Money and sex: how Warren Buffett explains complex things to ordinary folks

“The advantage of being bisexual is that it doubles your chances for a date on Saturday night"

Warren Buffett (centre): Sharp wit. (Photo/Bloomberg).

Warren Buffett (centre): Sharp wit. (Photo/Bloomberg).

WARREN Buffett is a master at explaining complex transactions to ordinary individuals, as in his celebrated annual letters. 

Along with Buffett’s sharp wit, they display a quaint pattern of old jokes and creaky tropes. On the eve of his latest letter, due Saturday morning, here’s a sampler. 

On how “some truths can only be learned through experience”:

In Fred Schwed’s wonderful book, “Where Are the Customers’ Yachts?” a Peter Arno cartoon depicts a puzzled Adam looking at an eager Eve, while a caption says, “There are certain things that cannot be adequately explained to a virgin either by words or pictures.” (2014)

On Berkshire’s pursuit of both operating businesses and passive investments:

Woody Allen stated the general idea when he said: “The advantage of being bisexual is that it doubles your chances for a date on Saturday night.” (2013)

On buying more of winning investments: 

Mae West had it right: “Too much of a good thing can be wonderful.”’ (2012)

On finding good opportunities to deploy Berkshire’s cash hoard: 

To update Aesop, a girl in a convertible is worth five in the phone book. (2010)

On counterparty risk in derivatives contracts:

Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with. (2008)

On bad deals:

A line from Bobby Bare’s country song explains what too often happens with acquisitions: “I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.” (2007)

On the need to ignore smaller deals and focus on big acquisitions. Here, Buffett recounts the tale of a young man and an old man who lose track of their wives at the supermarket and resolve to seek them out together:

The older man asked his new companion what his wife looked like. “She’s a gorgeous blonde,” the fellow answered, “with a body that would cause a bishop to go through a stained glass window, and she’s wearing tight white shorts. How about yours?” The senior citizen wasted no words: “Forget her, we’ll look for yours.” (2006)

On his eagerness for investment ideas:

If you have a business that fits, give me a call. Like a hopeful teenage girl, I’ll be waiting by the phone. (2005)

On growth in market share (and referring to Berkshire Vice Chairman Charlie Munger): 

In apparel, Fruit of the Loom increased unit sales by 10 million dozen, or 14%, with shipments of intimate apparel for women and girls growing by 31%. Charlie, who is far more knowledgeable than I am on this subject, assures me that women are not wearing more underwear. With this expert input, I can only conclude that our market share in the women’s category must be growing rapidly. (2004)

On a director’s responsibility to oust likeable but underperforming managers:

Directors must react as did the chorus-girl bride of an 85-year-old multimillionaire when he asked whether she would love him if he lost his money. “Of course,” the young beauty replied, “I would miss you, but I would still love you.” (2002)

On insurance company reserves:

I’d say that the effects from telling a profit-challenged insurance CEO to lower reserves through discounting would be comparable to those that would ensue if a father told his 16-year-old son to have a normal sex life. Neither party needs that kind of push. (2001)

On CEOs who manipulate earnings by taking restructuring charges:

Their behaviour brings to mind Voltaire’s comment on sexual experimentation: “Once a philosopher, twice a pervert.” (1998)

-Bloomberg

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