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Warren Buffett and the One-Legged Man, Ep. 47

May 24, 2018

This week on Just the Tips Dean and I sit down to process an amazing experience I had recently, where I had the opportunity to see Warren Buffett at the Berkshire Hathaway shareholders meeting in Omaha, Nebraska. I had high expectations for the event, and I have to say it was even more amazing than I thought it would be. So on this week’s episode, Dean and I talk about what it was like going to such a huge event as that, what lessons I learned and what perspectives I gained, and how I ended up getting a selfie with the Kool-Aid Man.

Not every business needs to be giant to be successful

Berkshire Hathaway is an enormous conglomerate, with ownership stakes in brands like Geico, Coca-Cola, Heinz. You name it, Berkshire Hathaway likely owns a piece. They do about $262 billion a year. And if you had to guess, how many people would you say are on their core team? The answer is 25. Just 25 people running one of the largest corporations with one of the wealthiest people in the world at its helm. And half of that core team is comprised of auditors, who are there to ensure the numbers reported to them are accurate. So if you’re the type of person who thinks you will never have a “big” company without scaling up to hundreds or thousands of employees, take a look at one of the biggest.

Q&A with Warren

So if you go to the Berkshire Hathaway Shareholder Meeting, it really is like nothing you’ve seen before. The first day is a trade show, as big as any trade show you’ve seen. But the difference is that the companies represented in the trade show are the companies BH owns. And then on the second day, the company rents out a sports arena, and then 10,000-plus people file in, and there are Warren Buffett and Charlie Munger, 87 and 94 respectively, on stage. And they sit and they answer questions for six hours. They’re able to sit there and answer every question in detail, and they give honest answers. Warren Buffett himself said there were days when he didn’t feel like the company was making progress. Every company has its dark days, even the ones in the 12 figures.

One-legged man in an ass-kicking contest

I took away so many amazing lessons from the event, and you’ll have to listen to this week’s episode of Just the Tips to get them all. But some bullet point takeaways: Berkshire Hathaway isn’t into flipping companies. They don’t want to find a business in turmoil and turn it around, replace the CEO, etc. They’re looking for successful businesses with solid plans to invest in their growth. Another insane thing? Warren Buffett said he reads for five to six hours every day. Remember that the next time some guru tells you that you need to be thinking ROI and grinding every hour of the day. And Charlie Munger told the crowd that if you’re not learning every day, you’re like a one-legged man in an ass-kicking contest. If that doesn’t entice you to listen to this week’s Just the Tips, I don’t know what will.

Outline of This Episode

  • [3:15] Berkshire Hathaway shareholders meeting
  • [5:50] What the event was like
  • [9:55] The Berkshire approach
  • [18:48] Huge takeaway from the meeting
  • [22:26] Business owners are allocators of resources
  • [28:47] Know your numbers

Resources & People Mentioned

Musicfor “Just The Tips” is titled, “Happy Happy Game Show” by Kevin MacLeod (http://incompetech.com) Licensed under Creative Commons: By Attribution 3.0 License

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