While he has always wanted to win and still does, Warren Buffett himself might not have visualised that he would end up creating the Berkshire Hathaway of today. He wrote in the 2014 annual report, “Berkshire now owns nine-and-a-half companies that would be listed on the Fortune 500 were they independent.” Last year, his partner, Charlie Munger, had mused, “How the hell does this thing end up blowing past GE?” At last count, Berkshire had a market cap of $360 billion versus GE’s $280 billion.
Though Munger explained what he thought were the reasons for Berkshire’s phenomenal success, he did also write, “Berkshire’s better outcome was so astoundingly large that I believe that Buffett would now fail to recreate it if he returned to a small base while retaining his smarts and regaining his youth.” When this was pointed out at the 50th-year annual meeting, Buffett recalled the trifecta that was unlikely to happen again. The first was Lorimer Davidson spending four hours to explain the insurance industry to him when he was a 20-year-old. The second was Jack Ringwalt selling National Indemnity to him and the final one was Ajit Jain walking into his office in 1985.
Left to Buffett, his list of master moves would only be these fortuitous three. But if one were to believe Munger, “If people weren’t so often wrong, we wouldn’t be so rich.” The fortuitous trifecta and Munger’s wisecrack aside, what they have achieved through Berkshire is the stuff of legend and the 50 master moves that you will read below is only in hindsight.
1 Choosing to stay at Omaha
The key to thinking independently is to shut out noise and not get carried away by it. Independent thinking and rationality has been central to Buffett’s success and being away from Wall Street has helped.After graduating from Columbia and being turned down by Ben Graham for a job at his investment firm Graham and Newman, he returned to Omaha to become a stockbroker. Buffett didn’t quite enjoy the brokerage business and pursued Graham, sending him stock ideas continuously till he relented. Buffett moved to New York for the love of the job in 1954, but re