Of Snowballs, or 5 Lessons from Warren Buffett

Buffett is someone I’ve always been curious to learn more about. A self-made billionaire (and yet, a publicly admired/popular person), a man of simple tastes who’s communications are filled with homespun (and sometimes, self-deprecating) humor, Buffet can be an inspiration and a fascination at the same time. As a student in graduate school in 2006, I guess I was late to the party of Buffett admirers, but am glad to have joined it neverthless.

I remember buying a hard-copy of the Snowball when it was first released in 2008, but for some reason never got through beyond the 3rd chapter. It is a long, exhaustive narration of several events in the life of the legendary Warren Buffett, and his close family/friends. Perhaps more material than if you just wanted to study the positive aspects of his life, but it certainly leaves you hungry for even more if you wish to get a more holistic peek.

More recently, though, I listened to the unabridged audio version of this book.

In this piece, I’ll not review the book so much as I’d like to recall some of the ‘sticky’ lessons from Buffett. After reading the book, I read through several annual shareholder letters that Buffett wrote himself (highly recommended reading, if you haven’t already), watched his university lectures/speeches, and read through many of his interviews to news channels. Below is no comprehensive a list of the lessons, but merely a recollection of a few ideas that have stuck in my mind (blame my memory/mind for any important omissions!):

  1. Inner ScoreCard
    As paraphrased here:

    • Your inner scorecard is more important than your outer scorecard. It’s very important for people to evaluate how they behave over a lifetime morally and ethically and not be overly concerned with other people’s impressions. Keep an inner scorecard: judge yourself by your own standards. This keeps you focused when you have many people giving you advice.
  2. Best investment is investing in yourself
    Quoting from an ABC interview:

    • Generally speaking, investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you.  They can run up huge deficits and the dollar can become worth far less.  You can have all kinds of things happen.  But if you’ve got talent yourself, and you’ve maximized your talent, you’ve got a tremendous asset that can return ten-fold.
  3. Focus is the most important ingredient for lasting success. 
    When Warren Buffett first met with Bill Gates at a dinner, someone asked “What factor did people feel was the most important in getting to where they`d gotten in life” (sic), both Buffett and Gates answered: “focus”
  4. Perspective: 98th floor is way better than the 2nd!
    “If you go from the first floor to the 100th floor of a building and then go back to the 98th, you’ll feel worse than if you’ve just gone from the first to the second, you know. But you’ve got to fight that feeling, because you’re still on the 98th floor.” — Buffett

  5. On Careers: Do what you love, and get on the right train.
    “There are generally two recommendations I offer to college and business school graduates.

    1. The most important thing about where you work is that you admire/love it.
    2. Get o­n the right train; that is, moving in the right direction. There’s no course in business school called “Getting o­n the Right Train”, but it’s really important. You can be an average passenger but if you get o­n the right train it will carry you a long way. You want to learn from experience, but you want to learn from other people’s experience when you can.”
Finally, in Buffett’s own words…
“Life is like a snowball, all you need is wet snow and a really long hill.”