Warren Buffett and Charlie Munger’s Advice for a Good Life: “You gotta work where you’re turned on.”

Warren Buffett and Charlie Munger’s Advice for a Good Life

By Matt Koppenheffer | More Articles | Save For Later 
May 4, 2013 | Comments (0)

“Find what turns you on.” – Warren Buffett

Get your head out of the gutter. When Buffett spoke those words at Berkshire Hathaway‘s (NYSE: BRK-A  ) (NYSE: BRK-B  ) annual meeting, he was responding to a question about what advice he’d give to himself if he could go back 50 years and give himself some advice. And with that quip, Buffett was referring to finding something that “turns you on” to do for a living. Buffett’s right-hand man Charlie Munger didn’t disagree. He piled on: “You gotta work where you’re turned on.” Not that that comment did anything to squelch the innuendo.

It’s hard to argue the importance of that if you’re trying to live a satisfied life. But this isn’t just solid life guidance, it’s also a reminder of an critical aspect of Berkshire: Just how much Buffett and Munger love what they do. There’s a reason that Fortune‘s Carol Loomis titled her most recent book about Buffett “Tap Dancing to Work.” Is it warm and fuzzy? Sure it is, but it’s also a big reason why shareholder have, over the years, seen such incredible returns from Berkshire Hathaway. Buffett and Munger love what they do and that allows them to think in terms of the long term and what will drive long-term success. During the meeting, both executives opined on how big of an advantage it is that they don’t have outside forces — read quarterly earnings pressures — weighing on them. Since it’s not about a bigger bonus or more stock options, they’re free to make tough decisions — like not writing unprofitable insurance business — rather than always putting the pedal to the metal. As shareholders look ahead to whomever will succeed Buffett and Munger, this shouldn’t be overlooked. It’ll be great to get someone in there who’s tack-smart, cool-headed, and value-oriented at heart. But over the long term, the transition will work best if the current duo is able to find somebody that simply loves the job as much as they do (or, at least, close).

Buffett and Munger dances to “Gangnam Style” + Buffett jokes in the cold and rainy Omaha weather: “If we had a company that sold coats we would have left you out there.”

Here’s What Buffett’s Saying at the Berkshire Annual Meeting

By Matt Koppenheffer | More Articles | Save For Later
May 4, 2013 | Comments (0)

Before Warren Buffett and Charlie Munger even sat down at Berkshire Hathaway‘s (NYSE:BRK-A  ) (NYSE: BRK-B  annual meeting, the annual “Berkshire video” showed a cartoon version of Buffett and Munger dancing to “Gangnam Style.” With that under your belt, it’s hard to feel that your day didn’t start off right. But that was just the warm-up for the much-awaited Q&A session with Buffett and Munger. Here is a look at some of what Buffett and Munger have been saying so far.

On first quarter earnings. Buffett noted that closures and persistentcy in GEICO policies. He called this trend “solid gold.”

On challenging Ariel Hsing in ping-pong at Borsheims. Buffett: “If you’re courageous you’ll show up with your paddle and you’ll look like an idiot.”

On trailing the market. Buffett conceded that if the market continues on the trajectory it’s on so far in 2013, Berkshire could trail the S&P 500  (SNPINDEX: ^GSPC  ) for a five-year period for the first time. Buffett said that it “won’t be a happy day, but won’t totally discourage us.” Munger chimed in with: “We’re slowing down, but it’ll still be very pleasant.”

On selling things to Berkshire shareholders. A shareholder asking a question thanked Buffett for letting everyone in early (it was cold and raining in Omaha this morning). Buffett quipped: “If we had a company that sold coats we would have left you out there.”

On selling Berkshire shares. To head off any rash moves by family members, Munger warned: “I want to say to the many Mungers in the audience, don’t be so stupid as to sell these shares.” Buffett quickly followed up with: “That goes to the Buffetts too.”

On negative implications of the H.J. Heinz  (NYSE: HNZ  )  deal. A questioner wondered whether Berkshire’s preferred position in the Heinz deal and the high price paid suggested that Buffett isn’t optimistic about the returns available in the market. Buffett responded simply that that was “totally inaccurate.” Munger later added on: “As you said, the report was totally wrong.”

On hiring executives from AIG  (NYSE: AIG  ) . Buffett pointed out that “these are people that reached out to Berkshire, in the case at least one of them had reached out numerous times in the past” and added that “we’ve had a number of people reach out since the announcement was made.” That’s a big positive for Berkshire since it’s looking to aggressively build out its commercial insurance capabilities.

