Warren Buffett And Bill Gates Explain How To Make $100 Billion...


On Friday, CNBC hosted a wonderful town hall with Bill Gates and Warren Buffett at Columbia University. 

Becky Quick moderated, and the students asked questions.

The questions included:

  • Why on earth did Warren bet the farm on a railroad?
  • What’s the market going to do?
  • What does Bill Gates think of Steve Jobs?
  • Who was Warren’s most important mentor and what did he/she teach him?
  • What did Warren NOT learn in business school?
  • What sets these two men apart?
  • If America was a stock, would they buy it?

The full transcript is here. 

Here are some highlights >

Why did you buy Burlington Northern?

What keeps you up at night?

What's the market going to do?

What did your MBA NOT prepare you for?

How big a role did luck play in your success?

GATES: Well, I was lucky in many ways. I was lucky to be born with certain skills. I was lucky to have parents that created an environment where they shared what they were working on and let me buy as many books as I wanted to. And I was lucky in terms of the timing.

The invention of the microprocessor was something profound. And it turned out only if you were kind of young and looking at that could you appreciate what it meant. And then I had been obsessed with writing software. It turned out that was the key missing thing that would allow the microprocessor to have this incredible impact.

So in timing and skill set, in some of the people I was lucky enough to meet, you know, meeting Warren and talking to him, learning from him, it is unusual to have so much luck in one life, I think. But it's been a major factor in what I have been able to do.

Source: CNBC

What do you two (Buffett and Gates) most admire about each other?

What should we do if we don't know what we want to do with our lives?

How can we find good investments?

What is the most important character for a business leader to have?

GATES: Well, it's surprising that the fundamentals of business are pretty straightforward, you know. You try to take more in income than you spend in cost. That's a pretty straightforward subtraction. But it's surprising in terms of projecting out into the years ahead that, you know, are we making the right investments, are we gaining on the competition, are we making it a little bit harder for people to replace what we're doing? That kind of common sense, I guess you've got to develop it through experience. And I think it's neat if you are young and you can see that in a small scale and be hands on with it because a lot of people who start with large businesses may have a hard time with it.

So, you know, the basics are pretty straightforward. Learning how it works and doesn't work in a variety of industries, by reading a lot, I think that's something that comes with time and a business school is an intense period where you can get ahead of the game.

BUFFETT: I send one message out every year and a half or two years. They get one letter from me every couple of years. And basically it says, run this business like it's the only business that your family can own for the next 100 years. You can't sell it. But every year don't measure it by the earnings in the quarter that year. Measure it by whether the moat around that business, what gives it competitive advantage over time has widened or narrowed. If you keep doing that for 100 years, it's going to work out very well. Then I tell them basically if the reason for doing something is everybody else is doing it, it's not good enough. If you have to use that as a reason, forget it. You don't have a good reason for doing something. Never use that.

Source: CNBC

How are you two different from everyone else? What's the secret to your success?

Who were your most important mentors and what did you learn from them?

GATES: Well, I benefited from my dad and mum who set a great example. My dad was a lawyer and shared what he was doing at work. I have had some business partners that we have learned together, Steve Balmer in particular. And then I pick Warren as somebody I have learned an immense amount from, just hearing his stories of how he dealt with tough situations, how he thought long-term, how he models the world. If you get a chance to spend time with people like that, it's fantastic.

Source: CNBC

Bill, what do you think of Steve Jobs?

GATES: Well, he's done a fantastic job. And Apple is in a bit of a different business where they make hardware and software together. But when Steve was coming back to Apple, which was actually through an acquisition of NeXT that he ran, Apple was in very tough shape. In fact, most likely, it wasn't going to survive. And he brought in a team. He brought in inspiration about great products and design that's made Apple back into being an incredible force in doing good things. And it's, you know, great to have competitors like that. We write software for Apple, Microsoft does. They compete with Apple. But he, of all the leaders in the industry that I have worked with, he showed more inspiration and he saved the company.

Source: CNBC

Warren, you've said you sometimes make huge decisions in five minutes. How?

If America was a stock, would you buy it?

Now take a tour of Bill Gates' awesome $140 million house...

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