Benjamin Pappas 2/25/25 Benjamin Pappas 2/25/25

My Mentors: Warren & Charlie

How an unexpected trip to Omaha changed my thinking.

On a bit of a whim I attended the Berkshire Hathaway Annual Meeting in Omaha in May 2024, after having been invited on the trip by a delightful group of investors and business operators. I didn’t fully appreciate what I was walking into but was so struck by a book I picked up about Charlie Munger that I spent the next several months working to add Warren Buffet and Charlie Munger to my list of mental mentors, and they did not disappoint.

To get them solidly installed on my mental mentors list I committed the time to listen to every minute of the Berkshire annual meetings from 1994 forward, read a number of books related to Warren & Charlie, watched documentaries, and read a slew of the Berkshire annual letters (note: I listed some of my favorite readings below). While it’s nearly impossible for me to compress the nature of these two gentlemen into a simple blog post, the primary take-aways or mental models are as follows:

The value of enjoying your work. In listening to the Berkshire podcasts both Warren and Charlie regularly commented that they genuinely are doing what they enjoy most every day. For Warren, it seems like it’s thinking about how to make great investments (and drinking Coke). For Charlie it seems like accumulating and deploying a vast array of knowledge from reading. Both seemed to genuinely LOVE what they do, and that’s what allowed them to be great. During the 2024 annual meeting (the first one after Charlie passed) a young man asked Warren what he would do if he could have just one more day with Charlie. Warren responded that in many ways they had many “one more day” opportunities together because they genuinely loved what they did every day - so all of their days were just how they wanted them to be and having one more wouldn’t have changed anything. What a way to live!
The difference between investing and speculating. Investing is deploying resources after thorough analysis (Criteria 1) with the reasonable expectation of the safe return of your capital (Criteria 2) and a return above the “do nothing” rate of return (Criteria 3). Anything that doesn’t include all three of the aforementioned criterion isn’t investing - it’s speculating. Nothing wrong with that but be real about what you are actually doing.
Find your Charlie. Warren went to great lengths over the years to credit Charlie with altering his thinking about investing, pivoting him from being a "cigar butt” deep value investor to buying good companies at a reasonable price and holding them forever. Beyond that, it’s clear that their partnership benefitted them both a great deal, with Warren being incredibly narrow and focused, and Charlie being an incredibly adept, broad thinker (and generally being a skeptic). Both of these men would have been successful in their careers without each other…but together they became legendary and had a ton of fun.
The power of compounding. As someone with a strong math and science background I’m well aware of the math behind compounding numbers but there is nothing like being reminded that even making market average returns gets to be pretty big numbers if you start early and live a long time…but most people don’t have the patience. It’s worth noting that this applies to almost everything: your money, your health, your knowledge, your relationships, etc. If you can regularly compound your efforts in most domains, you can end up with an exceptional result in the fullness of time.
Stick to your circle of competence. It’s helpful to be keenly aware of what areas you have unique knowledge of and enjoy thinking about such that you spend a lot of time predicting likely outcomes. If you aren’t smarter than your competitors go to a space where you can win and stand thinking about for extended periods of time. Otherwise, you’ll get beat by someone who is maniacally focused on kicking your butt.