know what they don’t know
Berkshire Hathaway (BRK-A, BRK-B) Chief Executive Officer Warren Buffett, the world’s seventh richest person according to the Bloomberg Billionaires Index, will publish his long-awaited annual letter to shareholders on Saturday, revealing his thoughts on the state of the company and the prospects of the stock market, among other topics.
The letter may even include some of the Omaha Oracle’s signature nuggets of wisdom.
In a new interview, billionaire Thomas Tull, who runs a holding company called Tulco inspired in part by Buffett’s, described a piece of advice from Buffett that changed his approach to investment decisions. In a meeting at Buffett’s Omaha office, the legendary investor shared the lesson during a two-hour conversation, which Tull said he will “treasure for the rest of my life.” The lesson involved an approach taken by Buffett and his longtime business partner, Charlie Munger.
“There was a moment,” says Tull. “Where I was describing and speaking through the business model [of Tulco] and how I thought of something. “
“I said, ‘What we’re trying to do is be smart’ and [Buffett] He stopped me and said, ‘I have to be honest, for years Charlie and I have always asked,’ What’s the silly thing we can do here? ‘”
“I laughed a little and he said, ‘No, I’m serious. We always ask. We don’t want to be on the smart stack. What could we do here that would be the dumbest thing to do?’ Do we avoid it? ‘”Says Tull.” Honestly, it’s actually had quite an impact on the way I assess and think about situations. ”
Since 2017, Tull has led Tulco, a holding company that helps companies in various sectors improve through the deployment of artificial intelligence and other technical advances. He did not specify when the conversation with Buffett took place. For his part, Buffett has been generous in providing his investment advice over the years, advising young investors to understand accounting and know what they don’t know.
‘It’s incredibly sharp’
In recent years, Buffett has said that traditional institutions that provide expertise, such as universities and business schools, are not necessary for career success.
Buffett attended The Wharton School at the University of Pennsylvania for two years, then transferred to the University of Nebraska, where he earned a bachelor’s degree in business administration. He later received a master’s degree in economics from Columbia University.
Since 1965, Buffett has led Berkshire Hathaway, which owns more than 60 companies including Geico and Dairy Queen, as well as minority stakes in Apple (AAPL) and Coca-Cola (KO), among others. He has a net worth of $ 92.6 billion as of 5 p.m. Thursday, according to Forbes; and he has sworn to give away almost everything.
Tull expressed respect for Buffett and Munger, and said Tulco has applied aspects of the investment model developed by Berkshire Hathaway.
“I certainly would never put anything in the same paragraph with Mr. Munger and Mr. Buffett,” says Tull. “But just me, what I like about this is that it is not a fund, it is permanent capital.”
“It allows us maximum flexibility on what to do with companies to make sure they have the capital they need, certainly providing hopefully some business acumen and then the technology side, but it just allows us a lot of flexibility.”
Tull spoke with Yahoo Finance editor-in-chief Andy Serwer on an episode of “Influencers with Andy Serwer,” a series of weekly interviews with leaders in business, politics and entertainment.
Raised by a single mother in upstate New York near the Pennsylvania border, Tull became a fan of the Pittsburgh Steelers, a team he now owns. He previously served as President and CEO of the film production company Legendary Entertainment, creating blockbuster films such as “Godzilla” and “Jurassic World.”
Speaking to Yahoo Finance, Tull praised the 90-year-old Buffett’s mental acuity; and Tull said he will probably never forget his conversation with Buffett.
“It’s incredibly sharp,” says Tull. “It’s something new, which I bet I’ll treasure forever.”