83 Reasons We Love Warren Buffett

Today is Warren Buffett's 83rd birthday. Each year, I celebrate the Babe Ruth of Investing's birthday by adding another reason we love our hero.

1. Intricate, occasionally contradictory complexity hides beneath the "Aw, shucks" folksy charm. As a Forbes writer once put it, "Buffett is not a simple person, but he has simple tastes."

2. Many people talk about avoiding the madding crowd, but Buffett actually does it by living 1,250 miles away from Wall Street.

3. He has a fortress-like internal scorecard on all things investing, yet a vulnerable, endearing external scorecard on many aspects of his personal life. See his penchant for seeking mother figures.

4. His perspective: "In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

5. He is that guy in school who tells you he may have failed the test -- only to bust the top of the curve.

6. His time frame for the long run consistently exceeds his life span.

7. He says it better: "Someone's sitting in the shade today because someone planted a tree a long time ago."

8. He's human. He fears nuclear war and his own mortality. He's frequently more adept at business relationships than personal ones. He can hold a grudge. His hero is his daddy.

9. Classic line: "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."

10. Once branded a stingy miser (rightly or wrongly), Buffett has evolved (assuming it wasn't his intention from the start) into one of the most effective philanthropists I know. After growing his potential givings at a 20% compounded rate per year, he set a plan to give most of it away.

11. Perhaps as importantly, he put ego aside and outsourced his charitable decision-making to the Bill & Melinda Gates Foundation. Circle of competence at its finest.

12. "I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years." Contrast that with computer algorithm-based trading, day trading, and some of the moves you've made in your own account.

13. Buffett's smarter than you and I, but he's kind enough to let us feel otherwise.

14. David Sokol was once an heir apparent and arguably Buffett's most trusted operations guy. But when Sokolgate emerged, Buffett stayed true to his word: "We can afford to lose money -- even a lot of money. But we can't afford to lose reputation -- even a shred of reputation."

15. "Derivatives are financial weapons of mass destruction." He said it early, and we are reminded of it often.

16. In a glimpse of the nuance that some commentators call hypocrisy, Buffett uses derivatives himself. But he does so in a way that doesn't threaten the entire financial system and explains exactly why in his annual shareholder letters.

17. He doomed himself from ever holding public office: "A public-opinion poll is no substitute for thought."

18. I like juxtaposing these two quotes: 1) "It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction." 2) "Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway."

19. "You only have to do a very few things right in your life so long as you don't do too many things wrong."

20. He has the ability to resist the allure of the quick fix or quick buck when longer-term dynamics are at play.

21. Not sure if this quote came before or after the Internet: "Let blockheads read what blockheads wrote."

22. For those hoping to become famous and respected, he's a testament that the challenges and doubts keep coming regardless of the length of the track record. He has publicly prevailed so far.

23. An investing truism: "Price is what you pay. Value is what you get."

24. The business side of that investing truism: "Your premium brand had better be delivering something special, or it's not going to get the business."

25. He uses colorful language and analogies when drab jargon could do the trick.

26. Boring example: moat vs. competitive advantage.

27. Not-so-boring example: sex.

28. "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

29. Classic line: "Only when the tide goes out do you discover who's been swimming naked."

30. He backs up his saying, "Our favorite holding period is forever," by keeping past-their-prime subsidiaries that others would "spin off to unlock value."

31. His Robin (Charlie Munger) can kick your Batman's butt.

32. He makes loophole-free handshake deals.

33. "Risk comes from not knowing what you're doing."

34. Quote No. 1 on keeping it simple, stupid: "The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."

35. Quote No. 2 on keeping it simple, stupid: "There seems to be some perverse human characteristic that likes to make easy things difficult."

36. The Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  )  annual meeting is an unrivaled spectacle in investing, truly living up to its billing as the Woodstock for Capitalists.

37. One of the most concise summations of why America is great: "There are 309 million people out there that are trying to improve their lot in life. And we've got a system that allows them to do it."

