Investor Nic Liberman sifts through Berkshire Hathaway letters to find what makes Warren Buffett tick
Nic Liberman analyses Warren Buffett’s letters to find what makes him tick.
Being Warren Buffett: Life Lessons from a Cheerful Billionaire.
Nic Liberman Hardie Grant $ 24.95 hb; $ 9.95 e-book
HOTEL rooms in the low key city of Ohama are already renting for more than $500 a night for next May’s Berkshire Hathaway annual meeting. And most are already booked out. Thousands make the annual trip to the normally quiet Nebraska town to listen to the words of wisdom of US billionaire Warren Buffett whose investment success has spawned its own rich field of books and commentary.
Melbourne investor Nic Liberman, a member of the well known Liberman family, has decided to weigh into the field with his own book, Being Warren Buffett. It’s a short, easy-to-read book which shies away from any technical analysis of Buffett’s investment strategies but which seeks to dissect Warren Buffett the man by reading through his annual shareholder letters. For decades, thousands of investors and would-be investors have eagerly hung on Buffett’s every word – and there have been many – but none have been able to replicate his stunning success.
Liberman seeks to analyse the personality of the 84-year-old Midwesterner through a series of personality traits. He begins with the topic of “love” and argues that underlying Buffett’s personality and his career is a long-time, deep-seated love of money. “Buffett’s consuming, life-long engagement with money seems more likely to be about love than anything else. The acquisition of money has single-mindedly held his interest for all of his life, no matter how much money he has acquired.”
It is an observation that sells Buffett short. Many top people in business and successful investors have long since earned enough to cover their daily needs. What continues to drive them is the love and the challenge of a highly sophisticated game which is judged in units called dollars. It is very different from a love of money. Anyone who has attended his shareholder meetings (I have been to three and interviewed Buffett personally once, back in 1985, when he was not so fashionable) gets a sense of a higher purpose.
A Democrat and an Obama supporter, Buffett very much wants to support and invest in well-run American businesses and educate the general public about the virtues of sensible, long-term investing and not taking wild bets on the stock market.
Get past that chapter and Liberman makes better observations of Buffett’s personality. He sees Buffett as an independent thinker who is happy in his own skin, he is loyal and values loyalty and long-term relationships (and investments). He is optimistic and patient, frugal, modest and humble. He has no (apparent) envy of others. He is not a big risk taker and espouses the need to work and invest within his sphere of competence. “He has a charismatic personality, a wonderful way with words, irresistible charm and an enormous intellect,” he says.
None of this is all that stunning in itself, but Liberman’s conclusion from his study of Buffett’s letters is a perceptive one. To be a successful investor you must first examine yourself, your own strengths and weaknesses, areas of skill and competence and tolerance and capacity for risk.
“We need to discover who we are by questioning ourselves, looking into ourselves and finding an investing style that is respectful of who we are,” Liberman says. “That is no small challenge but it is undoubtedly a worthwhile one because, if we do not understand who Buffett is and who we ourselves are, we cannot fully digest his advice. The significance of finding a place where we belong shouldn’t be underestimated.”
Warren Buffett, right, with long-time business partner Charlie Munger