ON INVESTING WARREN BUFFETT: FORBES LIST OF 100 BUSINESS MINDS
Warren Buffet writes an Essay on Forbes Centennial Celebration. He was picked as one of 100 Minds that Influence our world.Don't just satisfy your customers -- delight them...Anybody who has happy customers is likely to have a good future...Warren BuffetClick To Tweet
Forbes- When I was 7 or 8 years old, I was lucky in that I found a subject that really interested me — investing. I read every book on that topic in the Omaha Public Library by the time I was 11. Some of them more than once. My dad happened to be in the investment business, so when I would go down to have lunch with him on Saturdays, or whenever it might be, I would pick up the books around his office and start reading. (If he’d been a shoe salesman, I might be a shoe salesman now.)
I bought the book that became the largest influence on my investing life by accident, while I was at the University of Nebraska. I read and reread The Intelligent Investor, by Benjamin Graham, about half a dozen times — it’s incredibly sound philosophy, very well written and easy to understand. And it gave me an investment philosophy that I’m still using today.
HOW TO SUCCEED IN INVESTING
That strategy is to find a good business — and one that I can understand why it’s good — with a durable, competitive advantage, run by able and honest people, and available at a price that makes sense. Because we’re not going to sell the business, we don’t need something with earnings that go up the next month or the next quarter; we need something that will earn more money 10 and 20 and 30 years from now. And then we want a management team we admire and trust.
My favorite investment, one that embodies this philosophy, is Geico, which I learned about when I was 20 years old, because I got on a train and went down to Washington and banged on the door on a Saturday until Lorimer Davidson, who would later become CEO, responded. He answered my questions, taught me the insurance business and explained to me the competitive advantage that Geico had. That afternoon changed my life.
Here’s a product that now costs, on average, about $1,800 a year. People don’t want to buy it — but they do want to drive. And they hope they never use it, because they don’t want to have an accident. And Geico was a way to deliver that product for less money than people had been paying. When Berkshire bought control of it in 1995, it had about a 2% market share; now it has a 12% market share, and we are saving the American public perhaps $4 billion a year against what they would be paying if they had bought insurance the way they had before. A simple idea when Leo Goodwin founded the company in 1936. The same simple idea now.
“Don’t just satisfy your customers — delight them…Anybody who has happy customers is likely to have a pretty good future. “
Ben Franklin said it a long time ago: “Keep thy shop and thy shop will keep thee.” The quaint language aside, it means don’t just satisfy your customers’ delight them. They’re gonna talk to other people. They’re going to come back. Anybody who has happy customers is likely to have a pretty good future.
ONE NEEDFUL THING
But ultimately, there’s one investment that supersedes all others: Invest in yourself. Address whatever you feel your weaknesses are, and do it now. I was terrified of public speaking when I was young. I couldn’t do it. It cost me $100 to take a Dale Carnegie course, and it changed my life. I got so confident about my new ability, I proposed to my wife during the middle of the course. It also helped me sell stocks in Omaha, despite being 21 and looking even younger. Nobody can take away what you’ve got in yourself — and everybody has potential they haven’t used yet. If you can increase your potential 10%, 20% or 30% by enhancing your talents, they can’t tax it away. Inflation can’t take it from you. You have it the rest of your life.
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