Comments on: Has Warren Buffett’s Management Style Goosed Returns?

By: Andres Arias

Andres Arias — Wed, 15 Jul 2009 14:59:28 +0000

I am looking for something bad about Buffett. I can’t find anything. He seems to be a genuinly good guy. I am researching to see if he has used any leadership styles that have been bad for business.

By: Greg

Greg — Mon, 26 Feb 2007 15:18:21 +0000

You should compare the chart you put up here— which is basically Berkshire versus the S&P– to the chart when Buffett was running his investment company in the 60s. In Berkshire’s case, he is essentially a CEO, in the latter case he was a minor investor who really had no major influcence on the companies he invested in. THEN you’ll have a better answer to your question.

By: Ryan

Ryan — Wed, 14 Feb 2007 23:16:35 +0000

One thing this does not consider is that Buffett was a highly accomplished investor when he was running his private investment partnership in the 60’s. He managed returns far in excess of the market during that time with only minority positions that did not give him any influence over most of the firms he invested in.

By: Manny

Manny — Sun, 17 Dec 2006 17:51:20 +0000

In a recent video, the most extended I’ve seen, Buffet reveals some telling facts about his investing style. The closest term I can see for it would be Von Mises’ “praxeology”. You can see if I’m right…my post is here:
http://successbooks.blogspot.com/2006/11/success-secrets-warren-buffet-video.html

By: Bob

Bob — Sat, 16 Dec 2006 17:51:34 +0000

Simply stated, Buffet takes a long term view of investing as opposed to buy and sell fund managers. That he has been able to consistently outperform the S$P 500 by a signigicant margin is no small feat. Read some of his letters in his annual reports to get a better idea of how he looks at the company.

By: ski

ski — Sat, 16 Dec 2006 15:49:29 +0000

rob

this is very good insight… i have long preached the ills of the quarterly earnings statements. i only work with small privately held firms, and the CEO that as jim collins says, is “the right” person. the right team, with freedom from stupid short-term, ill-conceived goals, must (and wil) outperform the field.

-ski

By: Foobarista

Foobarista — Fri, 15 Dec 2006 21:04:15 +0000

Buffett is more of an “uber-investor” than a true CEO in the “executive” sense of closely managing his companies. This allows him to take the long view, simply because he can’t be forced out or otherwise threatened in his position.

It also allows his CEOs to be less distracted by having to market their ideas and strategies to Wall Street.

In a sense, this is a powerful argument for private equity, as one would imagine that a “Buffett-style” of interacting with investors would be more likely to develop with private investors than with the public markets…

By: laurence haughton

laurence haughton — Fri, 15 Dec 2006 18:24:41 +0000

IMHO it is wrong to look for the specifics… the exact practices at BH.
The real answer is in this sentence from your critique “many of the managers talk about how they love working for him and being a part of Berkshire”.
Rob if you “love” what you do, and where you do it you’ll put all your heart into it. Then, if you have the right stuff (so to speak), you become an above-average achiever. Buffett finds people (and companies) with the what he believes is the right stuff. He has a specific recipe and he follows it. Then Buffett gives these right people what they need to love being with him.
I know it’s cliché but (almost) “all you need is love” to get above average performance.

By: Rob

Rob — Thu, 14 Dec 2006 22:55:57 +0000

Ok, I think it works now.

By: Rob

Rob — Thu, 14 Dec 2006 20:38:27 +0000

Doug,
The red line is Buffet’s performance. The other is S&P500. I can’t figure out how to change them in Swivel, but once I do I’ll update the graphs.