In­vestor Nic Liber­man sifts through Berk­shire Hath­away let­ters to find what makes War­ren Buf­fett tick

The Australian - The Deal - - First Up - Glenda Korporaal

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

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