Trust Me

Who do you trust? Who can you trust these days?

Who will give you the honest truth?  Who has good advice?

Are they the same person in your case?

Well, in this case, if you trusted this guy, you could have gone to the bank on his advice.

Banking Billions on his advice.

You wouldn’t have suspected it given the circumstances he was born into.  He was born in the Dust Bowl of America during the Great Depression. However, he came to represent American business, done the right way.  Invest in America. Slow and steady.

I cannot promise results to partners. – Warren Buffett

Warren Buffett lives in Omaha Nebraska, in the same house he bought in 1958 for $31,500.  Far, far from Wall Street. Consider part of the portrait of the Inspector Guardian:

These hard-nosed and silent Guardians have a distaste for, and distrust of, fanciness in speech, dress, and place. Their words tend to be simple and down home, not showy or high-flown; and their home and work environments are usually neat, their clothes often homespun and conservative rather than of the latest fashion; … price and durability are of primary concern, comfort and appearance given small consideration. … Inspectors prefer the old-fashioned to the new fangled every time. [Please Understand Me II, page 108]

Buffett is considered a “value” investor. In fact, he is the poster child for value investing — making more money investing in old, established mundane businesses rather than high-flying new technology companies. He has said he doesn’t invest in companies he doesn’t understand. But his investment style is much more complicated, and he defies categorization when it comes to investing, having a unique (and wildly successful) style.

Forecasts may tell you a great deal about the forecaster, they tell you nothing about the future.

Warren Buffett.

What he does understand is business. He started making money at the age of five. As he started out on his investment career, he invested, among others, in textiles and newspapers. He knew the newspaper business from experience: he was a paper boy as a teenager. When he was investing in these businesses, the associated industries were in major decline or consolidation. The textile business is an industry left over from the industrial revolution. As manufacturing moved to low-cost labor countries, American textile manufacturers shrunk. Newspapers were a growth industry in the 19th and early 20th centuries.  However, competition from television and radio for news turned a vibrant and competitive market of several newspapers in major towns and cities into consolidations of one major “monopoly” newspaper in most areas. Wall Street was not interested in investing in these businesses, so they were value bargains that attracted Buffet. By investing in these businesses, Buffett got discounted assets and cash flows which he could use to invest in other businesses.

One biased and negative view of Buffett is as a scavenger of American business: getting fat on the misfortunes of asset rich, but stolid, declining, and boring businesses. However, in reality, he stands by businesses in which he invests, and he makes sure that the business is a well run business. He typically rarely sells the businesse that he buys.  If one bought a share of Berkshire Hathaway around the time Buffett did, at about $8, and held it, it’s worth today is about fifteen thousand times its value of 1965: over $120,000.

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Warren Buffett

Buffett was innovative in the realm of effectively using capital. Before the crowd, Buffett realized the businesses of insurance and reinsurance as having great value of cash flow. Berkshire’s favored business is reinsurance. Reinsurance is the wholesale end of the insurance business, requiring large reservoirs of relatively liquid assets. Buffett knew what to do with that cash pool – invest it.

Investments in securities are likely to interest this type, particularly investments in blue chips securities. ISTJs [Inspector Guardians] are not likely to take chances either with their own or other’s money. [Please Understand Me, page 190]

Efficient and effective use of capital have been Buffett’s watch words all his life. When playing golf with his buddies and fellow billionaires, a wager was proposed by Jack Byrne, president of GEICO. For a ‘premium’ of $11, Byrne would pay $10,000 to anybody who made a hole-in-one that weekend. When others reached for their wallets, Buffett didn’t. Razzed by his colleagues for his cheapness, Buffett grinned. Warren Buffett said the premium was too high – he measured a $11 wager the same as he did $11 million.

Trust me.

Knowing Temperament we should have known.  If I had to trust my retirement money to anybody else, but myself, I would bank on Warren Buffett.  Trust him, and trust his Temperament.

