Introduction

My father, Philip A. Fisher, looked with great pride on Warren Buffett’s adoption of some of his views and on their long and friendly relationship. If my father had been alive to write this introduction, he would have jumped at the chance to share some of the good feelings he experienced over the decades from his acquaintance with one of the very few men whose investment star burned so brightly as to make his dim by comparison. My father genuinely liked Warren Buffett and was honored that Buffett embraced some of his ideas. My father died at 96—exactly three months before I received an unexpected letter asking if I would write about my father and Warren Buffett. This introduction has helped me to connect some dots and provide some closure regarding my father and Mr. Buffett. For readers of The Warren Buffett Way, I hope I can provide a very personal look into an important piece of investment history and some thoughts on how to best use this wonderful book.

There is little I will say about Mr. Buffett since that is the subject of this book and Robert Hagstrom covers that ground with grace and insight. It’s well known that my father was an important influence on Warren Buffett and, as Mr. Hagstrom writes, my father’s influence figured more prominently in Buffett’s thinking in recent years. For his part, as my father became acquainted with Warren Buffett, he grew to admire qualities in him that he felt were essential to investing success but are rare among investment managers.

When Warren Buffett visited my father 40 years ago, in a world with relatively primitive information tools by today’s standards, my father had his own ways of gathering information. He slowly built a circle of acquaintances over the decades—investment professionals he respected and who knew him well enough to understand what he was and wasn’t interested in, and who might share good ideas with him. Toward that end, he concluded that he would meet any young investment professional once. If he was impressed, he might see that person again and build a relationship. He rarely saw anyone twice. Very high standards! In his mind, if you didn’t get an “A,” you got an “F.” And once he had judged against someone, he simply excluded that person, forever. One shot at building a relationship. Time was scarce.

Warren Buffett as a young man was among the very, very few who impressed my father sufficiently in his first meeting to merit a second meeting and many more meetings after that. My father was a shrewd judge of character and skill. Unusually so! He based his career on judging people. It was one of his best qualities and a major reason why he put so much emphasis on qualitative judgment of business management in his stock analysis. He was always very proud he had picked Warren Buffett as an “A” before Buffett had won his much-deserved fame and acclaim.

The relationship between Warren Buffett and my father survived my father’s occasional lapses when he would mistakenly call Mr. Buffett “Howard” (Warren’s father’s name). This is an unusual story that has never been told and perhaps says much about both my father and Warren Buffett.

My father was a small man with a big mind that raced intensely. While kindly, he was nervous, often agitated, and personally insecure. He was also very, very much a creature of habit. He followed daily catechisms rigorously because they made him more secure. And he loved to sleep, because when he slept, he wasn’t nervous or insecure. So when he couldn’t stop his mind from racing at night, which was often, he played memory games instead of counting sheep. One sleep game he played was memorizing the names and districts of all the members of Congress until he drifted off.

Starting in 1942, he memorized the name of Howard Buffett and associated it with Omaha, over and over again, night after night, for more than a decade. His brain mechanically linked the words “Omaha,” “Buffett,” and “Howard” as a related series long before he met Warren Buffett. Later, as Warren’s career began to build and his star rose, it was still fully two decades before my father could fully disentangle Buffett and Omaha from “Howard.” That annoyed my father because he couldn’t control his mind and because he was fond of Warren Buffett and valued their relationship. Father knew exactly who Warren Buffett was, but in casual conversation he often said something like “That bright young Howard Buffett from Omaha.” The more he said it, the harder it became to eliminate it from his phraseology. A man of habit habitually vexed.

Early one morning when they were to meet, my father was intent on sorting out “Howard” from “Warren.” Still, at one point in the conversation, my father referred to Warren as “Howard.” If Warren noticed, he gave no sign and certainly did not correct my father. This occurred sporadically throughout the 1970s. By the 1980s, my father finally had purged the word “Howard” from any sentence referencing Buffett. He was actually proud when he left “Howard” behind for good. Years later, I asked him if he ever explained this to Warren. He said he hadn’t because it embarrassed him so much.

Their relationship survived because it was built on much stronger stuff. I think one of the kernels of their relationship was their shared philosophy in associating with people of integrity and skill. When Mr. Buffett says in regard to overseeing Berkshire Hathaway managers, “We don’t tell .400 hitters how to swing,” that is almost straight from Phil Fisher’s playbook. Associate with the best, don’t be wrong about that, and then don’t tell them what to do.

