Founders
Episode 227 #227 The Essays of Warren Buffett
Founders

Episode 227: #227 The Essays of Warren Buffett

Founders

Episode 227

#227 The Essays of Warren Buffett

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading The Essays of Warren Buffett by Warren Buffett and Lawrence Cunningham.

What I learned from reading The Essays of Warren Buffett by Warren Buffett and Lawrence Cunningham.

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[1:39] Founders #88 Warren Buffett’s shareholder letters — All of them!

[2:36] Buffet and Charlie Munger built this sprawling enterprise by investing in businesses with excellent economic characteristics and run by outstanding managers.

[5:21] Founders #224  Charles de Gaulle by Julian Jackson

[5:41] Books on Henry Singleton: The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success and Distant Force A Memoir of the Teledyne Corporation and the Man Who Created It

[7:06] Founders #226 Heroes: From Alexander the Great and Julius Caesar to Churchill and de Gaulle by Paul Johnson

[8:03] Founders #34 Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration by Ed Catmull

[9:19] Give a good idea to a mediocre team, and they will screw it up. Give a mediocre idea to a great team, and they will either fix it or come up with something better.

[9:58] Founders #208 In The Company of Giants: Candid Conversations With the Visionaries of the Digital World

[11:11] Run your business as if:

You own 100% of it

It's the only asset that you hold

You can’t sell it for 50 years

[14:04] Buffett’s essays are sprinkled with historical reference points, especially economic history. He reflects the importance of understanding the past to handle the present and navigate the future.

[16:04] A main theme of Buffett: Identify good ideas and then concentrate your resources around them.

[16:54] Buffett’ Shareholder Letters on Kindle

[23:44] Founders #104 Leading By Design: The IKEA Story 

[24:53] Founders #93 and Founders #222 A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market

[27:19] Businesses seldom operate in a tranquil, no surprise environment and earnings simply don't advance smoothly.

[29:28] Founders #143 Tuxedo Park: A Wall Street Tycoon and the Secret Palace of Science That Changed the Course of World War II Loomis had one important characteristic. His ability to concentrate completely on a chief objective, even at the cost of neglecting matters that appear to other people to be of equal importance.

[31:19] The competitive position of each of our business grows either weaker or stronger each day. If we are delighting customers, eliminating unnecessary costs, and improving our products and services, we gained strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither on a daily basis.

[33:45] Founders #50 Marc Andreessen’s Blog Archive 

[36:07] Business is like nature. It doesn't care if you arrive at the right answer from the wrong reasoning.

[42:23] Games are won by players who focus on the playing field, not by those whose eyes are glued to the scoreboard.

[47:16] Some part of your business philosophy will not be financial and that's the way it's supposed to be.

[50:39] Founders #155 Invent and Wander: The Collected Writings of Jeff Bezos 

[58:15] “My whole life has been spent trying to teach people that intense concentration for hour after hour can bring out in people resources they didn’t know they had.” —Edwin Land

[1:01:50] Even smart chickens shit on their own feathers.

[1:02:16] Loss of focus is what worries Charlie and me the most.

[1:04:08] Helpful cheat sheet to use when reading Warren’s shareholder letters

[1:06:30] I learned to go into business only with people whom I like, trust, and admire. We have never succeeded in making a good deal with a bad person.

[1:10:33] By being so cautious in respect to leverage and having loads of liquidity, we will be equipped both financially and emotionally to play offense while others scramble for survival.

[1:18:38] Bull markets can obscure mathematical laws, but they cannot repeal them.

[1:19:14] The 3 part series on Andrew Carnegie and Henry Clay Frick Founders #73, 74, and 75 Book links: The Autobiography of Andrew Carnegie, Henry Clay Frick:The Life of the Perfect Capitalist, and Meet You In Hell: Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership That Changed America

[1:19:44] Cut the prices, scoop them market, watch the costs and the profits will take care of themselves.

[1:21:00] Founders #96 James J. Hill: Empire Builder of The Northwest 

[1:24:09] One of Larry Ellison’s favorite maxims was, “The brain’s primary purpose is deception, and the primary person to be deceived is the owner.” Book: The Billionaire and the Mechanic: How Larry Ellison and a Car Mechanic Teamed up to Win Sailing's Greatest Race, the Americas Cup, Twice

[1:24:55] There's two ideas that saves us time and effort: 1. If it's not worth doing, it's not worth doing well. 2. If it is worth doing, do it to excess.

[1:28:09] An absolute masterclass on how to differentiate your product. Scroll all the way down. It’s appendix B.

[1:50:33] If horses had controlled investment decisions, there would have been no auto industry.

[1:52:28] If you can't predict what tomorrow will bring, you must be prepared for whatever it does.

[1:54:24] Advice from Charlie Munger: You should reserve much time for quiet reading and thinking.

[1:54:46] Buffett's decision to limit his activities to a few kinds, and to maximize his attention to them, and to keep doing so for 50 years was a Lollapalooza.

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#227 The Essays of Warren Buffett

Introduction

The original edition of The Essays of Warren Buffett was the centerpiece of a 1996 symposium that I organized. This gathering brought together hundreds of students for a 2-day dissection of all of the ideas in the letters, featuring a series of vibrant debates among some 30 distinguished scholars, investors and managers, with Warren Buffett and Charlie Munger participating throughout from their seats in the front row.

In the decade since its initial publication, I have often taught this book in my classes and at seminars at 4 different universities. The book is adopted by scores of professors at other schools for classes, such as investment, finance and accounting. Investment firms have distributed copies to their professional employees and clients as part of training programs.

All the letters are woven together into a fabric that reads as a complete and coherent narrative of a sound business and investment philosophy. Experienced readers of Warren Buffett's letters to the shareholders of Berkshire Hathaway have gained an enormously valuable informal education. The letters distill, in plain words, all the basic principles of sound business practices. The writings are broad in scope and long on wisdom.

And that is an excerpt from the book that I'm going to talk to you about today, which is, The Essays of Warren Buffett: Lessons for Corporate America. And it was put together by Lawrence Cunningham. And this is another recommendation that came from a listener. If you have more book recommendations you'd like to see me cover on a podcast, please send them to me. The best way or probably the easiest way to do that is just e-mail me, david@founderspodcast.com.

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