Warren Buffett: A Question of Character

Photograph by Stuart Isett/Fortune

This article previously appeared in the Boston Globe

As he retires this week at age 95, it is plain that Buffett’s intelligence is matched by an even rarer trait — his wisdom.

Warren Buffett, who will retire this week at age 95, has compiled perhaps the most astounding investment and management record in financial history.

He began his career as a money manager 70 years ago, an unknown, gap-toothed 25-year-old who, after a brief apprenticeship in New York City, returned home to Omaha to raise money for his own investment fund.

Anyone who invested $10,000 when he started out in 1956 and remained in the fund until Buffett liquidated it in 1969 and transferred their investment into the company he continued to manage — a New Bedford textile manufacturer called Berkshire Hathaway — today would have an investment worth $2.9 billion. No misprint.

What is the secret of Buffett’s astounding success? As his biographer and a shareholder in Berkshire Hathaway, I believe it is his character. Wall Street is full of intelligent — and ambitious — men and women, but few have displayed Buffett’s unswerving integrity and dedication to principle. As the years go by, it is plain that Buffett’s intelligence is matched by an even rarer trait — his wisdom.

Warren apparently is in good health. Still, as he warned his shareholders in a poignant Thanksgiving letter, “Father Time is in the neighborhood.” Now is a good time to take stock.

Unlike some prominent people who are always disparaging and insulting others while complaining of supposed unfairness to themselves, Buffett cannot say often enough how fortunate he has been. “Lady Luck,” as he says, has been good to him.

Nor does he indulge in personal attacks or grievances or in those alternative American pastimes, media slurs and litigation. In his letter, he wished a Happy Thanksgiving to all: “Yes, even the jerks. It’s never too late to change.”

One might think that being a patient and understanding fellow was unrelated to his financial success; I disagree. In that same letter he referred to his home in Omaha, purchased in 1958 and the only home he ever owned.

And he referred to Charlie Munger, “my best pal for 64 years,” whom he met at a dinner party in Omaha in 1961. The two started talking and didn’t stop until Charlie passed away in 2023, at 99. Charlie, who was also his business partner, had a big impact on Warren — they had differences, he noted, “but never an argument.”

These emblems of fidelity remind me of a story: The younger Buffett frequently traveled to New York City. He always had lunch at the Stage Deli on Seventh Avenue. A friend pointed out there were many good eateries in New York — why not try someplace new? Buffett replied, “If I like the Stage, why eat somewhere else?”

The fear of missing out — responsible for a high percentage of foolish speculations — was unknown to him. This character quirk flowed from a subtle insight: People get in trouble far more often from doing and changing too much rather than doing too little.

When investment bankers touted the supposed appeal of a corporate merger (as with Warner Brothers today), Buffett said that prospective new partners inevitably bring problems visible only after the vows are exchanged. “Chair-changing” was not for Buffett; he was the ultimate long-term investor, holding stocks as well as whole companies for decades.

What he jokingly referred to as his “Rip Van Winkle” approach flowed from an insight into human character. Better to pay more attention to each investment at the outset than to rapidly discard at every turn. Indeed, he has said that if people were told at birth they could only invest in 20 stocks over the course of their lives, most would have better results.

Once he owned a company, he rarely meddled in it. The loyalty he demonstrated toward managers elicited a fanatical dedication on their part. Berkshire came to be seen as a stable home, leading many aging entrepreneurs to sell their businesses to it. Negotiations were brief and sealed with a handshake.

Buffett’s long investment horizon illustrated another essential trait: self-confidence. If you are investing for 20, 30, or 40 years, no one else can advise you. You can throw the brokerage reports out the window. You need an inner appreciation to invest now on the basis of what will be valuable when your children or grandchildren come of age.

Buffett achieved this understanding through hard, persistent work, reading the corporate financial reports that were his daily bread, and he did it by himself, without (until recently) helpers or staff.

And he had the discipline to block out the incessant market chatter and focus on an asset’s essential long-term properties. He knew himself well enough to admit what he didn’t know.

Buffett famously avoided investing in technology (until a late-in-life bonanza in Apple) because he lacked the expertise. For decades, the world’s greatest investor shunned Wall Street’s hottest industry. That took inner strength, as did his persistent refusal to risk shareholder capital on speculative fads — the latest being crypto, which, judging from its economic function, appears to be worthless.

Recognizing that he is a fiduciary for shareholders, he capped his salary at $100,000 a year. He never took a stock option — a device invented to give professional managers a stake in the enterprise, and wholly unnecessary for billionaire founders. Buffett’s character traits are not an add-on or bonus. They are the essence of the man — of his singular success and why he will be missed, on Wall Street and beyond.

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Buy Roger Lowenstein’s Buffett: The Making of An American Capitalist, here.