Monday, March 15, 2010

Warren Buffett minus $47 Billion

The name Warren Buffett has become synonymous with being rich in the same way that you can replace "Washington" with "the United States government" or "Wall Street" with "the investment community." When people say "oh, he'll be Warren Buffett some day" they just mean he'll be really rich, not necessarily that he'll have any of the other characteristics that Buffett has.

I often wonder what Warren Buffett- the person, not the symbol- thinks about that. My hypothesis is that he would be slightly annoyed- I get the feeling that he is more interested in the kind of person he is than how many billions he has on a given day. I think he would also be annoyed that people put the money before his character, which is the opposite of how he thinks of himself and how he would want others to look at him.

As humans looking to quickly categorize someone and move on, they look for a person's "Most Distinguishing Characteristic"- the max-10-word description of the person that distinguishes them most from other people. For Buffett it's his billions, for Ben Casnocha it's that he founded a successful company at such a young age, for Chris Guillebeau it's that he's trying to travel to every country in the world by age 35, for somebody else it might just be their occupation- they're a sanitation engineer. The mistake that people make is judging the person as a whole based on their Most Distinguishing Characteristic. That results in judgments like Buffett's just a greedy capitlalist, Casnocha was greedier earlier, etc. (both untrue). All of these people have qualities that distinguish them more than the 2-second description of who they are but nobody has time to sit around and listen to the whole life story of everyone they run into. Equating someone with their Most Distinguishing Characteristic is a heuristic, a hack designed to save time.  The qualities that I most admire about Buffett are those unrelated to the money- which as a result are those that most people overlook- the discipline, the modesty, the intelligence, the self-concept, the no-nonsense attitude. It's really about the kind of person that Buffett is. A lot of people would want to know Warren Buffett simply because he's worth 47 billion dollars, but whether he was worth 47 billion dollars or I would want to be able to have a conversation with him. He does have a few quirks like having a girlfriend while he was married and being utterly useless around the house, but for the most part he is just a really good guy (a phrase that fits here very well, but has been way overused). He's taken a salary of $100,000 for the past 25 years and doesn't spend lavishly. He has stuck to the same simple values about life before and after his success with Berkshire and he has the capacity to look through the noise and hype to see the truth.  I would encourage reading his annual letters to Berkshire shareholders- his personality comes through well.

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