Warren Buffett Just Wrote His Best Annual Letter • Hacker News Board

Re: Warren Buffett Just Wrote His Best Annual Letter

#41

Post by lotsofmangos » Wed, Mar 18, 2015, 1:50 PM UTC

tootie wrote: post #39

slaxman wrote: post #19

I love Warren Buffet's quote on hiring: “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” Often we tend to focus too much on intelligence and too little on integrity. ht…

“I divide my officers into four classes as follows: The clever, the industrious, the lazy, and the stupid. Each officer always possesses two of these qualities. Those who are clever and industrious I appoint to the General Staff. Use can under certain circumstances be made of those who are stupid and lazy. The man who is clever and lazy qualifies for the highest leadership posts. He has the requisite nerves and the m…

Funny, I had read this quote attributed to Kurt von Hammerstein-Equord by Hans Magnus Enzensberger.

Re: Warren Buffett Just Wrote His Best Annual Letter

#42

Post by bostonpete » Wed, Mar 18, 2015, 1:50 PM UTC

slaxman wrote: post #19

I love Warren Buffet's quote on hiring: “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” Often we tend to focus too much on intelligence and too little on integrity. ht…

> Often we tend to focus too much on intelligence and > too little on integrity.

Maybe because integrity is virtually impossible to objectively evaluate for a candidate who you've got limited time to assess (aside from some extreme examples perhaps).

I guess you could incorporate some sort of formal integrity test [1] into your hiring process but my impression is that those are costly and controversial. Do companies actually use them...?

[1] http://en.wikipedia.org/wiki/Employment_integrity_testing

Re: Warren Buffett Just Wrote His Best Annual Letter

#43

Post by throwawaymsft » Wed, Mar 18, 2015, 1:54 PM UTC

Spooky23 wrote: post #28

cameldrv wrote: post #25

Earlier quoted context omitted.

It's all part of the image. Buffett gets a lot of miles out of the (authentic or not) aww-shucks folksy homespun image. He can do questionable deals and still not have his integrity questioned, and it's disarming in negotiations, in which, Buffett is as tough as they come.

The image is a funny mix of contrasts. In the 90s, he was living in a $100-200k home that he had lived in for 30 years and drove a pickup truck or crown Vic. But he travelled in a Gulfstream!

Yes, but he calls the jet "The Indefensible" :).

Someone of his position shouldn't be waiting in line and taking off shoes at the airport every time he needs a meeting. He owns dozens of companies.

http://www.forbes.com/sites/matthewstibbe/2011/09/22/warren-...

Re: Warren Buffett Just Wrote His Best Annual Letter

#44

Post by lotsofmangos » Wed, Mar 18, 2015, 2:05 PM UTC

kibibu wrote: post #8

pokoleo wrote: post #2

I had a chance to read the letter - I went from knowing nothing about Buffet's businesses to knowing a lot, very quickly. On a related note, I wonder if Gates writing this praise was spurred by something, maybe some news about Buffet. He's relatively senior (84), and has been running Berkshire for a while now. Maybe he's getting ready to give up the reins. In fact, he builds up the reputation his menagerie of "very e…

Love it - one of the world's richest people, and his site is built using Word

Similar to the personal websites of scientists. They are generally a tour-de-force of content over style.

Re: Warren Buffett Just Wrote His Best Annual Letter

#45

Post by xtrumanx » Wed, Mar 18, 2015, 2:19 PM UTC

slaxman wrote: post #19

I love Warren Buffet's quote on hiring: “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” Often we tend to focus too much on intelligence and too little on integrity. ht…

Sorry for the dumb question but I think I'm having a hard time parsing and understanding the quote.

> And if you don’t have the first (integrity), the other two (intelligence and energy) will kill you. If you hire somebody without integrity, you really want them to be dumb and lazy.

I don't follow the logic there at all. I think I get the gist of what he is saying (without integrity, intelligence and energy don't matter) but I don't follow how he got to that conclusion. Can you explain it better?

