Kevin Carpenter

Kingswell || A little uncommon sense from Warren Buffett, Charlie Munger, and other legendary thinkers

[Kevin Carpenter @kejca]

Catch up on all of this week’s Warren Buffett and Berkshire Hathaway news!

Including the Oracle’s 96th birthday, train robberies out west, Kraft Heinz’s new partnership with Disney, and more. https://t.co/JkyRkLI9rw

[Kevin Carpenter @kejca]

Warren Buffett: "Look for the job you would take if you didn't need a job."

"I would define work as doing something when you'd rather be doing something else. When I sold shirts at Penney's and I was getting 75 cents an hour, I would rather have been doing something else. But, since I've been 24, there wasn't anything else I wanted to do [than what I'm doing now]."

"I tell students, you've got to live so you may take a job at first for somebody you don't admire — but look for somebody you admire. Look for somebody where you're looking forward to working with them that day."

[Kevin Carpenter @kejca]

Warren Buffett: "I've been involved [as a board member] with a couple situations where a proposal to buy a company has come to the board and it's been shot down.

What happens is that one person finally pipes up and it's a little bit like the kid saying, 'The emperor's wearing no clothes!' and then everybody will come on board.

But that first person to speak is belching at the dinner table. Sometimes, other people start belching [too] and, other times, they move further away from you.

There are some people who have enough bravery to be followers in a situation like that, but not to initiate it."

(CNBC || 2014)

[Kevin Carpenter @kejca]

On his birthday back in 2018, Warren Buffett weighed in on iPads and podcasts.

"I have an iPad. I use it a lot."

"I keep it around on my desk during the day. If I want to check anything in the financial markets, that's a very easy way to do it. I look up things. It's what I do with the computer at home. A computer is enormously useful to me — and the iPad is the one I have in the office."

"Podcasts, normally, they take a while to [get through]. I can read faster than I can listen to one. Generally, I don't [listen to podcasts] because of the time element."

[Kevin Carpenter @kejca]

@SMBfella I totally forgot about that one 🤣🤣🤣

[Kevin Carpenter @kejca]

Warren Buffett celebrates his 96th birthday today.

To mark the occasion, I've gathered together 96 of my favorite Buffett-isms that (hopefully) capture the breadth of his wit and wisdom.

(1) “The first rule of investment is don’t lose — and the second rule of investment is don’t forget the first rule. And that’s all the rules there are.”

(2) “If you’re going to be buyers of groceries over time, you like grocery prices to go down. We buy businesses. We buy pieces of businesses. We’re going to be much better off if we can buy those things at an attractive price than if we can’t.”

(3) “People are really strange [during market downturns]. Most [people] are savers — and that means they’ll be net buyers. They should want the stock market to go down. They should want to buy at a lower price.”

(4) “We’ve done better by avoiding dragons than by slaying them.”

(5) “I found what I liked when I was in my twenties — or earlier. I found what I liked to eat. I found what kind of people I liked to associate with. I found what I like to do during the day, how I like to dress, what I like to watch on TV, and I’ve seen no reason to change it [just] because I got richer.”

(6) “If I were to give credit in terms of how I’ve done it in investments, my dad would be number one and Ben Graham would be number two. Charlie Munger would be number three.”

(7) “I have been shaped tremendously by Charlie. Boy, if I had listened only to Ben [Graham], would I ever be a lot poorer.”

(8) “When you find a really good business run by first-class people, chances are a price that looks high isn’t high. The combination is rare enough that it’s worth a pretty good price.”

(9) “I am a better investor because I am a businessman — and a better businessman because I am an investor.”

(10) “We don’t go into companies with the thought of effecting a lot of change. That doesn’t work any better in investments than it does in marriages.”

(11) “We will never sell a business just because we get a wonderful offer for it. My house isn’t for sale. The children aren’t for sale. The businesses aren’t for sale. I tell shareholders that. That may make me crazy, but that’s who they’re getting in with — and they might as well know it [up front]. This is not a game we’re playing, like gin rummy, where we pick up one card and discard another.”

(12) “What we do is not beyond anybody else’s competence. I feel the same way about managing that I do about investing: It’s just not necessary to do extraordinary things to get extraordinary results.”

(13) “Some businesses are a lot easier to understand than others. Charlie and I don’t like difficult problems. We’d rather multiply by 3 than by pi.”