The Plateau Effect: Getting from Stuck to Success

Where Were You in 1979? The final year of the 1970s witnessed epochal shifts in power that ushered in the modern world.

May 3, 2013, 2:57 p.m. ET

Where Were You in 1979?

The final year of the 1970s witnessed epochal shifts in power that ushered in the modern world.

By Jonathan Karl

The 1970s seem destined to be a justly forgotten decade—a time of disco, stagflation and little of the social upheaval that defined the previous decade or the epic global changes of the one that followed. But Christian Caryl sees more than malaise when he looks at the 1970s; he sees one of history’s great turning points. “With the passage of time,” Mr. Caryl writes in “Strange Rebels: 1979 and the Birth of the 21st Century,” “the 1970s begin to appear less like a sideshow than the main event.”

Strange Rebels

By Christian Caryl
Basic, 407 pages, $28.99

As the title of Mr. Caryl’s book suggests, his focus is 1979—a year that brought Iran’s Islamic revolution, the siege of the U.S. embassy in Tehran, the Soviet invasion of Afghanistan, and the emergence of four leaders who, he argues, changed the course of history: Margaret Thatcher, the Ayatollah Khomeini, Deng Xiaoping and Pope John Paul II.

It is hard to imagine figures as different as these or a year quite as grim as 1979, but suspend your disbelief for a moment. Mr. Caryl makes a fairly compelling case that this was a year when history made a sharp turn and that each leader set in motion the seismic changes that came to shape our world today: the fall of the Soviet Union, the rise of China and the emergence of radical Islam. In 1979, Mr. Caryl says, “the twin forces of markets and religion, discounted for so long, came back with a vengeance.”

In January of that year, China’s new paramount leader, Deng Xiaoping, made a nine-day visit to the United States. He was not technically China’s head of state (he never held that title), but President Jimmy Carter welcomed him to the White House with a state dinner. At the dinner, Deng found himself seated at a table with actress Shirley MacLaine, who had spent time in China working on a documentary extolling the virtues of Maoism during the bloody Cultural Revolution. She told Deng how wonderful it had been for her to meet a professor plowing a field on a collective farm. “Deng looked at her scornfully . . . ,” Mr. Caryl writes. “Professors, he told her, should be teaching university classes, not planting vegetables.” Read more of this post

Munger Decries Wall Street Approach at Deposit-Taking Banks; Munger said that he was “a little less optimistic about the U.S. banking system” than Buffett is

Munger Decries Wall Street Approach at Deposit-Taking Banks

Berkshire Hathaway Inc. (BRK/A) Vice Chairman Charles Munger, whose firm owns stakes in some of the biggest U.S. lenders, said Wall Street trading risks should be curbed at deposit-taking institutions. “I do not see why massive derivative books should be mixed up with” government-insured deposits, Munger, 89, said yesterday during Omaha, Nebraska-based Berkshire’s annual meeting. “The more bankers want to be like investment bankers, instead of like bankers, the worse I like it.” Munger’s comments echo those of former financial executives and lawmakers who say the largest lenders still pose risks to the economy years after reforms and U.S. bailouts. Derivatives, which are used to hedge risks or for speculation, magnify the interconnectedness of firms including JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) Critics say that these so-called too-big- to-fail companies would get taxpayer help in a future crisis.

The Berkshire vice-chairman said his views about the industry differ with those of his longtime business partner, billionaire Chairman Warren Buffett. Responding to a question at the meeting about how too-big-to-fail affected Berkshire holdings, Buffett reiterated his support of U.S. lenders. In January, he said he guaranteed that banks no longer posed a threat to the economy because capital levels were higher. “I don’t worry about the banking system being the cause of the next bubble,” Buffett, 82, said yesterday. While lenders “won’t earn as high a return as they would’ve” previously, because of regulation, they still are “decent” investments, he said.