Re: Warren Buffett Just Wrote His Best Annual Letter

#46

Post by marcioaguiar » Wed, Mar 18, 2015, 2:25 PM UTC

xtrumanx wrote: post #45

slaxman wrote: post #19

I love Warren Buffet's quote on hiring: “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” Often we tend to focus too much on intelligence and too little on integrity. ht…

Sorry for the dumb question but I think I'm having a hard time parsing and understanding the quote. > And if you don’t have the first (integrity), the other two (intelligence and energy) will kill you. If you hire somebody without integrity, you really want them to be dumb and lazy. I don't follow the logic there at all. I think I get the gist of what he is saying (without integrity, intelligence and energy don't mat…

Someone with no integrity, can use their intelligence and energy for bad things.

Re: Warren Buffett Just Wrote His Best Annual Letter

#47

Post by throwaway5752 » Wed, Mar 18, 2015, 2:27 PM UTC

xtrumanx wrote: post #45

slaxman wrote: post #19

I love Warren Buffet's quote on hiring: “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” Often we tend to focus too much on intelligence and too little on integrity. ht…

Sorry for the dumb question but I think I'm having a hard time parsing and understanding the quote. > And if you don’t have the first (integrity), the other two (intelligence and energy) will kill you. If you hire somebody without integrity, you really want them to be dumb and lazy. I don't follow the logic there at all. I think I get the gist of what he is saying (without integrity, intelligence and energy don't mat…

He's saying that if someone does not have integrity, it's better that's they're dumb and lazy so they accomplish less and cause less harm. The tacit assumption is that someone without integrity will make decisions and act on them in ways that hurt the company.

Re: Warren Buffett Just Wrote His Best Annual Letter

#48

Post by AndrewKemendo » Wed, Mar 18, 2015, 2:29 PM UTC

bostonpete wrote: post #42

slaxman wrote: post #19

I love Warren Buffet's quote on hiring: “Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” Often we tend to focus too much on intelligence and too little on integrity. ht…

> Often we tend to focus too much on intelligence and > too little on integrity. Maybe because integrity is virtually impossible to objectively evaluate for a candidate who you've got limited time to assess (aside from some extreme examples perhaps). I guess you could incorporate some sort of formal integrity test [1] into your hiring process but my impression is that those are costly and controversial. Do companies…

Maybe because integrity is virtually impossible to objectively evaluate for a candidate who you've got limited time to assess

I would go even further and say that it's virtually impossible even over long periods. As a graduate from a military academy, the ostensible goal was graduating "Leaders of Character" with significant emphasis on "integrity" and "honor." I walked away feeling that the program did not perfect the evaluation.

At the end of the day it's usually a "gut feel" as much as I hate that, and the perceptiveness of the screener really is pivotal.

Re: Warren Buffett Just Wrote His Best Annual Letter

#49

Post by neovive » Wed, Mar 18, 2015, 2:34 PM UTC

The Acquisition Criteria on page 23 are quite interesting; definitely a stark contrast from most tech acquisitions. I especially like #5: "Simple businesses (if there’s lots of technology, we won’t understand it)" and #2 "..future projections are of no interest to us.."

Re: Warren Buffett Just Wrote His Best Annual Letter

#50

Post by AndrewKemendo » Wed, Mar 18, 2015, 2:38 PM UTC

MrBuddyCasino wrote: post #38

athenot wrote: post #35

I find the letter interesting as it contrasts so much with our Tech industry: mature vs. unproven, simple vs. complicated, sound past vs. promising future. It looks like the complete opposite of VC-influenced business. Even so, I believe there are takeaways. If we're building startups which have yet to prove themselves, it's still good to have a long term view. I'm reminded of Jack Ma's vision to build a company that…

Yes, that was indeed remarkable. The inflated valuations, the self-interest of those that get paid in those transactions - I'd love to read something as insightful as Mr. Buffet has written, only for the tech sector.

I don't think they are really comparable to be honest.

If you look at the type of businesses that BH is involved in, it's things that have "book value," in other words tangible assets that can be inventoried, depreciate and are generally considered durable goods. In "Tech" the vast majority of assets are human capital and it is too "fickle" and companies are very easily supplanted for the really long game that BH plays. Notice that the "tech" they do own is in things like IBM

Coke for example is a big asset of BH that falls slightly outside of this because the bulk of what makes Coke - Coke, is it's brand. But even still, it has a massive industrial capacity.