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Issue date: 5/12/09 Section: News

Warren Buffett Putting the I in MIT

Sloanies meet Warren Buffett in Omaha

On April 17th, twenty-eight students from the MIT Sloan School of Management travelled to Omaha, NE for a visit with Warren Buffett. In Omaha, MIT Sloan was joined by several other MBA programs, including Northwestern, University of Chicago, and Columbia.

The first stop on the trek was a visit to the Nebraska Furniture Mart, a subsidiary of Berkshire Hathaway. Nebraska Furniture Mart is comprised of 712,000 sq. ft. of retail space and offers a wide variety of home furnishings at a reasonable price. The company was founded in 1937 by a Russian immigrant, Rose Blumkin (Mrs. B). Although Mrs. B had no formal education, she found success in business through her simple but powerful business philosophy, "Sell Cheap and tell the Truth."

Next, the group headed to the Field Club of Omaha for Q&A with Warren Buffett. Mr. Buffett spent over two hours with the group answering questions on a broad range of topics, such as politics, economics, investing, family, children, and succession planning at Berkshire. No topic was off the table and Mr. Buffett fielded questions with his characteristic quick wit and good sense of humor.

Mr. Buffett then treated the group to lunch at Piccolo Pete's, an Omaha steakhouse where he continued to field questions from those lucky enough to secure a seat at his table. After lunch, Mr. Buffett generously took pictures with all of the individuals on the trip as well as with the MBA programs as a group.

MIT parted ways with Mr. Buffett for the afternoon and visited another Berkshire subsidiary, Borsheim's jewelry. One aspect of Mr. Buffett's investment style that was apparent from both the Nebraska Furniture visit as well as at Borsheims is the amount of independence that he grants his managers. Mr. Buffett's job is to find good businesses with good managers and to stay out of their way. This allows his managers the independence that they desire and enables Mr. Buffett spend his time identifying other attractive investment opportunities.

Overall, the MIT Sloan students had an unforgettable experience and learned valuable lessons from world's greatest investor. The most important piece of business advice that the group received from Mr. Buffett and his managers related to the importance of ethics and reputation. The notion is best conveyed with a quote from Mr. Buffett, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

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