(14) “Getting fired can produce a particularly bountiful payday for a CEO. Indeed, he can ‘earn’ more in that single day, while cleaning out his desk, than an American worker earns in a lifetime of cleaning toilets. Forget the old maxim about nothing succeeding like success: Today, in the executive suite, the all-too-prevalent rule is that nothing succeeds like failure.”

(15) “Be fearful when others are greedy and greedy when others are fearful.”

(16) “If you have a temperament that when others are fearful, you’re going to get scared yourself — you are not going to make a lot of money in securities over time in all probability.”

(17) “Life tends to snap you at your weakest link. So it isn’t the strongest link you’re looking for among the individuals in the room. It isn’t even the average strength of the chain. It’s the weakest link that causes problems. It may be alcohol. It may be gambling. It may be a lot of things. It may be nothing, which is terrific. But [life] is a real weakest link problem.”

(18) “By far, the most important quality is not how much IQ you’ve got. IQ is not the scarce factor. You need a reasonable amount of intelligence, but the temperament is 90% of it.”

(19) “The best lessons are the ones you get by osmosis. If somebody preaches to you, you don’t pay much attention. If you actively watch people and you like them and you find out other people like them, you pick up on that.”

(20) “Despite our citizens’ penchant — almost enthusiasm — for self-criticism and self-doubt, I have yet to see a time when it made sense to make a long-term bet against America.”

(21) “It won’t be the American economy that does in investors over a 5- or 10- or 20-year period. It will be the investors themselves.”

(22) “I would focus on the things that have been good in your life — rather than the bad things that happen. Bad things do happen, but it can often be a wonderful life.”

(23) “I cannot have an opinion on every stock every day. The market is a psychotic, drunk, manic-depressive buying and selling 4,000 companies every day. In one year, the [average stock’s] high can be double its low. These businesses are no more volatile than a farm or an apartment building, whose values do not swing so wildly.”

(24) “For investors, as a whole, returns decrease as motion increases.”

(25) “You don’t have to do exceptional things to get exceptional results. Some people think that if you jump over a 7-foot bar, the ribbon they pin on you is going to be worth more money than if you step over a 1-foot bar. It just isn’t true in the investment world at all.”

(26) “Having the right heroes is terribly important. You tell me who a ten-year-old’s heroes are and I can give you a pretty good prediction about how they’re gonna turn out. You want to choose heroes very carefully because you’re gonna look like them at some point.”

(27) “If you’re lucky in life, make sure that a bunch of other people are lucky, too.”

(28) “If I owned all of Disney, it wouldn’t bother me one bit to write out a check for $40 million after what [Michael] Eisner has done. What bothers me is paying $2 million to some guy who hasn’t done anything.”

(29) “You’ll never pay a really top-notch executive — Roberto Goizueta at Coke, Tom Murphy and Dan Burke at Cap Cities, or Eisner — as much as they are worth. The problem is, executive compensation is too homogeneous. We’re paying the .200 hitters too close to the .350 hitters.”

(30) “If you have mediocrity and you have a bunch of friends on the board, it’s certainly not the kind of test you put a football team through. If the coach of a football team puts 11 lousy guys out on the field, he loses his job. The board never loses their job because they’ve [hired] a mediocre CEO. So you’ve got none of that self-cleansing type of operation that works with all the other jobs.”

(31) “Good managers are so scarce I can’t afford the luxury of letting them go just because they’ve added a year to their age.”

(32) “Every now and then, you’ll get an opportunity. And, when they come, they come for fifteen minutes. Some days, it’s raining gold. When it is, you’ve got to be out there. And that will happen periodically.”

(33) “When it’s raining gold, reach for a bucket — not a thimble.”

(34) “It’s usually a bad mistake to sell your interest in wonderful businesses … If you’re in a business that you understand and you think it’s a really outstanding business, the presumption should be that you just hold it and don’t worry [about it].”

(35) “There are no called strikes in the [securities] business. You can sit there and watch thousands of pitches and finally you get one right there where you want it — something that you can understand — and then you swing.”

(36) “You’ve got to be prepared — when you buy a stock — to have it go down 50% or more … If you can’t handle it psychologically, then you really shouldn’t own stocks — because you’re going to buy and sell them at the wrong time.”

(37) “There is nothing about the price action of a stock that tells you whether you should keep owning it. What tells you whether you should keep owning it is what you expect the company to do in the future.”