38. Trash-bin-diving caution No. 1: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

39. Trash-bin-diving caution No. 2: "Time is the friend of the wonderful company, the enemy of the mediocre."

40. He's an eternal optimist in a sound-bite culture that often rewards pessimists.

41. His shareholder letters reveal an artisan-like craftsmanship only seen when the proprietor cares deeply about his creation.

42. The contrarian credo: "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

43. He recognizes that genius fails: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

44. Like so many great thinkers, Buffett is able to ignore noise and whittle a decision down to its core variables. After he explains those variables, the decision sounds elementary.

45. Why banking can be dangerous: "When you combine ignorance and leverage, you get some pretty interesting results."

46. He allows me to see the name Buffett without thinking of Jimmy.

47. Buffett maintains a high thought-to-speech ratio.

48. Buffett's librarian fantasy: "If past history was all there was to the game, the richest people would be librarians."

49. He converts a deadly sin into a virtue: "You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing."

50. Averaging 20% returns for almost half a century results in beating the S&P 500 78-to-1!

51. Even though he has fewer and fewer meaningful investing options because of the size of Berkshire Hathaway, he continues to wow us.

52. On a chili-dog-and-onion-ring-flavored note, Berkshire Hathaway owns Dairy Queen, my favorite fast-food chain.

53. Many of Buffett's managers were wildly successful entrepreneurs before selling out to Berkshire. Convincing successful, headstrong, boss-less superstars to subjugate themselves, and keeping those people motivated and happy, is quite a feat.

54. On a related note, Buffett doesn't micromanage -- good thing, with an empire this large.

55. He gets doubted again and again and again and proves the doubters wrong most of the time. Yet you never hear him say, "I told you so."

56. Well, maybe sometimes he gloats. Harvard Business School rejected him, which led him to study under his mentors Benjamin Graham and David Dodd at Columbia. His "How do you like me now?" statement: "Harvard did me a big favor by turning me down. But I haven't made any contributions to them in thanks for that."

57. He has become America's de facto investing teacher. And he has done so willingly.

58. Perhaps my favorite Buffett line: "We like things that you don't have to carry out to three decimal places. If you have to carry them out to three decimal places, they're not good ideas."

59. Not that he can't be ruthless, but Buffett tends to look for win-win situations where possible. Contrast that with the Wall Street art of "ripping the face off" of clients.

60. He's often described as a "learning machine," extending his natural abilities and allowing him to make behemoth investing decisions over the span of just hours.

61. He added to Ben Graham's teachings with the help of that learning ability and Munger's counsel.

62. Now is a good time to point out that companies' annual reports, which are available to all, are the primary fuel in his learning machine. He reads them voraciously to compare and contrast companies and build his business knowledge base. See the next point.

63. When asked what the most important key to his success was, Buffett answered, "focus." His biographer Alice Schroeder elaborates: He has "focus like you have never seen on anybody else." For good or ill, Buffett's entire life has been dedicated to investing. It's much harder than he lets on.

64. There are plenty of business fish in the sea: "There are all kinds of businesses that I don't understand, but that doesn't cause me to stay up at night. It just means I go on to the next one, and that's what the individual investor should do."

65. How many people can pull off being a contrarian by buying shares of Coca-Cola?

66. Even in an investing world full of Buffett students and imitators, he manages to surprise.

67. He takes every legal, ethical advantage available in the current system, but he lobbies for a better system. For example, he supports higher taxes for the rich, more severe estate taxes, and a level playing field. As he puts it, "I don't like anything where the bottom 20% keep getting a poorer and poorer deal."

68. He is grateful for the advantages he has had in life -- like many of us, he won the "ovarian lottery."

69. When he talks, E. F. Hutton listens.

70. Like many geniuses, he is frequently the confounding exception to the rule. For example, Berkshire Hathaway has never paid a dividend and only started share repurchases recently. It also doesn't split the chairman and CEO roles. And we shareholders thank him for it.

71. Buffett buys what he knows (and frequently loves), but he doesn't overpay out of affection. He has the discipline to wait decades for the right opportunity.

