He hated their excess, and their spending, and their foolish risk taking, and pretty much their entire way of life.
He avoided them by continuing to live (as he does now) in the same house he bought in the 1950's, in Omaha, Nebraska, of all places. To base your empire out of Omaha, Nebraska says a lot about what a person thinks of New York and Washington's elite.
For most of his history he has in fact clashed dramatically with those in power in Washington and New York -- they have hated him, and he has hated their lifestyle.
In the late 1990's he was scorned by America's elite and rich because he stood before an entire convention of them, and told them point blank they were on the verge of losing their fortunes -- because the dramatic and inflated rise of IT companies was unsustainable and unrealistic, and that it was a bubble on the verge of popping.
That is just one example in which Buffett basically told the rich and elite that they were wrong -- there are so many countless examples of Buffett clashing with the elite.
The fortune that he, and his partner Charlie Munger made was by avoiding those people and doing things differently than them.
Now in 2008/2009, those in power are flocking to Buffett and offering him favorable deals, because he has a solid fortune of billions upon billions.
They're giving him favorable amazing deals now, because he won -- he has all the money and they squandered their money and didn't listen to his advice. They did precisely what he has always warned them not to do -- in terms of risky investments.
If they want his money in 2008/2009, to save their companies, he is forcing them to pay a "high" interest rate of 9 percent along with preferred options/shares.
So yes he is getting sweet deals now... but for most of his history he was not. - rmxz, on 05/08/2009, -1/+18One more factor to his success....
* He didn't' just invest and let management do whatever he wanted - he often used his influence as a shareholder to guide and pressure management in successful directions.
I think people give him too much credit as a stock picker, and not nearly enough credit as a guide/management-coach that really helped turn some of his investments into great companies. - dalittle, on 05/08/2009, -0/+14Wow, a lot of these comment have no idea who Warren Buffet is or how he made his money. The fact that he lives in a modest house and has for most of his life should really tell you he is no Murdock or other slime. His advice is on target and over time it pays off ... big.
- inactive, on 05/08/2009, -5/+19Since he's rich, and this is Digg, I'm going with evil.
- dygel, on 05/08/2009, -1/+13I bet a lot of folks would like to believe he's lucky. If he's lucky, that means that maybe - just maybe - YOU can do it too, like winning the lottery!
- mine4321, on 05/08/2009, -3/+13Convincing your wife to let you have a live-in mistress? BRILLIANT!
- NorthMass, on 05/08/2009, -2/+11Peter Schiff is brilliant.
http://www.youtube.com/watch?v=2I0QN-FYkpw - highwebl, on 05/08/2009, -2/+9I'm going with both.
- netfool, on 05/08/2009, -0/+7You missed one of the most important fundamentals of Buffet:
- Invest in what you know
The man likes drinking coke and he has made billions trading Coca-cola. - tattertech, on 05/08/2009, -1/+7Not just that, but Berkshire often gets far favorable terms on their investments - high levels of preferred stock and extremely favorable clauses for additional buys (that dilute normal shareholders).
- inactive, on 05/08/2009, -0/+6No.
- inactive, on 05/08/2009, -3/+9He's such a jerk for helping all those kids with malaria! >:-(
- pathouston22, on 05/08/2009, -1/+7Both. When you're young and just starting out in investing, you have no control or insider information. You are at the mercy of the stock market, which often does unlogical things (like shares going up on bad news). However, by now, he clearly has connections, and knows what's going on behind the scenes.
- inactive, on 05/08/2009, -0/+5He's brilliant. And if more people followed the fundamentals of what he teaches they would be better off, our politicians included.
- mauso, on 05/08/2009, -1/+6Buried because you suck. Not because of any other reason.
- Bdog2g2, on 05/08/2009, -0/+5Yup, I did forget that.
Peter Lynch has a similar point. He said if you're not sure about what stock to invest in, just go to the mall and observe the stores people walk into the most. Then go home and research them further. - endgame, on 05/08/2009, -0/+4That was a great & informative post. Thank you!
- unknamed, on 05/08/2009, -1/+5I've long held the belief that a large part of being ridiculously wealthy is having more than a bit of luck on your side. There are plenty of people out there who are very bright and who work their asses off but aren't wealthy. There can be only so many of these super rich people.
