03 May 13 Life Lessons from Warren and Charlie: Reporting back from 2010 Berkshire Hathaway Shareholder’s Meeting
Written by: Scott Dinsmore
Average Reading Time: 5 minutes
For one day each year, any and all of us get the chance to listen to 6.5 hours of live questions and answers with Warren Buffett and Charlie Munger (and even ask one of your own if you’re lucky). This year almost 40,000 people took advantage of the opportunity. I was one of them. As I was last year and the two years prior to that. The weekend has become an annual highlight that words cannot describe. Despite the fact that it’s important for our business in the investment partnership my partner and I run, this is one of the best weekends of the year for learning about life and personal improvement. I love it.
The topic of the day: Life Lessons.
To most people’s surprise, this is not simply another dry talk on investing and business. It’s far from it. The great majority of the meeting revolves around lessons in life, relationships, education and career decisions. These guys have experienced over 160 combined years of amazing life experiences and seen success (and even some failure) on numerous fronts. They are brilliant and happen to be two of the best teachers I have come across in all my reading and learning. And the price of admission…free! Ideally you should be a shareholder but there are plenty of other ways to get into the meeting if you’d like. I have to share some of the most recent pearls with you all. I’ll stick to broader life lessons, but feel free to send a note if you’d like more from the business and investing side.
13 Life Lessons from Warren and Charlie:
1. Lose money and I will forgive you, but lose even a shred of reputation and I will be ruthless [Warren]. This has been echoed across the business world for years and it applies to us all. Life is too short to cut corners to make an extra buck. Wealth can always be recreated but reputation takes a lifetime to build and often only a moment to destroy. As Warren says, “we will not trade reputation for money.”
2. The best defense in a tough economy is to add the most you can to society. Your money can be inflated away but your knowledge and talent cannot [Warren]. No matter the external circumstances, you are always in control of your talent, learning and passion for life. “There will always be opportunities for talent” as Warren says.
3. We get worried when people start to agree with us [Warren]. The best fruit is found out on the limbs. The road less traveled makes all the difference. Make a rule to always stay on the side of the minority in your life’s path and you will likely be greatly rewarded and you’ll certainly experience a lot more excitement.
4. We celebrate wealth only when it’s been fairly won and wisely used [Charlie]. The goal is not to make money at all costs. It’s easy to forget that in a lot of industries and sub-cultures around the U.S. where everyone is in constant competition to keep up with the Joneses. Wealth is worthless if you’ve destroyed all your relationships to attain it. As Charlie says “take the high road. It’s far less crowded.” Sad but often true. Makes it pretty easy to stand out.
5. When you are exceptional you jump off the page. There really isn’t that much competition there [Warren]. Be your own best competitive advantage. Then it doesn’t make a difference what others are doing. You are in control.
6. Do what you’re passionate about. If you do this, there will be few people competing or running faster than you [Warren]. The best way to be exceptional is with passion! As Tony Robbins says every day of his life, “Live with Passion!” And trust me, life is a lot more fun this way.
7. I think I developed courage when I learned I could deal with hardship. You need to get your feet wet and get some failure under your belt [Charlie]. Courage does not grow on its own. Just like a muscle, it must be constantly worked out and developed. Life begins outside your comfort zone and that is where your courage is developed. Most people don’t succeed because they’re afraid to fail. Failure isn’t that bad anyway. It will make you tougher and more likely to win the next time around. No one has succeeded without going through their own failures at some point. To try and fail is much better than to never try. Why not get started early and get some of them out of the way! What’s the worst that could happen anyway? As big wave surfer Laird Hamilton says “If you’re not falling then you’re not learning.”
8. There’s no better way to be happier than getting your expectations down [Charlie]. Most unhappiness comes from misaligned and unrealistic expectations of life. Expect the world of yourself, but expect nothing of the world. Then you cannot help but live your life pleasantly surprised.
9. If I can be optimistic while I’m nearly dead, you can deal with a little inflation [Charlie]. This had the crowd laughing out loud. Life is what you make it. Don’t let things get you down. It could always be worse.
10. If the only reason you find for doing something is because others are doing it then that’s not good enough [Warren]. Enough said.