(38) “When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

(39) “Let’s say that I offer to buy you the car of your dreams. You can pick out any car that you want, and when you get out of class this afternoon, that car will be waiting for you at home. There’s just one catch… It’s the only car you’re ever going to get in your entire life. Now, knowing that, how are you going to treat that car? You’re probably going to read the owner’s manual four times before you drive it; you’re going to keep it in the garage, protect it at all times, change the oil twice as often as necessary. If there’s the least little bit of rust, you’re going to get that fixed immediately so it doesn’t spread — because you know it has to last you as long as you live. Here’s the thing: that’s exactly the position you are in concerning your mind and body. You have only one mind and one body for the rest of your life. Isn’t it just as important to take care of your mind and body as it is to take care of that car?”

(40) “If you’re smart, you don’t need leverage. If you’re dumb, you have no business using it.”

(41) “A climate of fear is [an investor’s] best friend. Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance.”

(42) “If we can do one intelligent thing a year, we are ecstatic. You can negotiate us down to one every two or three years without working very hard. That’s all you need. You need very few good ideas in your lifetime.”

(43) “A group of lemmings looks like a pack of individualists compared to what happens on Wall Street when it gets a concept in its teeth.”

(44) “If you can detach yourself — temperamentally — from the crowd, you’ll get very rich. You don’t have to be very bright, [either] … It doesn’t take brains. It takes temperament.”

(45) “I will say this about investing — everything you learn is cumulative. What I learned at 20 is useful to me now. What I learned at 25 is useful to me now.”

(46) “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

(47) “When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact.”

(48) “What an investor should pay today for a dollar to be received tomorrow can only be determined by first looking at the risk-free interest rate.”

(49) “I do not hire people I would not want as friends or as neighbors. I work with people who make my life easier. You can’t work with people who make your stomach grind.”

(50) “I have in life all I want right here. I love every day. I tap dance in here and work with nothing but people I like. I don’t have to work with people I don’t like.”

(51) “Gambling is a tax on ignorance. I find it kind of socially revolting when a government preys on the weaknesses of its citizenry rather than acts to serve them.”

(52) “Time is the friend of the wonderful business. You keep compounding, it keeps doing more business, and you keep making more money. Time is the enemy of the lousy business.”

(53) “Beware the investment activity that produces applause. The great moves are usually treated by yawns.”

(54) “Investing is just about assigning yourself the right story.”

(55) “Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless.”

(56) “You can’t make a good deal with a bad person. We just forget about it. We don’t try to protect ourselves by contracts or due diligence — we just forget about it. We can do fine over time dealing with people who we like and admire and trust.”

(57) “I have not put my politics in a blind trust. On the other hand, I don’t speak for Berkshire in doing that … I don’t believe in imposing my views on 370,000 employees and a million shareholders. I’m not their nanny.”

(58) “If you’re comfortable with your inner scorecard, I think you’re going to have a pretty happy life. The people who strive too much for the outer scorecard sometimes find that it’s a little hollow when they get all through.”

(59) “You can be kind — and the world is better off. I’m not sure that the world will be better off if I’m richer.”

(60) “Every year, for nineteen years, I’ve raised the price of candy on December 26. And nineteen years goes by and everyone keeps buying candy. Every ten years, I tried to raise the price of [suit] linings a fraction of a cent — and they’d throw the linings back at me.”

(61) “I can go into an emergency ward and write life insurance if you let me charge enough of a premium.”

(62) “The key to investing is not assessing how much an industry is going to affect society — or how much it will grow — but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.”

(63) “We would die — psychologically — if we lost a lot of other people’s money.”

(64) “Integrity is absolutely an option. You may not be able to throw a football 60 yards. You may not be able to run the 100 in 9.8 [seconds]. You may not be able to sink three-pointers. But you can choose where you stand on the integrity scale. That is a choice you make.”

(65) “You get a compounding of good intentions and good behavior — and, unfortunately, you can get the reverse of that in life, too.”

(66) “A friend of mine spent twenty years looking for the perfect woman. Unfortunately, when he found her, he discovered that she was looking for the perfect man.”

(67) “Our approach is very much profiting from lack of change rather than from change.”

(68) “There are always problems in the future. There are always opportunities in the future. And, in this country, the opportunities have won out over the problems over time — and I think they will continue to do so.”

(69) “Who is to say whether it’s better to defer a trip to Disneyland that [your family] will get enormous enjoyment out of, so that when you’re 75 you can have a thirty-foot boat instead of a twenty-foot boat?”

(70) “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.”

