Sunday, December 11, 2005

We've Picked Great Managers By Only Picking Proven Winners

It would be tough to evaluate a class of MBAs and pick which ones would prove to be the best managers, just like it would be tough to pick the best golfer by watching them hit on the practice range.

We haven't tried to evaluate, before they have a record, who will be superstar managers. Instead, we find people who've batted .350 for 10-50 years. We just assume we won't screw it up by hiring them. We take people who play the game very well and allow them to play.
I recall a study that correlated business success with the age at which a manager started. It turns out that those who started young did best. Of course, if you work with what you have, you can develop over time, but a lot of it is wiring - I've come to believe more so than I did 4-5 years ago. I've never heard Charlie say anything dumb about business - except when he disagrees with me. (Laughter) And I've never heard [GEICO CEO] Tony Nicely say anything dumb about business, ever.

Munger: Part of it is intelligence, partly temperament. Rick Guerin, for example, wanted to be rich, he was smart and had the right approach [so I knew he would be very successful]. [Guerin was one of the Superinvestors of Graham and Doddsville that Buffett profiled is this speech.]

Buffett: It's interesting to think about the odds that the NCAA basketball Final Four will be cancelled [referring to his comment elsewhere that Berkshire had written a $75 million policy on the Final Four being cancelled]. Some people like thinking about this. My dad wouldn't let me be a bookie, so I went into investing.

Excerpt from "2005 Berkshire Hathaway Annual Meeting"

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