18 thoughts on “Trust Me

  1. pam May 6, 2011 / 9:14 pm

    “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
    Warren Buffet”

    one of my commandments..i have learnt a lot from warren buffet.

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  2. Brian Sorgatz May 7, 2011 / 2:33 pm

    Besides those achievements, he also invented the self-serve food table. Or was that Jimmy Buffett?

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  3. Coup Promo June 4, 2014 / 6:10 pm

    I don’t think this is right. Warren is an INTJ. Look at this language. It is almost always abstract. He sees patterns in investment that no one else sees (abstract). He speaks more on principles than on ways of getting things done. I agree with the other 3 dimensions, but he is not an ISTJ. He’s an INTJ.

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    • David Keirsey June 4, 2014 / 7:38 pm

      I would have agreed with you about 20 years ago, before I did a very detailed study of Buffet. I have argued this before in the old forum. First, Warren Buffet is extremely bright and one could argue a genius in finance. So he is very articulate and well studied in business. I have looked at his language and his actions, been watching him for about 20 years, read his bio: Snowball. Look at his “twin” Munger, who is a Rational. Look at Buffet overall. Buffet’s preference is concrete, he knows value in his bones. I recommend reading Snowball if you are interested in the details. He learned some of his principles from Graham and Munger (and brilliantly applies them in detail).

      By the by: I talk in terms of the Inspector Guardian, and no longer do my analysis in terms of the Myers’ letters or linear scales.

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      • Grigory of Siberia April 7, 2015 / 5:05 pm

        If you’d done a “very detailed study” of Warren Buffett, you would have known how to spell his last name…

        You also gloss over the remarkable leaps of intuition and foresight he’s demonstrated in business: the cocoa futures affair, the unique and advantageous structure of his partnership. etc. Calling him an ISTJ is as silly as claiming that he’s an ENTJ. (Which some have tried.)

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      • David Keirsey April 7, 2015 / 9:00 pm

        Yes you caught me in a stupid spelling mistake, that’s pretty dumb in my part. I did spell his name right in end ;-(. Call me a spacey abstract Architect Rational, sometimes not too good at concrete details and I will admit. [I am not a good editor, no doubt.] However, I will stick to my “typing” of Warren Buffett as an Inspector Guardian. (Myers’ ISTJ is another matter I don’t care to speculate on a term I don’t use much anymore). Warren Buffett is a very very smart individual, in fact, smarter than many Rationals in the financial investment domain. You should note that Munger and he work well together. Again, I suggest you read the biography Snowball, I would suggest that, in general, it is hard not see that Buffett is a hardworking Logistical genius, and memorizing the ad prices of the Buffalo News (sorry, my memory is not detailed on this, abstraction is my game)[his first newspaper business he bought], was incredible feat (and very concrete). Guardians can be great at innovative logistical packaging, such as a financial contracts. I will admit Buffett second suit is Rational, but pales compared his first suit as a bottom line Monitoring Guardian.

        Trust me — I could wrong, but I doubt it 😉 http://blog.keirsey.com/2012/01/16/me-arrogant/

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      • grigorylukin April 8, 2015 / 2:51 am

        Actually, I’ve read the full, unabridged edition of Snowball 3 times. 😉 It’s filled with examples of Buffett drawing outside the lines, showing remarkable leaps of intuition, coming up with concepts that had never existed before (using insurance float to fund a holding company for tax purposes), and generally being an aloof NT with a passion and a perfect memory. (Which isn’t exclusive to any one type, mind you.)

        The bit about him living in the same house since 1958 is a bit of a misconception. The house has been extensively remodeled, to the point where it houses 2 full-time bodyguards around the clock. He also has other properties around the country. And he owns a jet. 😛

        Do re-read the chapter about the cocoa bean futures: instead of cashing out like all the others (by trading his stock for cocoa beans and selling them), he realized that the company’s stock will be worth a lot more after the contraction, and ended up making a bundle on that single trade. He also overcame the original programming instilled by Graham and moved on from “cigar butt” companies to move innovative ideas.