11. Bad behavior is contagious. That’s how human nature works [Warren]. Watch out for this. It can catch you off guard.
12. We’ve done a lot of stupid things but we’ve avoided a small subset of stupidity and that subset is important. It’s about avoiding the dumb things [Charlie]. They hammer this every year. Their success does not come from doing so many things right. It comes from avoiding the things that are terribly wrong. Some say this is two sides of the same coin. But it’s not. It requires a fundamental shift in psychology. The stories are endless of people who did a few things right and were massively successful, but then did something stupid that took them back to zero. Before Charlie and Warren do anything, they “invert, always invert” as Charlie says. They list every way imaginable in which they could fail at a particular task and then take massive effort to avoid those failures. Do that and the success will come automatically.
13. Go to bed a little wiser than when you woke up [Charlie]. This covers the whole meeting in a word. Life is about learning. If you are always learning you can never lose. Keep this as your only rule for the day and the world will be yours for the taking.
Go to bed a little wiser than when you woke up.
The lessons from Warren and Charlie are endless. We can all stand to learn and be better people from what they are willing to share. They don’t charge any money or ask for anything in return. Except of course that we live a life with a burning desire to learn and do all we can to be valuable additions to society. Take these lessons to heart. There will likely not be another Warren and Charlie for a very long time. Take advantage of the education while you can. Do so and I have a feeling success and fulfillment will come naturally.
Thank you Warren and Charlie. We owe you a great deal.
How have the above points improved your life? What have you learned from Warren and Charlie that you’d like to share with us? Please let us know in the comments section below.
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Jenny HonesPosted at 09:38h, 14 May
Wonderful and informative post Scott! It’s good to see the big picture in life. Life lesson 13. is very true. The other day I asked a 75 year old friend to teach cooking for a young crowd, and she corrected me, “You really don’t know old people! We like to learn too”. Yes, life is about learning.
ScottPosted at 10:56h, 15 May
Thanks for your comment Jenny. I’m so glad you found some value in it. I love lesson 13! Of all the ways to stay young, I could not imagine a better one.
Hopefully that desire to learn is what brought you here in the first place. Thanks for stopping by.
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Aaron RichmanPosted at 23:16h, 08 June
Awesome post! What great takeaways.
It’s looking like a Warren Buffet book next…
ScottPosted at 11:52h, 13 September
Thanks Aaron. There is so much to be learned from this guy. So amazing to be alive while he is.
If you’re looking for a book on Warren, it’s tough to beat The Snowball: https://liveyourlegend.net/secrets-of-the-psychology-that-truly-makes-warren-buffett-who-he-is-the-snowball
Thanks for keeping up,
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mary bradyPosted at 17:27h, 25 August
Buffet is a god. But I m more interested in you. What compels you and other young people to pour so much work into these sites that are devoted to teaching others how to be human beings? And is Tony Robbins STILL influencing people?
My God. I mean, he was in a Jack Black movie playing a parody of himself years ago.
I got here through your guest article for Zen Habits–a site I thought would be different from what it is. Nonetheless, it has led me to all these other self-help sites which mainly advise keeping possessions to a minimum and developing strategies for “GSD!” (Getting “Stuff” Done!).
These are admirable goals. Regarding possessions, I cannot tell you how often I’ve comforted the distraught by intoning: “Look–it is the nature of material objects to break.” I’ve also advised many friends that if they do just a little bit each day, their task will soon completely overwhelm them and someone better suited will take over.
I don’t spend much time comforting or advising anymore. I wonder why?
Anyway, I am intrigued by your motivation to operate this site. I’m much older than you and have definitely followed my own path through life–I’ve never married, I’ve never wanted kids, I’ve always been self-employed and I’m always learning something new: recently I taught myself trig and calculus and advanced differential equations because I want to really understand quantum mechanics. I paint, write fiction, & sing (I used to sing professionally). I’m also a CPA, but I’m disabled now.
Still, I could never imagine advising others how to live their lives or how to accomplish goals.
Why do you feel qualified to do so? This is NOT a slam. Just a query. Do you feel you’re simply a “channel,” a person passing on good advice from others? Or are you profoundly happy and want others to feel the same way?
Then again, maybe you’re 108 and look REALLY young for your age…
No matter what, anyone who digs Warren and Charlie is a-ok in my book!
