Warren Buffet

Who is Warren Buffet? Warren Edward Buffett was born on August 30, 1930 to his father Howard, a stockbroker-turned-Congressman. The only boy, he was the second of three children, and displayed an amazing aptitude for both money and business at a very early age. Acquaintances recount his uncanny ability to calculate columns of numbers off the top of his head - a feat Warren still amazes business colleagues with today.

What Does Warren Buffett Mean? Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire Hathaway and arguably the greatest investor of all time. His wealth fluctuates with the performance of the market but as of 2008 his net worth was estimated at $62 billion, making him the richest man in the world.

Investopedia explains Warren Buffett Buffett is a value investor. His company Berkshire Hathaway is basically a holding company for his investments. Major holdings he has had at some point include Coca-Cola, American Express and Gillette. Critics predicted an end to his success when his conservative investing style meant missing out on the dotcom bull market. Of course, he had the last laugh after the dotcom crash because, once again, Buffett's time tested strategy proved successful.

Key success factors of buffet: So what are the key success factors to integrate in post crunch times? 1. Create a decision making structure: Our findings show that there is fragmentation in the PMI process which can be overcome through a clear M&A plan. Creating a clear structure with defined roles and responsibilities is the ideal starting point. The chances of achieving a collective change management program will be more likely if it is managed from the top down. All firms will experience resource constraints so it even more crucial to have a decision making structure with clarity of governance. Note that a well defined internal structure is only as good as the accountability within it. 2. Manage Information: Have some key targets to aim towards. Since there are so many people at any one time involved with PMI, it is highly likely the information will be consistently changing and difficult to manage. By implementing a dynamic milestone driven dashboard, the PMI leader could list every deliverable and key performance indicator. Tip: Use traffic light colours to denote the status of each work stream in relation to its due date and any codependencies that could prevent integration. During PMI, a dynamic dashboard updated by the integration leader though regular feedback, will improve communication across the business. The simplest and most effective way is to quantify all deliverables for each day, week etc. This will not only improve accountability and keep the integration within budget, but will also ensure the CEO has a relevant tool to communicate with the board. The larger the deal, the more emphasis there will be placed on the CEO to obtain the results of the synergies and savings the integration is supposed to deliver and to mitigate any risk. 3. Remove the Planning Barriers Ensure your integration leader constantly communicates with the deal team early enough to start planning. This may sound easier said than done given the deal teams culture is to limit the unnecessary disclosure of confidential deal information. Our experience says that there is less leakage likely to happen with the integration team who will understand the implications of non disclosure. While it is widely thought that introducing integration specialists to the deal around the letter of intent is the acceptable time to start, it would be better if this occurred during the due diligence stage. Allowing the integration team to be involved at this stage gives them the opportunity to scope their current deliverables within their team to assess whether they have the right capability and capacity to perform the PMI to the milestones. Factoring this into the plan from all functions provides the deal team with realistic milestones which in turn provide accurate information to include in the valuation.

Reasons for Warren Buffett's Success

Trying to identify a single reason to the question, Why is Warren Buffett successful may lead to an oversimplified answer. After all, the man has a lot going for him and his success is probably owing to several factors:

1. He's smart - Buffett is frequently self-deprecating in his humor, but the reality is he's extremely intelligent. If you're familiar with his annual shareholder letters, or if you've ever listened to him being interviewed, his intelligence is obvious. He has the uncanny ability to cut through layers of complexity and succinctly get to the essence of an issue without oversimplifying and without being pithy. 2. He's in control of his emotions - Perhaps this is the most difficult personality trait to master. He frequently speaks of being greedy when others are fearful and fearful when others are greedy. Intellectually, that makes perfect, dispassionate sense. But very few of us seem capable of pulling this off when the situation is in real time rather than hypothetical or after the fact. 3. He's hard-wired for success - Without getting into a nature vs. nurture debate or a philosophical discussion regarding the role of free will, an argument can still be made that Warren Buffett's own personality is a big reason for his success. It seems from an early age he had an entrepreneurial spirit. One example is that as a teenager he purchased a used pinball machine and placed it inside a barbershop. Humble beginnings perhaps, but what we do in youth prepares us for what we do in adulthood. Doubtless there are additional factors that others might point to in response to the question, Why is Warren Buffett successful? But for me, there is one factor that I personally believe stands out above the others. And it has little to do with personality or genetics or even innate intelligence.