That's why I get a little irritated with people who make a point of saying "Well I deserve to be this rich, I worked really hard for it." There are a lot of people working their asses off who will never see one thousandth of the type of money Buffet has. - dygel, on 05/08/2009, -0/+4I don't deny that. But the premise of the headline is a loaded question. Brilliant or lucky? Well, any reasonable person acknowledges that there's a mixture of both.
- beesaretasty, on 05/08/2009, -1/+5I stopped reading when it started comparing buying stocks to flipping a coin (so sorry if it took a drastic turn after that). You don't become that rich on pure luck. He did his homework unlike idiots who buy stocks based on a coin flip or based on somebody typing on a forum BUY BUY BUY!!!!!!!
- Soupchicken, on 05/08/2009, -0/+4What a ***** stupid article.
- rotundo, on 05/08/2009, -0/+4I agree -- calling him lucky lets us think that we could do the same thing if only the cards fell right. It's a wonderful ego boost that lets us ignore all the consistent study, focus, and hard work that someone as successful as Buffet engages in.
It's no surprise that he got screwed up by all this stuff too, though. That has nothing to do with luck. It's simply this: he was brilliant and understanding the business growth cycle in a normal market environment. Now we're no longer in a normal market environment, so his knowledge isn't necessarily going to work any more. Perhaps when things stabilize down the road his techniques will work again. But for now the market has little to do with company performance and instead is tossed about by fear and hope and desperation, which are a lot less predictable. - dsting, on 05/08/2009, -0/+3he has been investing for almost sixty years. He made alot of money before he became an investor. And youre saying anyone could do that well? that is why he is the only one who has done it.
- JanTik, on 05/12/2009, -0/+3Warren was lucky and brilliant. But more – he has an intuitive worldview, or understanding of financial reality, that few can match.
Why do we call some people wise? Not because of their knowledge or their brainpower (although both helps), but because of the way they integrate the data into a coherent whole that closely corresponds to what is really going on. This ability helps them to zone in, indentify, and understand the most critical data likely to influence the future behavior of the system(s) they are studying. In short, they seem to know what will work and what not.
Albert Einstein (physics), Peter Drucker (management science), Pierre de Fermat (mathematics), René Descartes (philosophy), George Soros (global currency trading / investments), Bill Gates (software), Mahatma Ghandi (social change / politics), Mozart (music), and quite a few others all seem to have or had this ability.
This of course does not mean that they will always be successful. The world changes and what has worked in the past does not always apply to the future. But the magnificence of their insights makes them the giants of history.
The reason these folks are so much better that the rest of us is closely related to art: while we can appreciate the beauty, it seems to flow directly from their souls. This is why it is so difficult to follow their example – because no amount of analysis of their methods can truly explain the way their minds work. - xenuxenuts, on 05/08/2009, -0/+3Everyone who is successful is also lucky. Take Bill Gates, for example. He went to a high school that had better access to computers than most universities at the time. Take that away and there would be no MS. He also worked very hard.
- KimmyGibbler, on 05/08/2009, -0/+3My ouija told me to buy Microsoft in 1989, but then my magic 8-ball told me to sell in 1990 and, like a retard, I did. I should've stuck with the ouija, obviously
- whorunbartertwn, on 05/08/2009, -0/+3You make your own luck, usually thru hard work and wise decisions.
- wacked, on 05/08/2009, -0/+3both
- OrangeTide, on 05/08/2009, -0/+3A regular ouija will work.
- mike23w, on 05/08/2009, -0/+3Warren Buffett is a business man.
He buys great businesses first; if he can't do that then he buys stocks in great businesses.
He has consistently bought many great businesses and stocks spanning a period of more than 40 years to the tune of 60 billion dollars.
If he's lucky, then so is everyone else since he's done it better than every other person on this planet. - inactive, on 05/08/2009, -0/+3Of course it's both. The crazy thing is that he's not even invested much in the tech sector - besides his hard on for Google - because he never understood it.
- dsting, on 05/08/2009, -0/+3brilliant, luck only goes so far. how many recessions has he been through?