‘Less Optimistic’

Munger said that he was “a little less optimistic about the U.S. banking system” than Buffett is. Read more of this post

IT engineer becomes Weibo sensation after giving up career to become a fruit seller

IT engineer becomes Weibo sensation after giving up career to become a fruit seller

Xu Jia was a PHP engineer for Sina Weibo in 2011 and often worked late into the night. -China Daily
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Sat, May 04, 2013
China Daily/Asia News Network

A former IT engineer has become a sensation on China’s Twitter-like Sina Weibo after he gave up a promising career to successfully turn into a fruit vendor. Xu Jia was a PHP engineer for Sina Weibo in 2011 and often worked late into the night. In 2013, he was promoted to a title equivalent to an architect in one of China’s most popular social networking sites. “I was in tears to see my promotion. It was a dream for many years finally coming true. But I changed my mind and wanted to discover the other me,” Xu wrote on Weibo. Xu quit his job to sell fruit in 2013. What surprised Weibo users most is the combination photo showing sharp differences in his looks between the two working environments. In his high-end IT job, he looked exhausted, wore glasses and had scanty hair on his head. But in the fruit store, he appears vigorous, well-dressed, and in good shape. Read more of this post

Buffett maps out hopes for Berkshire without him

Buffett maps out hopes for Berkshire without him

8:19pm EDT

By Jonathan Stempel and Jennifer Ablan

OMAHA, Nebraska (Reuters) – Warren Buffett on Saturday gave the most extensive comments to date about the future of Berkshire Hathaway Inc after he is gone, saying he still expects the conglomerate to be a partner of choice for distressed companies.

Buffett, 82, also defended his plan to install his son, Howard, who has little investing experience, as nonexecutive chairman, saying the younger man’s role would be to ensure that Berkshire had the right CEO in place.

During the financial crisis and its immediate aftermath, Berkshire helped prop up a number of companies, among them blue-chips such as General Electric and Goldman Sachs. Buffett’s investments were viewed by many shareholders as a seal of approval from one of the world’s most respected businessmen.

Short-seller Doug Kass, invited by Buffett to Berkshire’s annual meeting on Saturday to offer contrarian points of view, asked whether a successor would have the same heft. Buffett said it would not matter.

“Berkshire is the 800 number when there is really some panic in the markets, and people really need significant capital,” Buffett said. Read more of this post

The Economist: Party Like It’s 1793? China’s New President Should Scare The Crap Out Of The Rest Of The World

China’s New President Should Scare The Crap Out Of The Rest Of The World

The Economist | May 4, 2013, 9:12 AM | 14,577 | 66

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IN 1793 a British envoy, Lord Macartney, arrived at the court of the Chinese emperor, hoping to open an embassy. He brought with him a selection of gifts from his newly industrialising nation. The Qianlong emperor, whose country then accounted for about a third of global GDP, swatted him away: “Your sincere humility and obedience can clearly be seen,” he wrote to King George III, but we do not have “the slightest need for your country’s manufactures”. The British returned in the 1830s with gunboats to force trade open, and China’s attempts at reform ended in collapse, humiliation and, eventually, Maoism. China has made an extraordinary journey along the road back to greatness. Hundreds of millions have lifted themselves out of poverty, hundreds of millions more have joined the new middle class. It is on the verge of reclaiming what it sees as its rightful position in the world.

China’s global influence is expanding and within a decade its economy is expected to overtake America’s. In his first weeks in power, the new head of the ruling Communist Party, Xi Jinping, has evoked that rise with a new slogan which he is using, as belief in Marxism dies, to unite an increasingly diverse nation. He calls his new doctrine the “Chinese dream” evoking its American equivalent. Such slogans matter enormously in China (see “Xi Jinping’s vision: Chasing the Chinese dream”). News bulletins are full of his dream. Schools organise speaking competitions about it. A talent show on television is looking for “The Voice of the Chinese Dream”. Countries, like people, should dream. But what exactly is Mr Xi’s vision? It seems to include some American-style aspiration, which is welcome, but also a troubling whiff of nationalism and of repackaged authoritarianism. Read more of this post

As Best Buy’s ‘Five Star’ exits China, more foreign retailers jump in

As Best Buy’s ‘Five Star’ exits China, more foreign retailers jump in

Staff Reporter

2013-05-04

Foreign electronics retail giants such as Best Buy and Wonder City have repeatedly faced setbacks in China, but this hasn’t extinguished their enthusiasm as RadioShack approaches the mainland market, IT Times Weekly reports.

On March 18, consumer electronics retail giant Best Buy announced that Wang Jian, president of Five Star Appliance, its wholly owned subsidiary in China, will leave his post, though he will continue as a senior adviser for a smooth transition to help the new leadership until the end of June.

