LEADERSHIP WARREN BUFFETT'S SECRET TO SUCCESS: HE KNEW HOW TO CHANGE HIS MIND

KNEW HOW TO CHANGE HIS MIND

- BY GEOFF COLVIN

ON JULY 3, 2006, Warren Buffett drove to the U.S. Bank branch in downtown Omaha, walked in, went downstairs, and opened his safe-deposit box. He removed a piece of paper, a certificate for 121,737 shares of Berkshire Hathaway stock. It was worth about $11 billion. The money from the sale of those shares, a fraction of his Berkshire holdings, would be the first tranche in his program to give away virtually all his wealth.

That bank visit was a bookend in Buffett's life, a fittingly financial signal event in the life story of the man widely regarded as the world’s greatest investor. He told Fortune at the time that it reminded him of a visit to that same bank, then called Omaha National, almost 70 years earlier, an event that in retrospect seems the other bookend in Buffett’s financial life. He was 6 years old. His father set up a savings account for him and put $20 in it.

Between those two bank visits, Buffett created Berkshire Hathaway, made it America’s largest conglomerate (now No. 6 on the Fortune 500), and became globally famous. On May 3, he signaled the end of that remarkable run, announcing that he would hand the CEO reins to his longtime lieutenant Greg Abel at the end of this year.

Buffett will be leaving with an unmatchable record. He achieved a 19.9% average annual return to Berkshire shareholders from 1965 through 2024, or about 5.5 million percent in total for original investors, including himself. By the 2020s his wealth would have reached over $200 billion, making him the world’s richest person—if he hadn’t given away so much of his stock.

Thus the obvious questions that have transfixed investors for decades:

How did Buffett grow $20 to well over $200 billion? Why weren't others able to do it? How did he find the secret? What is the secret?