Warren Buffett’s tastes haven’t changed much over the years. “I like today what I liked fifty years ago,” he told me the other day. “I like reading 10-Ks. I like playing bridge. I haven’t acquired a lot of new habits. I was happy when I was in my twenties, and I don’t see a reason to change things.” We were having lunch with Carol Loomis, one of his closest friends, who is the editor of “Tap-Dancing to Work,” a new anthology of Fortune writings by and about Buffett. As if to illustrate his point, lunch was the same lunch he’s probably been eating since he was a kid: a hamburger and fries, followed by vanilla ice cream, “strong on the chocolate syrup.” It isn’t just his tastes, though: as the new book shows, Buffett’s philosophy of investing has stayed remarkably consistent.
What has changed is Buffett’s reputation. No longer just America’s favorite investor, in recent years he’s become a kind of public sage, a role exemplified by his crusade to get the government to raise taxes on the wealthy—a crusade enthusiastically invoked by President Obama both in last January’s State of the Union address and in the recent Presidential campaign. Somehow, at a time when public hostility toward the super-rich has never been greater, he’s become not only the second-richest man in America but also one of the most revered.
Buffett’s disdain for the trappings of wealth can be exaggerated—“When I get rid of the plane, you’ll know I’m broke,” he told me—but it’s obviously a big part of his appeal to ordinary Americans. How can you not like a billionaire who still lives in a house that he bought in 1958? But Buffett’s popularity doesn’t stem from his life style alone. More important, his success evokes an economy very different from today’s risky, unstable one. These days, workers are told that they need to adapt to a world of perpetual change, constantly reinventing themselves. The investing world is dominated by a manic-depressive style, in which the average mutual fund turns over nearly its entire portfolio every year. Yet Buffett has prospered by ignoring all this. As an investor, he’s known for his patience—he says that he likes holding stocks “forever”—and he prefers a few big bets to an endless number of small ones. “If you go from flower to flower, you have to find a lot of flowers to make a lot of money,” he told me. “There aren’t that many great ideas out there.”
The way Buffett runs his company, Berkshire Hathaway, which owns more than eighty other companies outright, is similarly out of tune with the times. In the current stereotype of corporate acquirers, firms like Bain Capital load companies with debt, downsize their workforces, and strip them of assets. Buffett doesn’t do hostile acquisitions or major restructurings, and he almost never sells the companies he buys. He admits that this isn’t purely rational, although Berkshire is very profitable. But it plays to his strengths (he likes buying companies and building them) and mitigates his weaknesses (as he told me, he hates confrontation). “You’ve got to create the structures consistent with what your temperament needs to be,” he said. Whatever the personal reasons for his approach, it’s one that seems reassuring.
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