L&K, Mary B
AnaPosted at 21:46h, 28 August
It doesn’t matter if he’s qualified, the fact is he’s helping me at least and probably many others. This site is exactly what Ive been looking for – the type of personal development help I’ve been seeking in books and online for the past few years and have found traces of but not enough to quite satify my craving for wisdom focused on the zen mind, simple life, Tao style lessons. I’m sure it’s probably the latter where he is genuinely happy and would like to share it with others. I know this site has picked me up from “bad days” several times already and has helped remind me that my life is what I make it based on my attitude and paradigm. Therefore, I’d like to thank you, Scott, for all your effort and passion to put this site together and keep it up for people like me. I greatly appreciate it. =]
ScottPosted at 12:04h, 13 September
You are awesome Ana. To know I’ve had this effect is surely success in my book. I ‘m so glad it’s proven helpful and I hope you continue to find value as we continue on the adventure! If there is any other way I can help. please let me know.
ScottPosted at 12:02h, 13 September
Thank you so much for a more than thoughtful comment Mary. I can’t tell you how it makes me feel to hear those thoughts. I think you’ve answered your own question. I do all of this to hear responses like that and know they are true. To do at least a small part in improving the lives of others and helping them to find their own very unique path, since we all indeed have our own. Sometimes it just takes a bit more searching.
My only qualification is that I absolutely love to learn, experience, explore, test ideas and interact with and help others. As a result I’ve experienced successes and failures and am proud and truly happy with my life and it’s nothing more than the output of all the learning and wonderful people and mentors I’ve had in my life. RFYS is a way that I give back and continue my quest for getting others on their path. My life is certainly not perfect and to be honest, a lot of the things I write about come from areas that I’m specifically working through that I’ve made a priority to learn and improve and then I have to share the results with others. I hope this helps answer your questions.
The simple answer is I want to help.
Thanks for joining me for the ride. We are just getting started!
AnaPosted at 21:38h, 28 August
I love this, it’s so right, but I have 2 questions:
1. In #2 where it says “add the most to society,” does that mean community service or does it mean what #13 is saying about learn more because knowledge is useful?
2. Don’t #7 [don’t be afraid to fail] and #12 [avoid failure at all costs] say the opposite?
ScottPosted at 12:10h, 13 September
Good points Ana. #2 really means whatever you want it to mean. Give more than you take. For some that might mean volunteering, for others that might mean building a business. Most important is to use your unique strengths and talents to make the world at least a tiny bit better.
As for your second point, in #7 it’s important to understand that failure is inevitable, especially if you are going to get out on a limb to find out what you are really meant to do on this earth. In this sense failure is great because you learn tremendously from it. #12 is referring to the fact that to the point we can learn from past failures the better. Don’t do seemingly stupid things or take outsized risks. Study the failures of others so that you don’t have to make the same ones. There’s nothing wrong with making a few original failures along the way. That’s life.
All in all failure is an incredibly valuable and fundamental part of the human experience, no doubt.
I hope this helps,
mary bradyPosted at 17:27h, 14 September
OK, this is where I get confused, Scott. Ana reads your version of what Buffet & Munger said at the annual shareholders’ meeting of Berkshire Hathaway. She asks you what THEY meant by their remarks, which have already been ‘filtered’ through you once.
You tell Ana with great assurance what Buffet and Munger mean. Are you certain that you, in fact, know exactly what these men meant? By your own admission, you, too, are “on this journey, too.”
Perhaps a better idea would be to direct readers to the Berkshire Hathaway website or to their address in Omaha. Copies of the Berkshire Hathaway shareholder meeting minutes are available, as well as the annual shareholder letter.
Readers could digest these items and decide for themselves what they mean. Their interpretations may differ from your own.
Who knows? Some might even choose to dig deeper into the subject of ‘value investing.’ It’s quite interesting–and relatively new. Buffet learned it from the originator (whose name I can’t recall at the moment).
Did you know Buffet has two “wives,” essentially? They are all quite happy with the situation. His actual wife realized they weren’t really compatible–she is an artist, I believe, and just wasn’t into taking care of Warren while he did deals 24/7.
So, she actually set him up to meet the woman he has lived with for many years now in Omaha. I think his wife lives in CA. All three of them are good friends and get along famously.
Boy. Those Midwest swingers in Omaha, Nebraska…
I’ve been a fan of Buffet & Munger for years and have enjoyed all the annual minutes and letters.
ScottPosted at 23:30h, 17 September
You have an excellent point Mary. I am indeed on this journey and am learning, experiencing and passing along what I can. A good suggestion would be to point readers toward the Berkshire website but part of what I hope to do here is to keep people from having to dig through the mountains of source material on these subjects and save our most precious resource…time.
