Uncommon Sense: Warren Buffett in Milan
“I would not be able to do as well in evaluating managers if I were to select from a class of 100 MBAs,” said Buffett. “I wouldn’t have a track record that I get when we buy a business.”
The Winter Olympics kicked off in Milan, Italy, over the weekend, making this the ideal time to revisit Warren Buffett’s own visit to the city nearly two decades ago.
In May 2008, Buffett set off on a four-day, four-city jaunt through Europe in search of family-owned businesses for Berkshire Hathaway to acquire. A very abbreviated version of the grand European tours of old, which also signaled Buffett’s increasing willingness to cast his net wider (geographically) for investment opportunities.
The trip ended in Milan, where Buffett fielded questions from a group of select MBA students eager to hear his insights on investing, management, and life.
Buffett has done so many of these business school sit-downs over the years that some of the recurring topics, themes, and stories can be a bit like hearing his greatest hits for the thousandth time. So, instead of rehashing those, I’ve tried to highlight some of the other lesser-quoted gems from this Q&A session.
Track Record Matters
Berkshire Hathaway’s philosophy of extreme decentralization relies on proven performers. Exceptional men and women who have been there and done that — and are happy to keep painting their masterpieces with little oversight from above.
Warren Buffett and Charlie Munger admittedly had no interest in micromanaging the day-to-day operations of their many subsidiaries. Doing so would only pull them away from their true calling — capital allocation for the conglomerate as a whole.
As Buffett often put it, he wants .400 hitters — seasoned stars who consistently deliver elite performance — not promising rookies straight out of the minors.
Only, in Milan, he tweaked his sports analogy a bit to better suit his audience.