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

Banking: "If you can just stay away from following the fads and making bad loans, [it] has been a remarkably good business."

Is there anything different in investing than there is in business as far as the quality of decisions go? Not really. That's part of the point Warren Buffett makes in talking about banking as a business and investment possibility.

With investing, most people know that you don't throw a large part of your money into things like options and commodities, they're almost impossible to guarantee any success with. Only the very best experts in these fields know how to make money with these. And even if you hired the best to advise you, you would still only take a small percentage of your capital to invest there.

That's similar to what Buffett is saying about fads above: we need to stay away from them, no matter what business we're in. As far as banking goes, I lived in Texas when the Savings & Loan business fell, and it was unbelievable the risk these financial institutions had taken in reference to the oil industry. The whole thing almost collapsed; it would have if not for government intervention. This is all connected to the lure of fads.

Now when Buffett talks about bad loans, we could equate that to anything in our businesses that are connected to fads. Simply put in the place of lending what it is that makes our business what it is, and you'll find the thing that could destroy you in relationship to fads.

All the noise about the Internet changing everything was another fad. It doesn't change the underlying principles of business ... nothing ever will. It can change operations and distribution channels, but not what makes a business a business.

Banking, like everything else in business, requires tremendous discipline. The willingness/discipline to sit out what looks like great opportunities and quick cash, is one of the real keys to great managment and long-term success. And do you know what's interesting? Most people in business leadership won't believe that. That's to our advantage.

Warren Buffett sat out the entire dotcom bomb with people mocking and deriding him for not entering into the fiasco. They considered his way of doing things long past being effective in the "Internet" age. We know who and what way of doing business had the last laugh there. You don't hear any of the big mouths saying that this time around.

Other Buffett Resources:

Wisdom of Warren Buffett

Warren Buffett, investor

Warren Buffett: The trouble with being a legend

Warren Buffett: 'I told you so'

Company growth

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