Warren Buffett on Business: Principles from the Sage of Omaha

Warren Buffett on Business: Principles from the Sage of Omaha


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Warren Buffett on Business: Principles from the Sage of Omaha by Warren Buffett

The proven business principles of Warren Buffett

Warren Buffett is one of the most admired and prolific investors and managers in corporate America. Warren Buffett on Business is a timeless guide to strategies that can help you run a successful business. This book is a one-of-a-kind collection of Buffett's letters to the shareholders of Berkshire Hathaway written over the past few decades, and in a clear, simple style distills the basic principles of sound business practices.

Through Buffett's own remarkable words, this practical management handbook shares valuable insights on communicating with, and treating employees and shareholders fairly; responsible corporate governance; ethical behavior; patience and perseverance; admitting mistakes; and having a passion for work.

  • Contains priceless pearls of business and management wisdom, woven into a delightful narrative
  • Designed in an accessible manner and organized by business and management topics with strong lessons from Buffett
  • Provides direct, hands-on information on major topics concerning managers, entrepreneurs, business students, and anyone interested in business

Informative and inspiring, this unique book puts Warren Buffett's business beliefs in perspective.

Product Details

ISBN-13: 9781118879085
Publisher: Wiley
Publication date: 12/02/2009
Pages: 272
Sales rank: 837,315
Product dimensions: 6.00(w) x 8.90(h) x 0.70(d)

About the Author

Richard J. Connors is a Registered Investment Advisor and owner of Connors Investment Management Company in St. Louis, Missouri. Beginning in 2006, he has presented a class on Warren Buffett at the Washington University in St. Louis Lifelong Learning Institute. He is a graduate of the University of Notre Dame Business School and the St. Louis University School of Law.

Table of Contents

Acknowledgments ix

Introduction xi

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

Notes 243

About the Author 259

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