My attitude towards Buffett

Today I want to talk about my attitude towards Warren Buffett.

In a previous episode, I discussed the role of idols,

and your views on idols,

so I won’t repeat that here.

Regarding Buffett,

he is first and foremost a billionaire,

a motivational story of going from nothing to something,

a real story.

So has Buffett ever made mistakes? Of course he has,

just like everyone else.

When you treat an idol as a god,

you are actually bringing in something very unrealistic and subjective,

entering the realm of cognition,

which is very dangerous.

This is not your idol’s fault,

but your unrealistic expectations in cognition,

which ultimately hinder your ability to learn from your idol or those you want to learn from.

Buffett has made many mistakes,

the biggest one being investing in Berkshire Hathaway,

and carrying the responsibility for this company for decades.

Up to now,

the company’s name remains the same.

Buffett’s investment in the textile company,

lost a lot of money.

He has said himself,

if he hadn’t invested in that textile company,

his wealth now would be far greater than it is,

these mistakes did not prevent Buffett from becoming a great person and a billionaire.

So mistakes won’t make you fail, understand? Only very few mistakes will cause you to fail forever.

His investment in IBM also failed,

this is recent,

his investments in the past seven or eight years have also failed.

In the 1980s, many airlines he invested in also failed,

and he kept investing,

he even joked about himself,

if he invests in airlines again,

everyone must hold him back,

and not let him invest anymore.

But recently, he invested in the airline industry again,

he just sold it last week.

However, this time, the investment in airlines was not made by him personally.

I want to add,

it was his two heirs who invested,

he has only two heirs,

each of them made the decision to invest in the airline industry.

So what you see as Buffett investing through Berkshire Hathaway,

but it wasn’t Buffett himself making the investments.

I want to clarify,

you can see his statements on this matter.

A few years ago, he said,

when asked why he invested in this,

“Didn’t you say 30 or 40 years ago that you didn’t want to invest in airlines?” he answered this question,

he subtly mentioned that he said it two years ago,

and over a year ago as well.

He expressed his willingness to convey his intentions subtly,

because he is about to retire,

so he has to respect his heirs’ decisions.

Although there are mistakes,

that doesn’t necessarily mean they are wrong.

They actually have some logical reasoning behind investing in airlines,

and I still don’t think their last investment in airlines was a mistake.

As for exiting, that’s another matter,

exiting doesn’t necessarily mean it’s wrong,

because they might have found better investment opportunities for some funds.

Don’t look at things in isolation.

For example, Buffett also invested in the oil industry early on,

not exactly early,

it was 20 years ago that he invested in oil,

and ended up losing a lot.

He also mentioned that in his early years, he invested in the catering industry,

and retail industry,

all of which resulted in losses.

Buffett is not perfect,

but that doesn’t affect him being my idol.

So,

don’t dismiss someone because of their flaws,

otherwise you won’t learn anything.

Don’t refuse to learn methods just because they have flaws,

just like democracy,

the democratic system itself has many problems.

But does that mean a country shouldn’t adopt democracy? Of course not.

As Churchill said,

democracy is the worst form of government except for all the others,

just like value investing,

value investing is also imperfect,

but it is one of the best methods available.

Imperfections, you might point out many flaws,

but do these flaws prevent you from practicing value investing? I don’t think so.

Be practical in life,

I’m just sharing my thoughts with everyone,

my ideas may not all be correct,

but they are my genuine thoughts.

Additionally,

Buffett invested in BYD,

but in fact, BYD was not invested in by Buffett,

it was Munger who invested.

Munger trusts BYD more,

also because in Munger’s team, there is a fund manager named Li Lu from China.

He is very interested in BYD,

and knows it very thoroughly,

and has extensive connections within BYD.

Regarding how good BYD is,

I have reservations.

I don’t think BYD is a top-tier investment target,

Buffett only invested 1% of his funds in BYD,

which also suggests BYD might not be that impressive.