1. Play Baseball without Strikes You can wait for the right pitch all day and there is no penalty other than lost opportunity. So, when the fielders are asleep, step up and hit the pitch. 2. Keep Score on Your Inner Scorecard You need to keep score on your inner scorecard as opposed to your outer scorecard. In other words, measure yourself vs. your own standards and not against other people. Action Plans When I visit the competition, I wont leave without an action plan that would work for my business. I may not use it, but at least I have it for further reference. Interesting Stories Great stories are powerful and rare. When I visit the competition, I look for great stories to log into my moleskin. This has been a huge help with my writing and my presentations. 3. Be Greedy When Others Are Fearful Be fearful when others are greedy and greedy when others are fearful. In short, if you look for opportunities, you can be greedy when others are fearful.

4. Diversity Protects Ignorance You need to diversify to become successful, but it doesnt make sense and Warren Buffett agrees. He said, Diversity is protection against ignorance. It makes very little sense for those who know what theyre doing.

5. High Tide Shields the Naked Whether youre in a good market or a bad market, you need to commit to success. You need to make sure you are always doing everything in your power to stay competitive

Lets take a brief look at each of the Warren Buffet business factors in no particular order of importance, and apply them to the small business owner.

Stick to what you know and that which is within your area of experience, expand on that experience, and stay focused. Dont attempt to achieve things that require skills outside your area of expertise, as this will inevitably lead to mistakes, and mistakes in business mean unnecessary costs. Instead, work out the value of your time and buy in the services you need, leaving you more time to develop what youre good at.

Only enter into a business agreement, investment, or project where you can reasonably predict the outcome with certainty. Predictability means that the expected outcomes will be achieved. Consider risk factors to a business deal or arrangement, and make sure these factors have been fully mitigated with an action plan or back up arrangement. Best of all, steer clear of something where there are large factors beyond your control.

Maintain emotional detachment in your business dealings. Invest only with a business perspective, do not let the others or the crowd persuade or dissuade you, but rather develop yourself and your trust in yourself. Make a point of learning from your mistakes. Identify what kind of business deal you want, then determine what you are willing to pay. Small fluctuations in the price of what you need to buy can vastly affect your returns in the long run. Be prepared to wait or negotiate for the right price as this will affect what you get out of any business deal.

Work out the return on capital of your business, and try to make every business deal at least the same if not better than that return. If your business is delivering excellent returns on capital (and this is the reason why many entrepreneurs are in business in the first place) then keep as much money in your business as possible to take advantage of the money compounding success theory. Buffett has made more money than most of us added together, because the gains on his gains have been accumulating since before we were born! The returns kept in an incorporated business will avoid personal taxation unless paid to you in the form of a salary or a dividend

Use other peoples money to leverage returns. If your return on capital is greater than the cost of using other peoples money, then make sure you use their money as much as possible, not forgetting about your margin of safety. Warren has had great success with insurance companies, using this principle. 5

Only appoint or work with managers of outstanding quality. Use managers who act in the best of interest of the business and hence the owners of the business at all times.

What are the main features of the speech? Warren only invest in stuff that he understand He doesnt trade, he invests His main decision making source are Annual reports He only buys at good price He only buys things with the intention to hold them forever(no rule without exception) He holds 8% of Coca-Cola and id absolutely certain that the value of CocaCola will increase substantially over the next 20 years that is there is no reason to sell. He only invests in simple business models (beverages, sweets, chewing gums, insurances). If he does not understand the industry, he doesnt invest. For example: he doesnt invest into technology/ internet companies. He can make a purchase decision in 5-10 minutes. He doesnt overanalyze companies. He doesnt negotiate very much. When the price that is offered to him is fine, he buys immediately. When he offers a price, its often nonnegotiable and he expects very fast decisions. He recommends not listening to stock recommendations. If you do that, you are playing and not investing. He still lives in the same house he bought as a 25 years old.

And finally, while learning from your competition can be beneficial, comparing yourself to them is a waste of time. Dont worry about whos better or who earns more money. Instead, focus on what you can do to earn more money and achieve your business goals.