Three Things I’ve Learned From Warren Buffett : Bill Gates

I am looking forward to sharing posts from time to time about things I’ve learned in my career at Microsoft and the Gates Foundation.

Last month, I went to Omaha for the annual meeting of Berkshire Hathaway shareholders. It’s always a lot of fun, and not just because of the ping-pong matches and the match throwing the newspaper did with Warren Buffett. It’s also fun because I get to learn from Warren and understand how he thinks.

Here are three things I’ve learned from Warren over the years:

1. it’s not just about investing.

The first thing people learn from Warren, is, of course, how to think about investing. That makes sense, given his great track record. Unfortunately, that’s where a lot of people stop, and they miss out on the fact that he has a whole framework for business think that is very powerful. For example, he talks about looking for a company Canal — its competitive edge — and that the Canal is shrinking or growing. He says that a shareholder has to do as if he owns the entire company, look at the future profit stream and decide what it’s worth. And you should be prepared to ignore the market then follow, because you want to take advantage of the market errors — the companies that have already underpriced.

I have to admit, when I first met Warren, the fact that he had this framework was a real surprise to me. I met him at a dinner that my mother had to put together. On my way, I thought, “why would I want to meet this guy who choose stocks?” I thought he just used different market-related things — such as volume, or how the price was changed over time — for its decisions. But when we started talking that day, he didn’t ask me about any of those things. Instead, he started big questions about the fundamentals of our company. “Why IBM not what Microsoft does? Why Microsoft been so profitable? ” That’s when I realized that he thought about the company in a much more profound way than I give him credit for.

2. use your platform.

A lot of business leaders write letters to their shareholders, but Warren is justly famous for his. That’s partly because his natural good humor shines through. Partly it’s because people think that it will help them invest better (and they are right). But it is also because he has been willing to honestly speaking and criticize things like stock options and financial derivatives. He is not afraid to take positions, such as are standard on raising taxes on the rich, which has its own interests. Warren inspired me to start writing my own annual letter about the work of the Foundation. I still have a ways to go before the mine is as good as Warren ‘s, but it has been useful to be once a year and the results we see, both good and bad.

3. know how valuable your time is.

It doesn’t matter how much money you have, you can’t buy more time. There are only 24 hours in everyone’s day. Warren is a keen sense for this. He does not get his agenda filled with useless meetings. On the other hand, he is very generous with his time for the people who he trusts. He gives his close advisors on Berkshire his phone number, and they can just call him up and he will answer the phone.

Although Warren is a point of meeting with dozens of University classes each year, not many people get to ask for advice him on a regular basis. I feel very happy in that respect: the dialogue has are invaluable to me, and not only from Microsoft. When Melinda and I started our Foundation, I turned to him for advice. We talked a lot about the idea that philanthropy would be just as impactful in its own way as software had been. It turns out that Warren’s brilliant way of looking at the world is just as useful in attacking poverty and disease, as it is in building a business. He is one of a kind.