netnet Posted July 10, 2015 Share Posted July 10, 2015 At the Daily Journal meeting, Munger said (quote below) that Henry Singleton was smarter than Warren Buffett. Singleton was very rational, a truly excellent businessman, (one of the best ever) yet Warren was a way better investor. My question is for us mere mortals, what lessons do we draw from this? Singleton was a genius, as rational as a human can be, versed in the capital markets, unclouded by "conventional wisdom" yet Buffett really out paced him. Once we quell our emotions, gain a circle of competence and behave rationally (admittedly 85% to 95% of the deal) how do you get to that last bit that allows Buffett to lap Singleton as if Singleton were Aunt Minnie? Munger hints that the question is important, but did not answer it! ...[singleton] was a totally rational human being in things like finance. What I found interesting about Henry Singleton, which has interesting educational implications, is that in watching both Henry and Warren invest and operate at the same time, we had two great windows of opportunity to examine human nature. Henry was very rational. He was quite similar to Berkshire in some ways. Henry never issued a stock option. He had certain commonalities with Warren that were just logical outcomes. What was interesting to me was how much smarter Warren was at investing money than Henry. Henry was born a lot smarter, but Warren had thought about investments a lot longer. Warren just ran rings around Henry as an investor even though Henry was a genius, and Warren was a mere almost-genius. (Minor side note, Munger is, of course, going to think more favorably of his business partner of over 50 years and thus is talking his own book; additionally, he and Buffett disagreed with some of Singleton's transactions, but still, Buffett is the better investor. ) Link to comment Share on other sites More sharing options...
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