Buffett's Strategic Plan? Something will Eventually Come Along
As with everything concerning Warren Buffett, this is very easy to understand theoretically, but difficult to execute.
We have to understand that Buffett is the CEO of a conglomerate. So the basis for his "plan" must by implication mean the rest of the company in general is set up to feed that plan. Again, it's easy enough to understand, but try executing that plan across a myriad of companies.
In this case Buffett is talking about taking the financial resources produced by the various companies under the Berkshire Hathaway (BRK-A) umbrella, and investing them in strategic businesses for the most part. There are exceptions to that rule, but the underlying fundamental is to invest in a company before anything else.
What does Buffett do to prepare for those occasional opportunities that come along? He has the money of the company mostly in cash so he can immediately transfer it to the investment opportunity that presents itself.
What are a couple of the implications of this behavior? Buffett understands that there are limitations to strategic planning. He looks for opportunities to emerge based upon his working principles. If it isn't within his understanding he passes on it.
The second thing implied by this is he and Berkshire are nimble. They don't have any process they must go through to get access to their funds. They have it in low yielding cash investments so they can transfer it with a two-minute phone call.
These are things that can be applied to our own businesses as well. We must understand the limitations of strategic planning and have access to funds available that can be drawn upon when opportunities present themselves to us. This will work across any category of business we work in.
"Something eventually will come along" means these two things must be in place to succeed and grow. It's those that are prepared that will win the prize. We need to be prepared!
Other Buffett Resources:
Warren Buffett: The trouble with being a legend
Warren Buffett: 'I told you so'
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