And Buffett and Munger happen to be a topic very near and dear to me. I have been out to Omaha for the past for years of annual meetings (I actually bought my engagement ring at Warren’s jewelry shop, Borsheim’s) and over the past few years I have run a Value investment fund (www.cumbrecapital.com) modeled after Buffett’s partnerships of the 50’s and 60’s where he applied what he learned from Ben Graham. I am by no means an expert but I spend more time trying understand Buffet than I do on most topics.
His relationship with Astrid is pretty interesting. Sadly his wife Susie died a few years back. I do not believe he is as proud as he’d like to be about the way his family and marital situation played out (this was covered deeply in The Snowball), hence the reason why he says the most important thing for anyone in the world to get right is to marry the right person and to marry up!
I could go on and on about this topic as I indeed love it. If any questions come up from anyone else, please let me know.
To living legends,
mary bradyPosted at 17:18h, 20 September
Just me again, Scott. Truly, you are a Buffet expert and I now understand why you feel comfortable telling others about him. I did not know how much you emulated him, even to the point of have your own investment firm based on his and Graham’s model. I bow to your superior knowledge in these matters.
Now I have a different topic to hit you with: overpopulation. For a number of years, Buffet contributed–at the corporate level–to 501c(3) organizations that worked to limit population growth. Buffet saw the explosion in the planet’s human inhabitants as a strain on it and thus, worked to slow it down.
Shareholders began to complain, as many did not share Buffet’s view on this. You would know more about the details than I, since I never read ‘Snowball,’ but eventually, Mr. B quit making such donations at the corporate level.
And in the end, he simply gave all his money to the Gates Foundation to distribute. What a guy! Talk about humble.
But here is my query to you, Scott: do you think Mr. B had it right when he worked to minimize the world’s population? Now, he was not killing babies or anything–he was simply supporting family planning in areas where it was unavailable. For parents who were too poor to adequately feed the children they already had, such help was probably a Godsend.
In my opinion, all the strains we humans are now putting on the planet ultimately trace back to the fact that there are just far too many of us. And the population has doubled in just the last 45 years thanks to advanced medical care. (I think it took a matter of hundreds, even thousands of years, to double before that.)
Admittedly, cars spewing CO2 don’t seem like a good idea at any population level.
But the only reason clean energy “won’t work” is because it cannot provide enough energy cheaply. If there were fewer humans, we’d have a longer time to work this out–though we seem to be built only to react to a CRISIS.
So, to make a short point even longer, I always thought Warren was a visionary on this issue, too. Humans just have to cut back on reproducing. I have no children &, frankly, that’s a positive ecological contribution to Mother Earth. Big Time.
These are daring comments to make, I know. People have actually told me I am SELFISH not to have kids! How can you be selfish to something that doesn’t exist?
Another oddity: you need a license just to drive a car, but NOTHING to start cranking out babies. No proof you can support them, no quiz to see if you know how to raise them. Now, I am no fan of a Big Brother state that involves itself in a citizen’s sex life, but at some point there MUST be an incentive to curb the population.
Because overpopulation (plus dwindling resources) is where all scarcity starts…
None of these are new ideas. They’re probably ‘banal,’ to some, but they seem not to be discussed much.
Thanks for reading, Scott. You’re a thoughtful person, indeed.
ScottPosted at 10:24h, 08 October
What a comment Mary. When it comes to resources and consumption, I think that one of the very best things every one of use can do is simply stop consuming so much. We are obsessed with buying all kinds of things we don’t need and it’s going to catch up with us one of these days. It already has with the added stress it causes us. A fantastic resource on this is the book The Power of Less by Leo Babauta of Zen Habits. Awesome quick read and so powerful!
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Pam FoxPosted at 16:29h, 05 June
“When it comes to resources and consumption, I think that one of the very best things every one of use can do is simply stop consuming so much. We are obsessed with buying all kinds of things we don’t need…”
Well said Scot!! Indeed!!!! Start from every single one of us, start from today, if we really care about the planet we live, and care about the future of our generations.
For those weathy people or people who have powers, instead of trying to limit population growth especially in poor countries, why not start spending less, and stop consuming/wasting so much our precious resources for your lifestyles especially in those poor countries, people have to paid the prices for you). It would definetaly make huge difference if you start to change!!
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