72. He gives credit to his direct reports.

73. Not only is Buffett a great investor and manager, but he's one hell of a writer. My jealousy grows.

74. He once picked up a date in a hearse he co-owned.

75. Before making his money work for him, he worked for his money early on with a series of jobs, schemes, and ventures. These included a paper route, selling chewing gum door to door, a pinball business, a sales job at J.C. Penney's, caddying, marking up refurbished golf balls, and founding a horse-racing tip sheet.

76. He's a permabull -- on women.

77. It's very possible that the house you live in is worth more than the house Buffett lives in -- the house in Omaha he bought in 1958.

78. Over the years, he has relied on a similar set of answers to oft-asked questions. That his philosophy has stayed stable throughout that time is remarkable.

79. His wealth has bought him the ultimate trophy: He does whatever he wants to do just about every single day.

80. He's the outsized calming influence a lot of us need. From his biography Snowball: "If a tornado were barreling straight toward Kiewit Plaza [where his office is], Buffett would say that things were 'never better' before mentioning the twister."

81. Anyone who can make the hyper-opinionated Charlie Munger regularly utter "I have nothing to add" must be saying something impressive.

82. When his time to step down finally comes, it will take a village (a CEO, a chairman, and multiple portfolio investors) to perform his current responsibilities.

83. That said, he fully expects this list to one day reach well into the triple digits. And I look forward to adding those lines. Happy birthday, Mr. Buffett!

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 30, 2013, at 9:51 AM, triple33 wrote:

    10% income tax on any type of income (individual, business, corporate, capital gains, etc.) with first $30,000 exempt per individual - no other deductions beyond business expenses., i.e. married couples (gay or straight) would exempt $60,000 - no marriage discrimination.

    10% national sales tax with every tax filer getting up to $3,000 check from gov't to exempt up to 1st $30,000 (based on previous year filed taxed return). The unreported cash economy is huge!

    10% net worth tax on individual assets above $1.1 billion including charities owned/controlled by an individual (they build themselves buildings and put their art collections in them with lavish perks for themselves.) Now that is progressive! So Bill Gates has personal NW of $54 billion plus controls his charity of $25 billion, so he would owe a tax of $7.9 billion on his $79 billion. Every year until he gets to $1.1 billion! Warren Buffet said that once you reach $500 million in NW there is pretty much nothing you can't buy. With the exemption of $1.1 billion Bill Gates and the like will still have plenty of NW left to rule the world! Think of it like property taxes on your house.

    10% inheritance tax above $10 million - eliminate all trusts and other tax dodges.

    Limit the tax code to 100 pages. It may have to be small 7pt font, but the current version is written for the Forbes 400.

    Ten percent is easy to calculate!

  • Report this Comment On August 30, 2013, at 1:37 PM, mrmolar119 wrote:

    And he has the morals of an alley cat

    Lloyd

  • Report this Comment On August 30, 2013, at 7:51 PM, buzion wrote:

    Great compilation!

    Jokes, Facts and Words of Wisdom from Warren Buffett:

    http://buzzonomics.wordpress.com/2013/08/30/jokes-facts-and-...

  • Report this Comment On August 30, 2013, at 10:04 PM, dgmennie wrote:

    It constantly amazes me that so much space is afforded to Warren Buffett by the Motley Fool. Yes, he has amassed billions through a lifetime of investing genius (or whatever). But is is profusely unclear how this one enormous personal success can actually help anyone who simply wants to create a modest, dependable income stream to cover their retirement years. Perhaps Buffett, Gates, and all those whose boats have been lifted beyond capitalism's stratosphere would like to put their philanthropic genuflections aside foir awhile, pool their vast resources, and help us out?

    Oops! I just thought I heard a 1000-lb pin drop. I'm pretty sure the check is not (and never will be) in the mail for me.

  • Report this Comment On August 30, 2013, at 11:59 PM, Rebud wrote:

    dgmennie:

    The old adage "it takes money to make money" is still in force today. There is enough information on "The Buffet Way" for anyone who wants to put in the effort to make a decent return on their investments. But then there also those who can't or won't understand his philosophy or technique. Handouts are for those below the capability line.

