Lessons from Buffett

There is always something to learn from those who are the best in their fields.  I just finished reading Robert Hagstrom’s, “The Essential Buffett: Timeless Principles for the New Economy.”  It didn’t disappoint.  I walked away with a better understanding of the thinking process of one of the best investor’s of all time and found myself asking some important questions about leadership in the development field.

You see, what has made Warren Buffett exceptional (and the richest man in the world) is that he doesn’t much care about most of what other people care about.  Stock price, for example, is one of his contrarian positions.  He doesn’t much pay attention to stock price – with only one exception.  He looks at stock price only after he believes he has found an exceptional business.  If the stock price of that business is low as compared to the intrinsic value he has calculated for that business, he buys.  Very simple.  Other than that, he doesn’t much care about the stock price.

But everyone else (it seems) does care about stock price.  In fact, they care almost exclusively about stock price.  Turn on any TV finance show, or view any finance website and you see graphs of stock price trends.  Analysis of “price points” are discussed to determine when to “buy” or “get out.”  It’s all about stock price for everyone else.

So, here is the world’s greatest investor not caring about what everyone else seems to care a whole lot about.  Instead, Buffett cares about other metrics.  He cares about the economics of the underlying business.  At any given time the stock price may have no relationship to those economics.  Understanding his philosophy got me thinking.  Do we track the right measures of success in development?  Or, do we track metrics that are like “stock price” – not necessarily attached to how effectively we are operating?

I’m going to elaborate on these questions in future blogs and offer some Buffett-esque development metrics.  But, first, I encourage you to think with me about an important concept:  To become exceptional in your work and life, you must question what the crowd values and follow your own logic. Because if you value what everyone else values, you can’t become exceptional – by definition you’ll just become, well, average.



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