Over the years, my father was very impressed with how Mr. Buffett evolved as an investor without compromising any of his core principles. Every decade, Mr. Buffett has done things no one would have predicted from reading about his past, and done them well. Within professional investing, most people learn in craft-like form some particular style of investing and then never change. They buy low price-earnings (P/E) stocks or leading tech names or whatever. They build that craft and then never change, or change only marginally. In contrast, Warren Buffett consistently took new approaches, decade after decade—so that it was impossible to predict what he might do next. You could not have predicted his 1970s franchise orientation from his original strict value bent. You could not have predicted his 1980s consumer products orientation at above-market average P/Es from his previous approaches. His ability to change—and to do it successfully—could be a book unto itself. When most people attempt to evolve as he has, they fail. Mr. Buffett didn’t fail, my father believed, because he never lost sight of who he was. He always remained true to himself.

My father was never physically far for very long from Rudyard Kipling’s famous poem, “If.” In his desk, by his nightstand, in his den—always close. He read it over and over and quoted it often to me. I keep it by my desk as part of keeping him close to me. Being insecure but undaunted, he would tell you in Kipling-like fashion to be very serious about your career and your investments, but do not take yourself too seriously. He would urge you to contemplate others’ criticisms of you, but never consider them your judge. He would urge you to challenge yourself, but not judge yourself too extremely either way and, when in your eyes you’ve failed, force yourself to try again. And he would urge you to do the next thing, yet unfathomed.

It is that part about Mr. Buffett, his knack for evolving consistently with his values and past—doing the next thing unfathomed—that my father most admired. Moving forward unfettered by the past restraints, utterance, convention, or pride. Buffett, to my father’s way of thinking, embodied some of the qualities immortalized by Kipling.

Unfortunately, there will always be a small percentage of society, but a large absolute number, of small-minded envious miscreants who can’t create a life of their own. Instead they love to throw mud. The purpose of life for these misguided souls is to attempt to create pain where they can’t otherwise create gain. By the time a successful career concludes, mud will have been thrown at almost everyone of any accomplishment. And if any can stick, it will. My insecure father always expected mud to be thrown at everyone, himself included, but for those he admired, he hoped it would not stick. And when mud was thrown, he would expect those he admired, in Kipling-like fashion, to contemplate the criticism or allegation without feeling judged by it. Always through Kipling’s eyes!

Through a longer career than most, Warren Buffett has acquitted himself remarkably—little mud has been thrown at him and none has stuck. A testament indeed. Kipling would be pleased, as was my father. It goes back to Mr. Buffett’s core values—he always knows exactly who he is and what he is about. He isn’t tormented by conflicts of interest that can undermine his principles and lead to less-than-admirable behaviors. There was no mud to throw so no mud stuck. And that is the prime part of Warren Buffett you should try to emulate. Know who you are.

I am writing this introduction in part to suggest to you how to use this book. Throughout my career, people have asked me why I don’t do things more like my father did or why I don’t do things more like Mr. Buffett. The answer is simple. I am myself, not them. I have to use my own comparative advantages. I’m not as shrewd a judge of people as my father and I’m not the genius Buffett is.

It is important to use this book to learn, but don’t use this book to be like Warren Buffett. You can’t be Warren Buffett and, if you try, you will suffer. Use this book to understand Buffett’s ideas and then take those ideas and integrate them into your own approach to investing. It is only from your own ideas that you create greatness. The insights in this book are useful only when you ingest them into your own persona rather than trying to twist your persona to fit the insights. (A twisted persona is a lousy investor unless you’re twisted naturally.) Regardless, I guarantee that you cannot be Warren Buffett no matter what you read or how hard you try. You have to be yourself.

That is the greatest lesson I got from my father, a truly great teacher at many levels—not to be him or anyone else, but to be the best I could evolve into, never quitting the evolution. The greatest lesson you can glean from Warren Buffett? To learn from him without desiring to be like him. If you’re a young reader, the greatest investment lesson is to find who you really are. If you’re an older reader, the greatest lesson is that you really are much younger than you think you are and you should act that way—a rare gift. Were that not possible, then Mr. Buffett wouldn’t still be ably evolving at what for most people is postretirement age. Think of Warren Buffett as a teacher, not a role model, and think of this book as the single best explanation of his teachings, well stated and easily learned. You can learn an enormous amount from this book, and that can be the foundation for developing your own successful investment philosophy.

Kenneth L. Fisher

July 2013