The Real Warren Buffett: Managing Capital, Leading People

by James O’Loughlin (02000)

Warren Buffett has served 40 years as chairman and chief executive of Berkshire Hathaway. During that time, the company’s market value has grown from $600 million to $109 billion — a compoud growth rate of 25% per yar. (If Berkshire were to continue that rate of growth for the next 34 years, it would absorb the entire U.S. economy). Today, Berkshire generates annual revenues of $30 billion and employs 112,000 people.

So what is it Warren Buffett is doing differently (and better) than everyone else? This is more than being a good stock picker and investor. Instead, Warren Buffett acts like a CEO who owns the company. He has developed a framework which allows him to do three specific tasks exceptionally well:

Act like the owner of the entire business:
1. Lead and motivate able people
2. Allocate capital intelligently
3. Stay within your Circle of Competence

The challenge, therefore, in emulating the accomplishments of Warren Buffett and Berkshire Hathaway is not to become better at assembling a stock portfolio but to become a better CEO.

The Real Warren Buffett