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The name Warren Buffett issynonymous with success and prosperity inthe business world. There are many books written about how Buffettinvests and how you can invest just like him—but this is notone of them. This book is not about how Buffett invests, butrather, it is about his highly successful business managementprinciples and practices. It is about his way of communicating withand treating employees and shareholders fairly and honestly;responsible corporate governance; ethical behavior; patience ...
The name Warren Buffett issynonymous with success and prosperity inthe business world. There are many books written about how Buffettinvests and how you can invest just like him—but this is notone of them. This book is not about how Buffett invests, butrather, it is about his highly successful business managementprinciples and practices. It is about his way of communicating withand treating employees and shareholders fairly and honestly;responsible corporate governance; ethical behavior; patience andperseverance;admitting mistakes; having a passion for work; andhaving fun and a sense of humor. Warren Buffett on Business is apractical management handbook on the Buffett/Berkshire Hathawaymodel of effectively managing a business, large or small.
Drawing from carefully selected Berkshire Hathaway shareholders'letters written over four decades (1977-2008), Connors presentsBuffett's own words on corporate culture, communication, riskmanagement, time management, crisis management, executivecompensation, capital allocation and management, and much, muchmore. Taken as a whole, they show that, when you strip it all away,effective business management the Warren Buffett way is remarkablyobvious and simple. As Buffett himself describes his businessprinciples, they are "simple, old, and few."
An informative and inspiring book on Berkshire Hathaway'sbusiness management practices, all in Warren Buffett's own words,Warren Buffett on Business provides direct, hands-oninformation on how to effectively manage a company that willconnect with senior executives, managers, entrepreneurs, andbusiness students.
Chapter 1 Shareholders as Partners 1
"Although our form is corporate, our attitude ispartnership."
Chapter 2 Corporate Culture 5
"It takes 20 years to build a reputation and fi ve minutes toruin it. If you think about that, you'll do thingsdifferently."
Chapter 3 Corporate Governance 15
"At Berkshire, board members travel the same road asshareholders."
Chapter 4 Berkshire Managers 29
"They love their businesses, they think like owners, and theyexude integrity and ability."
Chapter 5 Communication 33
"As managers, Charlie and I want to give to our owners thefinancial information and commentary we would wish to receive ifour positions were reversed."
Chapter 6 Acquisition of Nebraska Furniture Mart 43
"We gave Mrs. B a check for $55 million and she gave us herword. That made for an even exchange."
Chapter 7 Acquisition of GEICO 51
"The security I like best"
Chapter 8 Acquisition of General Reinsurance 57
"Long ago, Mark Twain said: 'A man who tries to carry a cat homeby its tail will learn a lesson that can be learned in no otherway.' If Twain were around now, he might try winding up aderivatives business. After a few days, he would opt forcats."
Chapter 9 The Assessment and Management of Risk 71
"Don't think, however, that we have lost our appetite for risk.We remain prepared to lose $6 billion in a single event, if we havebeen paid appropriately for assuming that risk."
Chapter 10 Executive Compensation 77
"At Berkshire . . . I am a one man compensation committee whodetermines the salaries for the CEOs of around 40 significantoperating businesses. How much time does this aspect of my jobtake? Virtually none. How many CEOs have voluntarily left us forother jobs in our 42-year history? Precisely none."
Chapter 11 Time Management 83
"When my mother got to be eighty the most important thing in howlong you live is how long your parents live. I got her an exercisebike, put her on a strict diet, and she's just piling up the yearsfor me."
Chapter 12 How to Manage a Crisis 87
". . . I will attempt to do it in the manner of a fellow thathas never met a lawyer."
Chapter 13 Management Principles and Practices 99
"Simple, old and few."
Chapter 14 Executive Behavior 131
"Many CEOs attain their positions because they possess anabundance of animal spirits and egos. . . . When such a CEO isencouraged by his advisors to make deals, he responds such as woulda teenage boy who is encouraged by his father to have a normal sexlife. It's not a push he needs."
Chapter 15 Mistakes I've Made 141
"I can look back on every year in terms of mistakes I've made.The dumbest mistake I ever made was, will probably be in thefuture."
Chapter 16 Personal Investing 151
"Your goal as an investor should simply be to purchase, at arational price, a part interest in an easily understandablebusiness whose earnings are virtually certain to be higher fi ve,ten, and fi fteen years from now."
Chapter 17 Buffett, the Teacher 165
"If I talk to 50–60 year olds, basically they want to beentertained by my predictions and if I talk to 20 year olds or even25 year olds, they ask me the questions on their minds. . . . Theidea is that they listen and you may change some lives."
Chapter 18 Humor and Stories 175
"In the words of the prophet Mae West: too much of a good thingis wonderful."
Appendix A Warren E. Buffett, A Chronological History 181
Appendix B Berkshire Hathaway Inc., An Owner's Manual,Owner-Related Business Principles, January 1999 189
Appendix C Berkshire Hathaway Inc., Code of Business Conduct andEthics 201
Appendix D July 23, 2008, Memo to Berkshire Hathaway Managers209
Appendix E Berkshire Hathaway Inc., Corporate GovernanceGuidelines, as Amended on February 27, 2006 213
Appendix F Intrinsic Value 219
Appendix G The Superinvestors of Graham-and-Doddsville 223
Appendix H Berkshire's Corporate Performance versus the S&P500 237
Appendix I Berkshire Hathaway Common Stock—Year-End StockPrices 241
About the Author 259