Devoted to Managers and those that seek to improve their management skills

Tied Their Fortunes to Their Partners Fortunes

In a move that a large number of business leaders won't and don't do, Warren Buffett and chief partner Charlie Munger put their money where their mouths are. The vast majority of their stock ownership and net-worth is in Berkshire Hathaway (BRK-A) stock.

Buffett said, “…we can guarantee that your financial fortunes will move in lockstep with ours for whatever period of time you elect to be our partner.”

That was Buffetts' way of saying that they don't risk partners' money while they have their money stashed away in some other investment. And he and Munger have been true to their word. Their fortunes go up and down with the fortunes of Berkshire.

This is important because it shows the level of confidence the men have in their outlook on business and the purpose the company exists. It also shows a level of integrity that is an example to other business leaders.

If the vast majority of business leaders had their fortunes tied up in the businesses they were running, would they do things the same? Would they take the same steps and risks that they take now? Why do so many sell off their shares while many of their shareholders are still hanging on to theirs?

The answer is that their way of doing business isn't as convincing to them as they may put out. If you believe in what you're doing, why would you sell off huge chunks of your stock? Buffett and Munger don't have that problem, and neither do Berkshire shareholders. It speaks to the level of confidence and competence that they keep their money primarily in the business they run.

When they win, their partners and shareholders win as well. It's a powerful example and motivator for those that believe in what Berkshire represents. It would be good to see other business leaders have that same belief in themselves as well.

Other Buffett Sources:

10 Secrets Hidden in Warren Buffett's Wallet

The Warren Buffett You Don't Know

Warren Buffet-Strategic Planning

Some practical advice from investment guru Warren Buffett

Wisdom of Warren Buffett

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