What makes Warren Buffet, chairman and CEO of Berkshire Hathaway, who has mega brands such as Kraft Heinz and Geico Auto Insurance in his portfolio, one of the most envied investors? He says that he was wired for it. In fact, it is and accepted fact that he is one of the top and successful investors in the whole world. As of February 2017, his net worth is $73.9 billion. Further, he is the second wealthiest individual in the world.
Bill Gates, co-founder of Microsoft, has a net worth of $84.2 billion and is the richest individual in the world. During his stint at Microsoft, the largest software company in the world, he held various positions such as chairman, CEO and chief software architect. He was the largest individual shareholder of Microsoft until May 2014. Gates has authored as well as co-authored several books.
While speaking at an event on January 27, 2017 at Columbia University, the institution from which Buffet graduated in the year 1951, he said that he has the right temperament for investing. Fellow iconic businessman Bill Gates joined him and they participated in a question and answer session held at the University. The five key things that you can learn from the conversation are as follows:
#1: Both of them are optimistic as regards America’s future
When they were asked as to what they are most optimistic and worried about as far as Trump’s administration is concerned, both Buffett and Gates cited factors such as the rich history of innovation and progress of America. Buffet said that America will move forward and that nobody can stop it. He also said that the luckiest persons in the world are the babies being born in America these days.
Meanwhile, Gates said that innovation will be driven forward because of America’s entrepreneurial spirit and the support provided for research. He added that there will be more and more breakthroughs in the fields of health, energy, and several other areas every year that passes by.
#2: Warren Buffet on investing
Buffett said that he analyzes three crucial factors before taking a decision on investing in or acquiring a company. He added that he will look for a company that has been enjoying a competitive advantage for a considerable amount of time and is run by able and honest management team. Further, he also considers the purchase price to ensure that it is not excessive. However, he also noted that he would not hesitate to pay a little higher price for a good business instead of getting a company at a bargain price and then realizing that it does not have much of a future prospects.
According to him, the first question he asks himself when he looks at a business is “whether it is important and easy”. Many companies do not pass his stage at all, he noted. He always looks for a one-foot bar to step over and not eight-foot bars which have to be jumped over.
#3: Career advice and why it is important to take risks
In the fall of 1973, Gates enrolled for a course in Harvard, but decided to drop out a couple of years later in order to found Microsoft. He did not feel that his decision to leave Harvard and start Microsoft was a gamble. According to him, it became very clear that something dramatic would happen as the chips or integrated circuits came along and the computers started making an entry into mainstream. He also said that his passion and his hobby coincided in a nice way and that he never felt it too risky to leave the university and start a business.
On the other hand, Buffett’s advice is that people should find the job they would want to do if they did not have to work. He advised people not to sleepwalk through life and said that they should really want to do what they love. It may not be possible for people to find out what they are doing is what they really want to do in their first job itself. He cautioned that people should not give up till such time they found out as to what is it they actually want to do.
#4: How automation has changed the workplace
As there has been a reduction in the number of jobs in the manufacturing sector and there is a great deal of focus on self-driving cars among the auto and tech firms, the impact of automation on workers and workplace has not only become a contentious issue, but also a topic of serious debate.
Buffett said that he is of the firm belief that society will greatly benefit from technology aimed at making people more productive. However, job displacement is a problem that needs to be acknowledged and dealt with. He asked whether it is good or bad for the world if one person pushed a button and turned out everything that we are turning out now. However, he pointed out that people who lose their jobs for no fault of theirs should not be denied a chance to be a part of the prosperity that follows and it is the responsibility of government to step in and ensure the same.
#5: Personal relationships are very important
To a question as to how to differentiate between the relationships that people should foster and those that they should abandon throughout their life, Buffett spoke about the importance of growing close relationships with those that people admire. He added that people often move in the same direction as the people they associate with. He encouraged people to associate with those people that are much better than themselves.
Bill Gates agreed with Buffet’s view point and said that it is important to spend more time with people who bring out the best in their friends. Some friends may challenge you about the things you are doing and it is good to have that kind of intimacy. He also said that he was so obsessed with his own work and did not invest time in developing friendships when he was in his 20s and 30s as much as he should have.