- 1jaxstate1, on 05/08/2009, -1/+4I'm gonna say 100% lucky.....so that why I can convince myself I can make just as much money as he did.
- josejimenez, on 05/08/2009, -0/+2At the top of the NASDAQ Dot Com 1.0 bubble, around the year 2000, investors were screaming that Buffett was too old and didn't get nor understand the new technology based internet connected web economy, and that Buffett was an irrelevant dinosaur. Then NASDAQ and the Dot Bomb 1.0 companies imploded during March 2001. Had Buffett listened to his Dot Com critics and sunk all of Berkshires' cash into tech companies, he would've lost 75% to 80% of his investment.
9 years after NASDAQ and tech crashed, NASDAQ is still only worth 33% what it was when it peaked around the year 2000. Adjusted for inflation, in real money, tech is worth about 25% what it was at the peak.
Except for Google, Cisco, Microsoft, IBM, Amazon and Oracle, tech stocks have been a horrible investment. - maz2331, on 05/08/2009, -0/+2Actually, he's been smart enough to remember what investing is - which is buying a piece of a real company. Too many investors aren't doing that, they are just looking at a stock symbol and a price, and the process as a casino.
- dsting, on 05/08/2009, -0/+2What do you know about him to say that he was lucky? I do not think luck plays much part in his business strategies.
- adavis99, on 05/08/2009, -0/+2Brilliant.
- Rhino2, on 05/08/2009, -0/+2APPL is ... err, was good to.
They are scheduled to fall though. - loki49152, on 05/08/2009, -0/+2Being brilliant often means knowing how to recognize and take advantage of "luck".
But no matter how brilliant a person is, that doesn't make them experts on everything. Buffett does believe some exceptionally silly things when it comes to social issues. - depro9, on 05/08/2009, -0/+2Who ***** cares!?
- TdotFUNK, on 05/10/2009, -0/+2Brilliant! I wish I could have known to be born to his parents, have all his experiences, thoughts and gained life experience before I was born!
- maz2331, on 05/08/2009, -0/+2A systemic panic affects the competent as well as the incompetents, but Buffet is at least positioned to ride out the turmoil and emerge less damaged than some of the "gambler investor" types.
- tzvika613, on 05/12/2009, -2/+3Brilliant and lucky people are known by those that they surround themselves with. A lot of credit for Mr. Buffet's success goes to his long-time business partner - Charles Munger.
It was Munger who convinced Buffet to obtain See's Candies by paying more than it was valued. " Analysts " said that the $25 million that was paid was way too much. Since it was obtained - some time in the early 70s - it has returned more than $1 billion in PRE-TAX earnings. - Logrusmage, on 05/08/2009, -1/+2How can you say the man is not greedy? WHy would he want all of this money otherwise?
Stop painting greed as a bad thing. Greed cannot be bad, only actions people take when they give is so totally to their greed that they ignore their values can be bad. - gkiltz, on 05/09/2009, -0/+1He has a "sixth sense" about money. People who have that can make a certain amount of their own luck.
There are certain people out there who, when life hands them lemons just make their first million in the Lemonade business, the sell it and move on!
Buffett is one of those people! - sizzzzlerz, on 05/08/2009, -0/+1His investing philosophy hasn't changed since he started trading in stocks back in the 50s. He certainly didn't start out with money. He actually started running his own businesses in high school and even started investing in stocks at that time. But it was his own money, not family money that got him started.
If doing vast amounts of research before choosing which stocks to buy is lucky, then, yes, you can say he was lucky. Me, I'd call it a whole lot of hard work with a brilliant investment-oriented mind to correlate and remember all that data. I own some of his stock (not enough, however) and I respect him and his insights into the market more than any other investor today. - dontreplytome, on 05/08/2009, -0/+1argoff, nice completely ignorant post there. You win asshat of the day.
- wissler, on 05/08/2009, -3/+4Since we don't have anything close to a free market, it's difficult to judge businessmen. The people at the top of *this* system are likely the best at gaming it, not necessarily the best at producing things of value.
- Rudegar, on 05/08/2009, -1/+2dugg because the graph looks like a .net component i once used
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