Buffett at Tuck School (2004-2005)

Author: Tuck School of Business Students Published: 2004-2005 Source: ThinkFn

Overview

Second-year MBA students from Dartmouth's Tuck School of Business made annual pilgrimages to Omaha for Q&A sessions with Warren Buffett. These visits included tours of Berkshire subsidiaries and lunch at Gorat's Steakhouse.

Key Quotes

On Career Advice

"If you want to make a lot of money go to Wall Street. More importantly though, do what you would do for free, having passion for what you do is the most important thing."

On Integrity

"You don't want to wait forever to find the perfect team... I only buy companies where the seller cares about where the business goes."

On Concentration

"When making investments, pretend in life you have a punch-card with only 20 boxes, and every time you make an investment you punch a slot. It will discipline you to only make investments you have extreme confidence in."

On capitalism

"The real challenge with capitalism is that you can't throw sand in the gears of greater output but you also want to care for the casualties."

Themes

The Ovarian Lottery

Buffett repeatedly emphasized the importance of being born in the United States:

"The odds for me to have been born in the US were 1 in 50. I won the ovarian lottery."

Passion and Success

He stressed passion as the key indicator for career and investment decisions:

Ms. B from Nebraska Furniture Mart had passion — that was her competitive advantage
He works with 17 people, not hundreds — environment matters
Don't "save sex for old age" by delaying what you really want to do

Looking Through the Windshield

"Investors are always looking for the holy grail, the next great idea... Right now it's 'alternative investments.' There's so much money chasing these ideas now that the returns in the future will probably not be as good."

Berkshire Subsidiary Visits

Nebraska Furniture Mart

Bob Batt (EVP) led the tour, sharing operational insights:

"Sell cheap and tell the truth" — Mrs. B's founding principle
Target customers are women — they make purchasing decisions
No consignment, all inventory owned — "cash is king"
61 years without firing an employee

Borsheim's

Susan Jacques (President & CEO) explained Buffett's acquisition criteria:

Businesses that are low-cost producers
Stable or growing demand into perpetuity

The Punch Card Metaphor

Buffett's famous thought experiment on concentration:

You have only 20 investment decisions in a lifetime
Each decision uses one slot on your punch card
This forces extreme selectivity and high confidence before acting

Related Concepts

Source

Tuck School of Business, Dartmouth College, 2004-2005.