Warren Buffett was, as of Tuesday, the fifth richest guy on the planet. Owner of a fortune of US$ 116 billion. He was after four equally shiny names. Elon Musk (Tesla), Jeff Bezos (Amazon), Bernard Arnault (LVMH) and Bill Gates (Microsoft). On Saturday (26), his Berkshire Hathaway published the numbers for last year. I love seeing the results chart of large publicly traded companies. They have a lot of knowledge. Not just numbers speak. Your commanders speak. They teach business lessons. And posture. They talk about mistakes, successes. Sometimes they speak openly. They often speak between the lines. But the lessons are always there. In the case of the Buffett-led company, the 143-page document starts with all the earnings per share it has had since 1965, compared to the performance of the S&P 500 (this one with dividends included). For 57 years, Berkshire has tested positive 46 times. In the annual average, it returned 20.1%, double the 10.5% of the S&P 500. In the accumulated, it made an impressive 3,641,613% — against the very good 30,209% of the main index of the New York Stock Exchange.
Lesson 1. Trust
Buffett begins the testimonial message on behalf of himself and longtime partner, VP and Vice-Chairman of Berkshire, Charlie Munger. “We are honored by your trust,” he said. For a guy who has $116 billion it seems unfailing that he will never use anything for free. Not even words. That’s why he wrote “trust”. Nothing is allowed without it. In a relationship between people, between companies, between consumers and brands or between governments, it is the inevitable platform. Nothing will exist without trust.
Lesson 2. Taxes… Ah, taxes
He also recalled that in the mid-1960s, Berkshire collected $100 a day in tax equivalents. Today, the number hits $9 million a day. “But to be fair to our government partner, our shareholders must recognize the fact that Berkshire has prospered because it operates in the United States.” He did not mention Brazil. But I felt a stab in my tributes. Here you owe to the Revenue and to the parallel justice of the Revenue Attorney. That is why the leaders of multinationals installed in Brazil cannot justify to their headquarters how the accounting and legal departments have more people than the areas of innovation, R&D (Research & Development).
Lesson 3. Mistakes… Ah, Mistakes
It is not just anyone who in an open letter to his shareholders says: “I make a lot of mistakes”. That alone is a life lesson.
Lesson 4. Legacies
For the mega-investor, “the goal is to have significant investments in businesses with durability, economic advantages and a first-class CEO.” He adds: “Charlie and I are not stock pickers; we are business scavengers.” Between the lines of this approach is something that divides worlds: thinking about legacies, about what is lasting. This has to do with numbers, but most of all it has to do with people. That’s why Buffett insists on the phrase “first-class CEOs.” It’s the rare leaders, the ones who decide the games.
Lesson 5. The role of teaching (children)
Buffett says his most difficult audience was his grandson’s fifth-grade class. As he says, 11-year-olds were ignoring what he was saying until he mentioned Coca-Cola and its famous secret formula. “Secrets,” he said, are powerful with children. He loves to pass on what he knows. “Teaching, how to write, helped me to develop and clarify my own thoughts.” The billionaire entrepreneur tells a story credited to his life partner, Charlie Munger, who calls it the Orangutan Effect: ‘If you sit down with an orangutan and carefully explain to him one of your cherished ideas, you might leave a puzzled primate behind. , but you yourself will come out thinking more clearly’.
Lesson 6. The role of teaching (young adults)
When speaking to higher education students, he says he advises them to look for jobs in the fields they would choose if they didn’t have to think about money. “Economic realities, I recognize, can interfere with demand. Even so, I urge them never to give up the search, as when they find this type of work they will no longer be ‘working’,” he said. “Charlie and I followed this liberating path. We started out as part-time employees with boring jobs and low pay… until we got here, where we ‘work’ with people we like and trust.”
For all the teachings, thank you very much!, Uncle Buffett.
Edson Rossi is editor-in-chief of DINHEIRO.
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