Warren Buffett is the world’s most respected investor.

That he is an investing genius is not in doubt. A $1,000 investment in his investment vehicle, Berkshire Hathaway, in 1965 would be worth over $15,000,000 now. Had that $1,000 been invested in the same year in a fund whose value was linked to the value of the S&P 500 (a major index comprising of 500 “blue chip” American stocks), it would be worth less than $200,000 today. The difference is clear.

Buffett isn’t a guy who sits at a terminal trading stocks, as Bill Gates famously thought before meeting him (Buffett eventually became a mentor to Gates). He’s a long-term investor and a deep thinker about business in general, and makes his investments based on a thorough understanding of the long-term prospects of the business, the industry, and the management team.

Given that he knows a thing or two about business, and since he’s been in the game for a zillion years, it is natural to wonder what entrepreneurs may be able to learn from him.

To my wonderment, I couldn’t readily find a well-organised summary of his investment philosophy, which one could then quickly translate into “entrepreneurese.” The Internet is full of articles on Buffett, but the vast majority are a grab bag of aphorisms or randomly compiled “lessons” which fail to identify truly overarching themes.

To generate “Buffett for the Startup/Entrepreneur” it became necessary to actually do some real work — re-read old books, online research, etc — and compile a few quotes from Buffett, his partner Charlie Munger, and his mentor Ben Graham to illustrate each point.

In summary, I believe Buffett’s investment philosophy, translated into advise for entrepreneurs, can be boiled down to six lessons I will explain the in the next few weeks:

  • Knowledge is King
  • The Market is Queen
  • Life Is Too Short
  • Less Is More
  • Know The Ledge
  • Know Your Friends

 


Editor’s Note: This post first appeared on Wole Lawani’s Medium page.

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