After all, they have been invested in for over ten years,

and his holdings haven’t changed,

which indicates Buffett is not very optimistic about BYD.

Furthermore,

I want to share my view on Buffett.

To understand Buffett,

you can read his book—“The Snowball.”

Buffett is not just a stock god,

he is a very wise person,

with deep insights into life.

My daughter met Buffett about five years ago,

she asked him some questions,

including about marriage.

So he is a very wise elder,

and very tolerant.

Think about it,

he has donated his entire lifetime wealth,

mostly to society.

He doesn’t do charity work,

he just donates his money to another person,

Bill Gates.

His good friend asked him to contribute to society,

but he knows his own abilities and rights,

knows he is not suited for charity,

and doesn’t want that reputation,

he thinks as long as the money can make a difference, it’s enough.

I deeply respect those who donate their lifelong wealth to society.

Because their wealth is earned through hard work over a lifetime.

So, when evaluating a person, don’t just look at what they say,

look at what they do.

He donated all his money to society,

I highly respect this person.

Talking is useless,

many Chinese officials criticize the US and the West on stage,

but none of them have sent their children to study in the US,

just look at what they do.

So when young people make judgments,

ignore what they say,

just look at what they do.

Buffett has been a billionaire for decades,

and it’s not just talk,

he didn’t become one by writing books,

or by me coming on video to talk about it,

he truly achieved it.

Secondly,

he donated his entire lifetime wealth to society,

and that is also something he did,

and that’s enough.

For me, other descriptions of him are superficial,

they are others’ opinions.

Just like Li Ka-shing,

whether you say Li Ka-shing is patriotic or not,

I think patriotism is a secondary concept,

don’t listen to the media about how patriotic he is,

or how unpatriotic.

What he really is towards society,

you only need to look at his donations,

to roughly understand how much wealth he still has to leave to his children,

and how much he values society and his children,

it’s not that complicated.

So,

when we Chinese look at things,

we should avoid falling into this misconception,

especially our generation or older.

I think young people have made great progress in this regard,

more healthy,

more balanced.

Black and white,

not just good or evil,

not saints or villains,

it’s not that simple, right? Anyone with a bit of common sense knows that.

For example, Confucius,

our Chinese Confucius is revered as Kong Shengren.

But in fact, we don’t really know what this person was like,

what his life was like? All we see is him as a teacher,

an old man in his fifties or sixties,

talking to his students.

What about his youth,

his childhood,

his adolescence,

how he grew up—none of that is known,

maybe deliberately erased by rulers,

or no one wants to promote it anymore.

I believe that to become a saint, one must have very special experiences,

that led him to become a saint.

He wasn’t born a saint,

he must have made many mistakes,

just like Buffett has made many mistakes in investing,

that’s what balances it out.

Unfortunately,

we often only hear the good stories of saints,

and never hear about their bad deeds,

which is not good for educating the next generation.

Promoting positive and energetic stories,

may have good intentions,

but at the same time, it makes them seem unreachable,

Buffett is different.

Look at Buffett’s autobiography,

especially the autobiography before “The Snowball,”

it includes things he did as a child,

business ventures or other activities,

many of which were not good,

including himself saying,

he once stole from a store and sold the items,

nobody knew,

but he went through these to become a good person,

which makes it more authentic,

that is my impression of Buffett.

If you want to learn investing,

just look at his annual reports,

and if possible, attend his annual meetings.

In my eyes, this person is a saint,

his status in my heart is no less than Confucius,

not just because of his enormous wealth,

wealth to him,

for a ninety-year-old,

actually has no real meaning,

wealth means nothing to any ninety-year-old.

As for life,

he is at least a very happy person,

he can dance tap dance to work every day,

how many people can do that,

happily dancing to work? And he doesn’t take himself seriously,

not many people like that.

So he has both made contributions and spoken words,

that is my idol.

I hope everyone doesn’t blindly follow idols,

don’t generalize,

and don’t be picky,

lest you lose the opportunity to learn.