Wang’s departure means Best Buy’s “Five-Star era” has come to an end, as the subsidiary it bought in 2009 didn’t satisfy the parent company, insiders said. Best Buy will have to rethink its development strategy in China. Read more of this post

Steve Case: When Attackers Become Defenders, Innovation Is Lost

May 4, 2013

When Attackers Become Defenders, Innovation Is Lost

By ADAM BRYANT

This interview with Steve Case, chief executive of Revolution, an investment firm, was conducted and condensed by Adam Bryant. Mr. Case was also a founder of America Online.

Q. What were some early leadership lessons for you?

A. The earliest ones probably related to just understanding that everybody is wired a little bit differently. Just because you think a certain way or are inclined to react a certain way doesn’t mean everybody thinks and reacts the same way. I think people just naturally presume that they look at a problem in a certain way and frame the issue in a certain way and that everybody else would look at it the same way.

I learned in my 20s that there are a lot of different ways to look at things, a lot of different filters that people put on, partly based on how they analyze the circumstance but also based on their own history and perspectives and biases and instincts and so forth. You have to be open-minded about that and listen to what’s being said — but also to what’s not said sometimes. Those discussions can lead you to different places. Read more of this post

Emil Frei III, Who Put Cancer Cures in Reach, Dies at 89

May 4, 2013

Emil Frei III, Who Put Cancer Cures in Reach, Dies at 89

By MARGALIT FOX

Emil_FREI_26

Dr. Emil Frei III, an oncologist whose trailblazing use of combination chemotherapy — in which anticancer drugs are administered simultaneously rather than singly — helped make certain cancers curable for the first time, died on Tuesday at his home in Oak Park, Ill. He was 89.

His daughter Judy Frei confirmed the death.

Combination chemotherapy is now a standard treatment for a wide range of cancers, including breast, bone and testicular cancers, and has been credited with saving millions of lives worldwide. Read more of this post

To Fight Pandemics, Reward Research; An outbreak of avian flu in Asia raises questions about national preparedness for pandemics. A reward system for medical innovators would be a step in the right direction

May 4, 2013

To Fight Pandemics, Reward Research

By TYLER COWEN

THAT frightening word “pandemic” is back in the news. A strain of avian influenza has infected people in China, with a death toll of more than 25 as of late last week. The outbreak raises renewed questions about how to prepare for possible risks, should the strain become more easily communicable or should other deadly variations arise.

Our current health care policies are not optimal for dealing with pandemics. The central problem is that these policies neglect what economists call “public goods”: items and services that benefit many people and can’t easily be withheld from those who don’t pay for them directly.

Protection against communicable diseases is a core example of a public good, as is basic scientific research, which can yield new ideas that may be spread at very low additional cost. (In contrast, Medicare, which is publicly financed, has some elements of a public good, but any particular expenditure tends to benefit an individual receiving treatment, rather than being spread over a number of beneficiaries.)

One obvious step forward would be to exempt biomedical research from cuts of the current federal budget sequestration. Research and development grants are a way to pay potential innovators up front — an important move, as an innovator can’t always charge high-enough prices for the value of its remedies when they’re actually needed. Read more of this post

NYT: Malay majority are tired of the corruption and theft of public assets practiced in their name, greeted with enthusiasm the pledge to replace the corrupt ethnicity-based affirmative action program that has benefited cronies of PM Najib with a program that bases assistance on need

May 4, 2013

In Malaysia, a Historic Chance for Reform

By JOHN PANG

KUALA LUMPUR, Malaysia

MALAYSIANS are going to the polls Sunday for the most important election in our history. The opposition stands a real chance of winning, for the first time since independence from Britain in 1957. Recent polls show the People’s Alliance, the opposition coalition led by Anwar Ibrahim, running neck and neck with the governing National Front, led by Prime Minister Najib Razak. The National Front, the direct successor to the Alliance Party of the 1950s, has been one of the world’s longest-governing parties, outside of authoritarian regimes like China, North Korea and Cuba. For half a century, until 2008, it had a two-thirds parliamentary majority, which allowed it to amend Malaysia’s Constitution at will. Since the 1980s, the governing party has resorted to stoking fears among the country’s many ethnic communities — Malays, Chinese, Indians and many non-Malay indigenous peoples — to keep them beholden to its rule. It has abused affirmative action policies, intended to help impoverished ethnic Malays, in order to enrich its members and their cronies. Malaysia’s outdated model of governance — a system of racially exclusive parties that deliver patronage to captive racial voter blocs — is no longer sustainable. Read more of this post

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