(71) “Every business school graduate should sign an unbreakable contract promising not to make more than 20 major decisions in a lifetime. In a 40-year career, you would make a decision every two years.”

(72) “Part of making good decisions in business is recognizing the poor decisions you’ve made — and why they were poor. I have made lots of mistakes and I’m going to make more mistakes. But, you know, Babe Ruth struck out a lot of times. It’s the name of the game.”

(73) “[People] buy a stock and they think if it goes up it’s wonderful and if it goes down it’s bad. We think just the opposite. When it goes down, we love it — because we’ll buy more. And, if it goes up, it kills us to buy more.”

(74) “It really isn’t so much having a lot of brilliant decisions. It’s just not really having some terrible ones … Some singles and doubles will produce a lot of runs before you get through.”

(75) “If you’re going to do dumb things because a stock goes down, you shouldn’t own a stock at all. Some people are not emotionally or psychologically fit to own stocks — but more of them would be if [they understood that] you’re really buying part of a business.”

(76) “Liquidity makes [investors] do stupid things. The fact that you can get out of [an investment] ten minutes later — which you can’t do with a farm or an apartment house — that should be your friend. But they turn it into a negative.”

(77) “If it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy. People have emotions, but you’ve got to check them at the door when you invest.”

(78) “According the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a romantic.”

(79) “We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.”

(80) “I think I stay healthy partly by being happy. It really helps if your stomach isn’t grinding all the time [because] you’re doing things you don’t want to do or you’re working with people [you don’t like].”

(81) “We’ve seen relatively little correlation between investment results and IQ. Not that there are a whole bunch of people out there with 80 IQs that are knocking the cover off the ball — but there are all kinds of people with high IQs that get no place.”

(82) “The real test of whether you’re investing from a value standpoint is whether you care whether the stock market is open tomorrow. If you’re making a good investment in a security, it shouldn’t bother you if they close down the stock market for five years.”

(83) “I think it helps to be away from lots of chatter. I don’t want to hear what a lot of other people think. I just want a lot of facts. And I want to sit there, unaffected by whether it’s sunny or cloudy outside or anything of the sort, and certainly unaffected by whether the people around me are feeling great or feeling terrible. I just want to look at the facts and see where they lead me. I don’t care what other people think at all.”

(84) “None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a [purely] contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling.”

(85) “If you have ten good ideas in the rest of your life, you can afford to give away five of ‘em.”

(86) “Buyers are most silly when they’re most happy.”

(87) “We look for three things when we hire people. We look for intelligence, initiative, and integrity. If they don’t have the latter, the first two will kill you — because if you’re going to get somebody without integrity, you want them dumb and lazy.”

(88) “If you learn reasonably well from other people, you don’t have to get any new ideas or do much on your own. You can just apply the best of what you see.”

(89) “You want to have certain people in life that you don’t want to disappoint. You want to have people who make you a better person than you otherwise would be.”

(90) “The idea of spending loads of time trying to guess how many iPhones or whatever it may be are going to be sold in a given three-month period — to me, it totally misses the point. Nobody buys a farm based on whether they think it’s going to rain next year.”

(91) “Overall, we feel extraordinarily lucky to have been dealt a hand in life that enables us to write large [tax] checks to the government rather than one requiring the government to regularly write checks to us — say, because we are disabled or unemployed.”

(92) “I just like the feeling of being trusted. You know, that’s a good way to feel in life.”

(93) “I have to see over the next mountain, if possible, but then I have to get a lot of other people to look over that mountain with me — and really do the job. They are the ones who get it accomplished. [Leadership] is getting things done through other people.”

(94) “You’re only going to live once — so you don’t want to go sleepwalking through life.”

(95) “I spent my life working on [Berkshire Hathaway]. I believe Berkshire is as permanent as you can come up with.”

(96) “You should be very forgiving of yourself — but not totally forgiving of yourself. There is no sense looking back and saying, 'If I had done this, if I had done that...' Just forget it. Nobody cares. It's history. You can't change it, [but] you can change your behavior going forward.”

[Kevin Carpenter @kejca]

Warren Buffett: "[Apple] has got to keep having the product that this huge clientele regards as indispensable.

It's got to be the best thing [for telling] when airplanes will arrive, what the weather will be, what stocks are doing, playing games, whatever it may be.

It's important that their replacement products are looked at as super desirable."