        I’m not familiar with your nomenclature and what exactly you mean by Monitoring Guardian – the main thing I disagree with is the #ISTJ tag you have on this page, which leads some googlers to believe that Buffett was a bona fide ISTJ. 🙂

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      • David Keirsey April 11, 2015 / 9:26 am

        I will re-read that section, but obviously we disagree in our view of things.

        “He was as enthused over the knitting business as any other business. It attracted him for the same reason he pored over GEICO’s reports and tracked the growth of their Internet sales week by week; monitored the See’s Candies sales at every single retail store every single day during the holiday season; read the daily sales figures by fax from Shaw Carpets; reviewed the daily reports from Borsheim’s before Christmas; memorized real estate listing statistics from Home Services of America …; recited the jet-fuel costs and ownership statistics for NetJets; and knew ad lineage from the Buffalo News by heart.” [quoted from Snowball].

        Another fact you might consider, almost all descriptions that have been written about Myers’ types are actually derived from my father’s descriptions in Please Understand Me or the his type reprints before that. My father did agree with my assessment of Buffett.

        Monitoring Guardians [Supervisors and Inspectors] correlate to the STJs.

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      • David Keirsey April 11, 2015 / 9:31 am

        Also, I think you are under the wrong impression that Guardians can’t be innovative. Wrong. They can make up rules and laws on the spot, so watch out. 😉

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  4. goodrumo April 11, 2015 / 9:47 am

    Nothing difficult to figure about his Logistical Intelligence. Buffett Inspects, buys a good business and keeps. Inspect, buy good business and keep. Repeat. Repeat. There is nothing Strategic about his actions, this is Lodgistical/Logistical.

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  5. goodrumo April 11, 2015 / 9:50 am

    Keirsey temperament is about Temperament Intelligence, that ‘what we say and do’ and even further, “The Best that we do what we Do Best.”.

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  6. Grigory of Siberia April 12, 2015 / 6:24 pm

    > Monitoring Guardians [Supervisors and Inspectors] correlate to the STJs.
    Would a supervisor/inspector be able to come up with the novel (and as yet unduplicated) concept of a holding company fueled by an insurance company’s float? He invented it, and to date he’s been the only one to successfully run such a company. That right there seems like the greatest display of intuition and genius I’ve ever seen.

    > Another fact you might consider, almost all descriptions that have been written about Myers’ types are actually derived from my father’s descriptions in Please Understand Me or the his type reprints before that. My father did agree with my assessment of Buffett.
    MBTI in its modern form was developed in 1962, 22 years before “Please Understand Me” came out. And if knowledge were inheritable, then Howie Buffett would have been the world’s next great investor…

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    • David Keirsey April 13, 2015 / 12:36 am

      Do you have a copy of the 1962 report? I would recommend reading the 1958 mimeographed MBTI report [I have my Dad’s copy that Isabel gave him] and compare those three brief sentences of each type of Myers to the descriptions in PUM. Don’t misinterpret my comment. Isabel came up with the sixteen types which my father gives credit to her. Myers descriptions were brief, and not based on Kretschmer’s four types of mad behavior[and the four Temperaments]

      You are right in that Howie did not inherent his father’s knowledge, and is no investor. I also have my own “field” of Complexity Science (particularly interested in Klein’s Quartic in Number Theory at the moment). My father created Temperament theory, and I am only trying illustrate it, but I did argue and converse with him about people and their actions for about 50 years.

      Again, I think you are short changing Guardians. I know or knew of some very bright Guardians (one of my professors at Irvine in CS, a professor of mathematics from MIT, professor of OR at Stonybrook, and couple of others). Yes I do think Guardians can come up with logistical (they excel in commerce) innovation, like using the float off the insurance.

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