Buffett Offers Advice to Harvard Students, Talks About Attacks
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By Caroline Van Hasselt
Boston, Oct. 19 (Bloomberg) -- Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., didn't give any stock tips to a standing room-only audience of Harvard Business School students last night.
The world's second-richest man behind Microsoft Corp.'s Bill Gates did offer words of advice that he says helped guide him through his life.
Buffett, 71, who spoke for about 15 minutes before taking questions, reminisced about his ``nine months and four days'' at Salomon Brothers Inc. 10 years ago when he stepped in as the brokerage's acting chairman, rescuing the firm from a Treasury bond scandal that almost caused its demise.
He said the most important hiring decision he has ever made was choosing Deryck Maughan to lead Salomon. Maughan is now a vice chairman of Citigroup Inc.
Buffett told the nation's future business leaders and entrepreneurs that he always looks for three qualities in a prospective hire: intelligence, energy and integrity.
The ``Oracle of Omaha'' spent more than an hour answering questions from the audience that overflowed the 650-seat Burden Auditorium. When asked how to assess a person's integrity, Buffett said it comes down to whether the job candidate loves the money, or the work. He said not once did Maughan ask about money, guarantees or liability insurance for the multitude of lawsuits that then faced Salomon.
`Not the Worst'
Buffett was also asked how his life had changed personally since last month's terrorist attacks, which destroyed the World Trade Center in New York and damaged the Pentagon in Washington.
``My life hasn't changed that much,'' he said.
He expressed concern that the worst hasn't yet happened, saying that he has always been deeply worried about the ``spread of nuclear knowledge'' and the possibility of terrorists getting their hands on plutonium, the essential ingredient in the making of nuclear weapons.
The terrorists have ``scarred the psyche of this country'' he said, adding that he believes the destruction of the World Trade Center was a ``demonstration.''
``That is not the worst case. If (Osama) bin Laden had plutonium and constructed a bomb, he would have done it,'' he said.
Buffett apologized for speaking bluntly, and said that while his life hasn't changed, he is worried about the lives of his children and grandchildren and what they might face in a world of nuclear proliferation.
While he said that the attacks will ``make the recession deeper than it would otherwise have been,'' he's not concerned about the U.S. economy because there are always economic cycles and ``we will adjust to all that.''
``Our economy will do wonderfully,'' he said. ``This country has adapted to all kinds of things and will continue to do so.''
Heroes
He said that apart from his father, who is his foremost hero; Benjamin Graham, the father of value investing, whom Buffett says he pestered for three years to work with before getting a job; Thomas Murphy, the former chief executive of Capital Cities/ABC Inc. and a member of the Harvard class of '49; and his wife are among his heroes.
``I was never let down by them,'' he said, telling the students they must ``select their heroes with great care.''
He related an anecdote of a friend of his, a Polish Jew who survived Auschwitz who to this day asks herself when sizing up would-be friends, ``Would they hide me?'' Buffett said that question was as good a measure as any in assessing a person's integrity.
When asked how he would invest just $1 million, Buffett said even if he had just $100,000 he would look for companies that everyone else is avoiding. He also suggested looking at public offerings that have fallen out of favor.
He said his biggest mistake was not buying Fannie Mae in the early 1980s when he understood the business inside and out. He said that decision cost Berkshire billions of dollars. He added that he has made many mistakes but never agonizes over them.
Buffett was also asked how he now spends his Saturday nights, compared to when he was in his twenties. He said when he was younger he read a lot more, once getting himself locked in a library one night because he stayed past closing time. He spends a lot of time on the Internet -- playing bridge under the handle ``T-Bone.''
``If you see T-Bone, that's me.'' |