(CNBC || 2018)

[Kevin Carpenter @kejca]

Back in 2023, Warren Buffett told CNBC why he chose to invest in five of Japan's top trading companies.

"These were big companies. They were companies that I generally understood what they did. Somewhat similar to Berkshire in that they owned lots of different interests. And they were selling at what I thought was a ridiculous price. Particularly, the price compared to the interest rates prevailing at that time."

"They all welcomed us in and their results have exceeded our expectations."

[Kevin Carpenter @kejca]

Charlie Munger: "I think that if you're a really intelligent person, you have to hold your nose in reviewing either [political] party. And just exactly which one gives you the most offense can vary between intelligent people."

"Warren and I get along so well because he's not a normal Democrat and I'm not a normal Republican."

(Caltech || 2008)

[Kevin Carpenter @kejca]

Warren Buffett on happiness and being positive.

"I don't know whether you're born, to some extent, that way — but you certainly see that it works. Take the people you know. The ones who are sour at the world, the world gets sour on."

"You're going to have a better experience in life if, basically, you see the positive side of things. People will see the positive things in you at that point."

[Kevin Carpenter @kejca]

https://t.co/8NMY578IR4

[Kevin Carpenter @kejca]

Itochu president Keita Ishii sees Berkshire Hathaway’s recent bet on the housing market (acquiring Taylor Morrison, etc.) as a prime example of the conglomerate’s long-term mindset.

“Berkshire doesn’t look at things in the short term.”

[Kevin Carpenter @kejca]

Berkshire Hathaway director Chris Davis: "If we want to spend time trying to identify the emerging [AI] winners at this stage of the cycle, we have to look back with caution at the internet.

Who were the Three Horsemen of the Internet? It was Cisco, Yahoo, and AOL. If you just wanted to own the obvious winners, they were the kings of the internet.

And two of them, basically, were vaporized [and] the third is still quite a shadow of what it was."

(h/t @excessreturnpod)

[Kevin Carpenter @kejca]

Warren Buffett: "When you find information that contradicts previously cherished beliefs, you have a special obligation to look at it — and look at it quickly."

"Charlie told me that one of the things Darwin did was that whenever he found anything that contradicted some previous belief, he knew he had to write it down almost immediately because he felt the human mind was so conditioned to reject contradictory evidence that, unless he got it down in black-and-white very quickly, his mind would simply push it out of existence."

(Berkshire Hathaway AGM || 1998)

[Kevin Carpenter @kejca]

Warren Buffett: "If you start objecting to this, then this, then this, pretty soon people don't pay any attention to you. You want to save your bullets for when they really count."

(CNBC || 2014)

[Kevin Carpenter @kejca]

Warren Buffett: "Was it Keynes who said that most economists are most economical about ideas, that they make the ones they learned in graduate school last a lifetime?

You spend years getting your PhD in finance and you learn theories with a lot of mathematics in them that the average layman can't do and you become sort of a high priest. You get an enormous amount of your self and ego and even professional security invested in those ideas. And it gets very hard to back off after a given point."

(Berkshire Hathaway AGM || 1998)

[Kevin Carpenter @kejca]

Walter Schloss: "You should remember what took place [in the past] — even if you weren't around at the time ... [but] you can't run your investments as if a repeat of 1932 is around the corner. People who did missed this tremendous market."

[Kevin Carpenter @kejca]

Warren Buffett: "Being happy in what you're doing makes a huge difference [in life]. You don't want to go around having grudges against people. [If you] think negatively — whether it's about the world or about individuals or about your own bad luck — just forget it."

[Kevin Carpenter @kejca]

Warren Buffett on Apple and the iPhone.

"I'd like to see the new [iPhone] release do well, but I do not focus on the sales in the next quarter or the next year.

I focus on the hundreds and hundreds and hundreds of millions of people who practically live their lives by it.

If you look at that little piece of whatever-it-is, that is some of the most valuable real estate in the world. Fifth Avenue will never come close to that.

You've got hundreds and hundreds of millions of people with loads of buying power and able to do business or learn information or whatever it might be and it's part of their habitable living. They spend hours a day [on their iPhones] and it does all kinds of things for them.

That real estate is worth a fortune."

(CNBC || 2018)

[Kevin Carpenter @kejca]

Warren Buffett may be the most biographied businessman alive.

But one of my favorite treatments of Buffett is also one of the shortest: a single chapter from The Money Masters by John Train.

Here are some of the things I learned from a recent re-read. https://t.co/8Aq1WXEsYT