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Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett, the seventh richest person in the world according to the Bloomberg Billionaires Index, will release his widely anticipated annual shareholder letter on Saturday, revealing his thoughts on the state of the company and the outlook for the stock market, among other topics.
The letter may even include some of the Oracle of Omaha's characteristic nuggets of wisdom.
In a new interview, billionaire Thomas Tull — who runs a holding company called Tulco modeled in part after Buffett's — described just such a piece of advice from Buffett that shifted his approach to investment decisions. At a meeting in Buffett's office in Omaha, the legendary investor shared the lesson during a two-hour conversation, which Tull said he'll "treasure for the rest of my life." The lesson involved an approach taken by Buffett and his longtime business partner, Charlie Munger.
"There was a moment," Tull says. "Where I was describing and talking through the business model [of Tulco] and how I thought about something."
"I said, 'What we're trying to do is be smart about,' and [Buffett] stopped me and said, 'I gotta be honest, for years, Charlie and I have always asked, 'What's the dumb thing we could do here?'"
"I kind of laughed, and he said, 'No, I'm dead serious. We always ask. We don't want to be in the clever pile. What what could we do here that would be the dumb thing, and how do we avoid it?'" Tull says. "Honestly, it actually has had a fair amount of impact on the way that I assess and think about situations."
Since 2017, Tull has led Tulco, a holding company that helps businesses in various sectors improve through the deployment of artificial intelligence and other technical advances. He did not specify when the conversation with Buffett took place. For his part, Buffett has been generous with dispensing his investment advice through the years — advising young investors to understand accounting and to know what they don't know.
'He's incredibly sharp'
In recent years, Buffett has said that traditional institutions that provide expertise — such as colleges and business schools — aren’t necessary for professional success.
Buffett attended The Wharton School at the University of Pennsylvania for two years, then transferred to the University of Nebraska, where he earned an undergraduate degree in business administration. He later received a master’s degree in economics from Columbia University.