Warren Buffet

Warren Buffett? an entrepreneur??? He's no entrepreneur you say?? He's an investor and financier!

It is true that Buffet is known as one of the greatest investors. Yet take a closer at youth attributes, instinct and activities. You may agree at the end of this tribute, he is indeed an entrepreneur! Of course, that depends of the long standing question - "What is an entrepreneur?" but we'll leave that for you to decide.

Multi-billionaire, Warren Buffett, does not hide the fact that his goal is to amass wealth, in fact, it's his mission. However, his skills are the reason that investors back him and the holding company he manages, Berkshire Hathaway.

Look closely at the information in books and in Berkshire Hathaway's annual reports, and you will find a very honorable man who invests long term in concepts, products, services, industries, and people (managers who run great companies). He grows to understand his investments through study and intense research. When you read an annual report he does not "sugar coat" the positives and negatives. In fact, he has made many errors and will tell you about them. The holding company, Berkshire Hathaway was a failed textile company purchase that Buffett believed he could turnaround. But, the market forces of foreign competition versus capital investment requirements in the business were simply too great and the company ceased operations (as a textile company, of course).

Quotes
"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."
"I don't try to jump over seven-foot bars. I look around for one-foot bars that I can step over."
"If at first you succeed, quit trying."
Quotes excerpted from Warren Buffett Speaks by Janet Lowe. Published by John Wiley & Sons, Inc.

Key thoughts for entrepreneurs
The purpose of the tribute is not to lecture on the investment strategy necessary to amass wealth. Warren Buffett is a man with a very high level of integrity and an objective demeanor that allowed a vast number of investors, employees, and the economy to prosper. He invests in a great variety of businesses from insurance to candy stores to newspapers to Coca-Cola (TM) and so on. Buffet bets on people. He does not like to supply management himself but will often bet on only those companies that have a high level of talented human capital.
Entrepreneurs seek market niches. Buffett seeks niches within company's within the market that have investment potential. Don't believe however, that Buffett is merely buying stocks. One of his early phenomenal successes in the late 1960's was the purchase of National Indemnity Company and National Fire and Marine Insurance Company (both of Omaha, Nebraska).

While commodities such as insurance were difficult (and still are today) to distinguish in the market, he grew these companies while others failed (today the Berkshire Hathaway insurance company investment portfolio is second only to State Farm Insurance).

He invested wisely the proceeds from the companies during profitable years such that during price cutting by others to retain market share, he simply held constant the premium charges on insurance. They sold customers on the financial strength of his companies. They also wrote policies on the basis of profitability rather than volume.

The result of competitors offering a policy at less than cost to retain market share was a revenue versus cost structure that put many out of business and others to weaken their liquidity reserves and investment portfolio's. Customers who had in turn opted for lower premium prices offered by many failed companies would then return. This was clearly a long-term strategy based upon a strong understanding of the industry, profit model, planning, patience, and business acumen.
What do you think? Is Warren Buffet entrepreneurial? - he invests his own money, bucks trends, and identifies market niche opportunities......

Books on Warren Buffett:
Warren Buffett Speaks by Janet Lowe
The Warren Buffett Way by Roger G. Hagstrom, Jr.
Buffett: The Making of an American Capitalist by Roger Lowenstein

 

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