Warren Buffett Always Wins, Because He’s Transparent

The concept of Warren Buffett’s annual letter to Berkshire Hathaway shareholders is, on the surface, a simple one: he makes investments on behalf of those shareholders, so it’s generally a good thing that he reports what he is up to every year or so.

But the letters, which are available to anyone who wants to download them, have become something bigger. The announcement of the 2014 letter, along with the release of an excerpt through Fortune Magazine, was major news. It’s mentioned in the same breath as the Dow Jones rising 200 points and is covered by a wide variety of news institutions. The full letter, by the way, is available as well.

Buffett is incredibly influential, make no mistake. But assuming that his annual letter gets the sort of press it does because of Buffett’s wealth and reach would be incorrect. He is influential because of his letters, and other similar efforts he’s made to show exactly what he’s doing. His approach dates back to long before ‘transparency’ was a buzzword. He’s always been willing to discuss his methods in an industry where secret algorithms and the value of information are the norm. The real reason for Buffett’s success is his openness.

  • People believe that they can follow the Sage of Omaha’s investment approach (whether or not it’s universal is a question for another day).
  • The executives who work with Buffet tend to be very well-rewarded, particularly with future opportunities.
  • Investors are more than happy to hand money to Buffett, not just because of his historical returns, but because they know just how much risk he’s willing to take on.

It may sound crazy, but consider how being open about your work and what you do each day could help you build more trust with customers and anyone else you’re trying to reach. After all, it’s worked for Warren Buffett.

7 Comments

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