What Jeff Bezos learned from Warren Buffett

What Jeff Bezos learned from Warren Buffett

By Patricia Sellers August 6, 2013: 1:42 PM ET

FORTUNE — Jeff Bezos’ decision to buy the Washington Post isn’t so surprising given that he has long seen the value of making money slowly. The Amazon.com (AMZN) founder and CEO built his $61.1 billion-a-year business by plowing short-term profits back into the business, restless investors be damned. Way back in 1999, actually, Bezos displayed an interest in old-line industries. He was at Allen & Co.’s conference in Sun Valley, Idaho when he heard Warren Buffett (BRKA) — the Washington Post Co.’s (WPO) largest outside shareholder — warn that transforming industries often fail to reward investors over time. I wrote the following in Fortune in 1999:

Bezos was so intrigued by Buffett’s talk…that he asked Buffett for his lists of the automakers and aircraft manufacturers that didn’t make it. “When new industries become phenomenons, a lot of investors bet on the wrong companies,” Bezos says. Referring to Buffett’s 70-page catalog of mostly dead car and truck makes, he adds, “I noticed that decades ago, it was de rigueur to use ‘Motors’ in the name, just as everybody uses ‘dot-com’ today. I thought, Wow, the parallel is interesting.A former hedge fund manager, Bezos is also a history buff fascinated by the Cambrian explosion about 550 million years ago, when multi-celled life spawned unprecedented variation of species — and with it, a wave of extinctions. Buffett’s analogies about bankrupt businesses “resonate deeply,” Bezos told me in 1999. That Buffett-infused paranoia has led Bezos to advise Amazon employees to stay humble. “We still have the opportunity to be a footnote in the e-commerce industry,” he said in 1999.

Fast-forward 14 years to the Amazon boss’s newest heady challenge. Bezos said in a statement yesterday: “The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition…. There is no map, and charting a path ahead will not be easy.”

So now he is betting $250 million of his personal wealth that The Washington Post will be a survivor in another transforming industry.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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