Warren Buffett is an enigma. That’s despite so much having been written about him, and his own crisp and humorous articulation of insightful quotes and interviews.
Buffett has donned various avatars since he started out in the investing world, making many suitable transitions along the way.
He has been blessed with a very sharp mind and memory, but to his credit, he has managed to understand the human psyche, including his own, better than most people. He has taken decisions that sometimes appeared outrageous, made large high-conviction bets, chosen the right businesses with sustainable competitive advantages by paying a price lower than the underlying value of the business, entrusted them with competent and well-incentivised managers, and demonstrated humongous patience. Most importantly, he has gotten very rich with a truly long-term horizon, unlike a lot of Wall Street bankers with unscrupulous compensation structures.
Despite everyone knowing what Buffett has done in the past six decades, why is there only one Warren Buffett? So much so that his long time friend, business partner and a man he highly respects, Charlie Munger (who also probably has all the traits above), has also not even a fraction of Buffett’s wealth. I have asked this question to myself and innumerable fans and followers of Buffett, and I don’t have any substantial answers yet and that’s the reason I call him an enigma.
He started out accumulating Ben Graham’s prescribed cigar-butts, participated in arbitrages, then tweaked his model to incorporate the value of intangibles, started allocating large parts of his portfolio into companies he truly understood rather well, raised stakes in such companies until he had stakes as large as a business owner, and then over time diversified into a gamut of businesses.
Let’s start with the key themes encapsulating his philosophy. Very simply, he likes capital efficient, scalable businesses with pricing power run by credible and competent management with interests aligned. The various industries across which his empire spans today broadly include FMCG, utilities, home builders/suppliers, media and BFSI. He has a few other relatively smaller businesses in certain other industries. All these domains were bought into at different time over the pas