Emulate, Evolve & A View of Eternity
An important lesson I learned in life is what I call “emulate and evolve.” If you want to succeed in a particular field, the first thing to do is to seek out the person that has come before you, who has succeeded more than anyone else, and emulate them. Once you have made those principles or activities a habit, then evolve those so they remain relevant to a changing world.
If your goal is to be a great operator of a business or an exceptional investor, there is no other person you should look to emulate than Warren Buffett. Larry Cunningham’s Essays of Warren Buffett does a masterful job at providing a logical architecture to introduce, or reintroduce, the important lessons that Warren Buffett has shared over the last half century.
Warren Buffett followed a path of emulate and evolve. At the age of nineteen, Buffett read a copy of Benjamin Graham’s Intelligent Investorfrom the Omaha Public Library, and, almost in an instant, he was indoctrinated into thinking as a value investor. With a goal of committing Graham’s principles to habit, Buffett applied to Columbia Business School to study with Graham.
In The Essays of Warren Buffett: Lessons of Corporate America, the reader is taken on a journey of how Buffett emulated Graham’s value principles, such as Mr. Market and Margin of Safety, and applied those key insights to the rationality of his decision-making process. The reader is also able to witness the progression of Buffett’s thinking as it evolved over the decades from looking at Graham’s “net-nets” toward looking at businesses where intrinsic value would compound through time.
I found the organization and compilation of the “Essays” so helpful in communicating the evolution of value investing from Graham to Buffett that I have added this book to the reading list for the Security Analysis class I teach at Columbia Business School.
I recently heard a story told by Marshall Weinberg (one of Warren Buffett’s Security Analysis classmates at Columbia in 1951) that Ben Graham would open his course by writing a Latin phrase on the chalkboard: sub specie aeternitatis. The phrase is from philosopher Baruch Spinoza, and translates to: in view of eternity. The “Essays” do an exceptional job of not only sharing the evolution of the businesses Buffett was interested in buying, but we are also able to see how his perspective evolves as his time horizon lengthens. His long-term compounding view evolved to that of eternity as the Berkshire Hathaway system emerged to the one we know today. The system that exists today is grounded in not only the timeless value investing lessons Graham articulated, but is coupled with a perspective toward eternity.
The Berkshire system, through the evolution of Buffett’s life-long journey of learning, begins to view everything in the context of not just a long-term view but an eternal view. They are privy to family owners who are unwilling to sell their businesses to many but see Berkshire as a home that will preserve the integrity with which the business was built. Buffett views his fellow shareholders as partners that should be treated fairly. He drives this point home in his reluctance to not buy back shares without partners knowing what they are giving up. We also see this in the way shareholders view their role as true owners of the Berkshire and its underlying businesses.
“Essays” has become an effective reference book when I find myself asking in what year did I remember Buffett making a particular point. The table of contents has become a well-worn, dog-eared page where I can navigate many of the more poignant lessons Buffett has distilled. I look forward to sharing this with my students this semester.
Christopher Begg is CEO, CIO and Co-Founder of East Coast Asset Management, bringing 15 years of investment experience from previous posts as Portfolio Manager at Moody Aldrich Partners and Boston Research and Management. Chris is currently an Adjunct Professor at the Heilbrunn Center of Graham and Dodd Investing at Columbia University Business School, where he teaches Security Analysis, the course taught by legendary value investor and Buffett mentor, Benjamin Graham.