  • Report this Comment On August 31, 2013, at 11:04 AM, dgmennie wrote:

    Rebud

    "There is enough information on "The Buffett Way" for anyone who wants to put in the effort to make a decent return on their investments"

    This claim is either not true or as yet unproven. Where are the testimonials from hordes of small investors who have actually done this? All we hear about regularly are the ever more billions piled up by Buffett and his cohorts. Only now these folks are trying to buy themselves an honorable place in history that a pile of money alone cannot secure.

    Don't want to help me out? Then perhaps the overly wealthy could get together and keep Detroit from going under. In fact there are lots of projects domestic with no Nobel Prize attached that cry out for innovation and cash. Who will step up to the plate?

  • Report this Comment On September 01, 2013, at 9:35 AM, oberta wrote:

    Besides Coca-cola I love the booklet: "From Paper-boy to multi.billionair" a reproduction of the investment strategy of the best investor of the world!

  • Report this Comment On September 01, 2013, at 12:26 PM, JeffParrel wrote:

    Average Warren Buffett's stock holding period is 4.5 years.

    One should invest differently at different age.

    It is interesting to see Warren Buffett's stock holding periods changes with the age.

    In any case, I do not fall in love with any stock and use stock forecast algorithmic system to decide on my enter and exit timing with good results so far

  • Report this Comment On September 01, 2013, at 5:12 PM, lowmaple wrote:

    #81. I just thought he was tired. And to any out there, money helps but as in life in general, it takes guts and determination. So stop making excuses!

  • Report this Comment On September 01, 2013, at 7:23 PM, showmethefacts wrote:

    I'm not sure why triple33 posted his tax reform ideas here (the first post here). Perhaps it was because Buffett has said sensible things about the absurdity of our tax code.

    The problem with sensible approaches is that we live in a kelptocracy (or better yet, a bribe-ocracy) instead of a democracy. The uber-rich ( Mssrs. Buffett and Gates excluded) have hijacked the political process through their superPACs and ability to spend limitless sums to influence elections. The result: an obstuse system where a guy like Romney pays 13.9% on the only year he would reveal (think it's his best year?), but I pay 39.6% because I work hard but am not wealthy enough to earn all my income off capital gains and municipal bonds... Why do we reward passive income and punish hard work? Easy: the people who earn passive income control the rule-making.

    Republicans would block any attempt to reform things in a fair way -- because their Koch Bro backers have already won. The Rs showed their colors when they voted (all of them, with complete solidarity) against a surcharge on income above $1 million. In short, they're not for us. They are for the super-rich. The 5 Republican-appointed S. CT justices voted (5-4 of course) to enshrine unlimited legal bribery in the Citizens United decision.

    The Dems have been too timid to call much attention to this terrible system that has contributed, perhaps more than any other factor, to the extreme concentration of wealth at the very top. Obama seems smitten by the Too Big To Fail crowd, as were Bush and Clinton.

    We need a revolt, led by somene like Elizabeth Warren, to rebalance things along the lines triple33 proposed.

    And yes, he is right that there is a HUGE undergound economy that our current tax code, no matter how skewed to help the rich, will neer capture. But a sales tax would. Drug dealers, strippers, waiters and the many who deal in a cash economy all buy things; they just don't report income. Think about it. Then vote the Republicans (and bought Dems) out.

  • Report this Comment On September 03, 2013, at 3:00 PM, NYCDOG wrote:

    I presume the reason Triple33 proposed a quite decent (but not flawless) proposition tax-wise here is that, unlike Buffett, who never wants to put his accumulated bankroll on the altar of fairness but instead wants to confiscate more hard-earned INCOME, in the true spirit of "I have mine, now pull up the ladder". Also Triple 33's flat rates are low enough to stimulate needed growth, unlike anything the confiscaticators like "Faux Native American" Liz Warren would ever propose in her "politics of envy"

    I always chuckle when the rich Koch Bros' PACs for their free market politics are skewered but billionaire uber-socialist George Soros many, many, political/election organizations somehow escape scrutiny from the True Believers

  • Report this Comment On September 08, 2013, at 4:17 PM, Mega wrote:

    A few of these are originally Mungerisms I think. For example, "learning machine".

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