Getting Advice from the Master
UCSD students interested in business spend day with investment guru Warren Buffett
Ioana Patringenaru | Nov. 8, 2010
Fourteen undergraduate and six graduate students from UC San Diego pose with Warren Buffett in Omaha Oct. 22.
Don’t get into credit card debt. Don’t make any business decision that you wouldn’t like to read about on the front page of The Wall Street Journal. Learn to master public speaking. Marry someone who will be supportive and uplifting. That was some of the advice investment guru Warren Buffett gave 20 undergraduate and graduate students from UC San Diego when they met him last month during a student gathering he hosts every year in Omaha, Neb.
The students, from the Rady School of Management and UCSD’s Undergraduate Investment Society, said Buffett inspired them to pursue their dream jobs. “Ask yourself: If you won the lottery, would you still go to work the next day?” was how he put it.
Students also were surprised at how down-to-earth Buffett turned out to be. He made self-deprecating quips and shared personal thoughts. “He’s like the grandfather you wish you’d have,” said Michael Tam, a recent graduate, who was instrumental in arranging the trip to Omaha.
As president of the Undergraduate Investment Society, Tam wrote Buffett to ask him to be the keynote speaker at the organization’s annual conference. Much to his surprise, Buffett wrote back. He couldn’t come, he said. Would UCSD students like to attend one of the Q&A sessions he holds with business students on a regular basis?
Senior Alan Li with Buffett.
The answer, of course, was "Yes." Now students had to find the money to get themselves to Omaha. Alan Li, an economics major, set out to help. With other investment society members, he reached out to the Rady School, the Chartered Financial Analyst Society of San Diego and the UCSD Foundation, and was able to raise $10,300 to cover travel costs for all 20 students headed for Omaha.
Li was so nervous about meeting Buffett that he couldn’t sleep once he got to Nebraska. During their one-day meeting with Buffet, students toured two businesses owned by Berkshire Hathaway, including the largest home furniture store in the United States, took part in a Q&A session and had lunch at Piccolo Pete’s, Buffett’s favorite restaurant, where they enjoyed steaks, fries and root beer floats. No one ate much. Everyone was too busy snapping pictures with Buffett, said Linda Xie, a second-year UCSD student and economics major.
During the Q&A session, Buffet cautioned students that the recession isn’t really over, despite government reports. Markets are still depressed, but in the long run, the U.S. economy still offers unique opportunities, he also said. A good short hand for his message would be “When people are greedy, be fearful, but when people are fearful, be greedy,” said Jamie Homrig, a second-year student at the Rady School.
Buffett’s guiding principles in business are simple and common sense, yet few people put them into practice, Homrig also said. Spend less than you earn, Buffett advised. Invest what you don’t spend. Don’t get into credit card debt. Once you do, there’s no investment that can make up for the interest and finance charges.
Sunny Cho, a science management major, with Buffett.
Buffett also put a strong emphasis on ethics. Business decisions should be made with integrity, he said. Visualize yourself at the center of a circle defined by your principles. If you’re constantly stretching your boundaries and pushing your limits, you will inevitably find yourself outside of the circle one day, he told his audience.
A Rady instructor made a similar analogy during a class recently, Homrig said. It’s called “The Wall Street Journal test,” he added: if it shows up on the front page of that paper, you better be happy with it.
One offshoot of Buffett’s strong emphasis on integrity is his focus leadership. When he buys a company, he doesn’t want to run it, Homrig said. He wants it to run itself—and ethical leaders are key. Buffet gave the example of a deal he recently inked in China. Because of heavy governmental regulations, it took a year to complete. During that time, stock in the Chinese company he wanted to acquire went up from $8 to $40 a share. The company’s leader was a powerful Chinese businessman, who could have pulled out of the deal and sold his company at a bigger profit. But he didn’t. He kept his word.
Buffett also had some self-improvement tips for students. Being convincing is a key business asset, so learning public speaking is crucial, he said. The only diploma hanging in his office comes from a Dale Carnegie public speaking course he took as a young businessman. Each week, students in the course received a prize for the most daring feat of public speaking. Buffett won when he finally worked up the courage to propose to his wife. By the way, choosing the right life partner, who will support you every day, is also key, Buffett said.
Buffett’s talk had a deep impact on the UCSD students who went to hear him in Omaha. Seeing someone so successful who loves their job inspired Sunny Cho, a UCSD management science major, to take risks and find out what she truly loves. Cho is torn between making her own way in the world and going back to South Korea to take over her father’s business. He brought her here 10 years ago in search of a better education, she said.
Linda Xie, a sophomore, with Buffet.
For Tam, the recent graduate, it validated his goal to ultimately become an investment analyst in the clean tech industry. “I want to make an impact and make a change for the next generation,” he said.
For Xie, the sophomore, it reinforced her decision to finish up her studies as soon as possible so she can get out into the working world. She plans to graduate in three years, she said. She is enrolled in five classes this quarter and is involved in a start-up business that sells inflatable props for entertainment venues.
Li, the senior and economics major, said he now plans to enroll in a public speaking course of some sort. He is thinking about starting his own hedge fund some day.
Homrig, the Rady student, is pondering starting his own business or working in private equity. He said Buffett is a personal idol, not just because he succeeded, but because of how he attained success.
“He follows his principles, he doesn’t cheat, he doesn’t break the rules,” Homrig said. “And he’s done really well.”