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In 2002, Financial Times columnist Tony Jackson called miser Buffett a greed: "The closer we look at him, the more he looks like a sort of a great local miser - a man who saves every penny as a young boy, buy the house next door and gets a whole street as a result." It is also often remembered that Buffett continues to live in the house bought in 1958 for $ 31.5 thousand (about $ 280 thousand in current prices).
In addition, the press issues a lot of small stories in which Buffett appears as a man trying to save every penny. His first wife testified that Buffett went in plain clothes for many years, "as long as it does not wear out completely." His daughter told that once she had nothing to pay with for parking. Her father her lent $ 20 and she had to write out a check to Daddy, who was not too lazy to withdraw it. Next story is from a waiter who served Buffett during lunch in a restaurant French Cafe in Omaha. Before dinner, the visitor demonstrated a discount coupon for $ 3.95, and said, "I want this to be reflected in my account." The waiter says: "When they brought the bill, he checked it and found that the discount was given. He laughed about this all the way. However, when laughing, he was half serious." Another story is about how Buffett picked up a one cent coin in his head office. A scene at a chic party complements the image of an extremely thrifty man. Buffett was offered a glass of expensive wine, but refused, answering "No, thank you. I'd rather take the money."
Such an alleged extravagant habit like addiction to Coke is fiercely promoted, too. Here’s the same thing: Buffett keeps repeating he's a fan of cherry cola. It even became the official drink of the annual meeting of "Berkshire Hathaway". According to some accounts, Buffett keeps a large supply of Coke in his office.
Meanwhile, "Berkshire" once was a major shareholder of McDonalds and still owns a major stake in Coca-Cola. We don’t even know whether Buffett visits McDonalds or drink Coke in private. Here are a couple of testimonies. "Berkshire Hathaway" shareholder Andrew Kilpatrick describes lunch with Buffett: "He ordered a sandwich with bacon, lettuce and tomatoes, salad and iced tea. When I ordered a Coke, he exclaimed:" My God!" Louis Rukeyser, well-known economic commentator, said the same about dinner with Buffett: " I was told about the only absolutely certain thing - that Buffett drink nothing but a cherry cola. However, when I ordered iced tea, he immediately said "Sounds good. I would like iced tea as well."
Most of all, Warren Buffett is sincere when he says that luxury does not appeal to him. He is frank when he says that he lives in his first, rather modest house, because he likes it and it's his home. On the other hand, there is a hidden meaning in all of these actions, aimed at demonstrating indifference to luxury. The image of a plain man, a zealous owner saving every cent, is actively supported by Buffett and is part of his public relations campaign. The picture of "the guy" works on business strategy.
Buffett does not even hide that it is just an image. In 1991, he became chairman of the investment bank Salomon Brothers’ board of directors, which got into a huge scandal with treasury obligations fraud. Head of "Berkshire" was called to this position, as he was a major investor in the bank and a person with an impeccable reputation. He began the first press conference on the chairman’s position with the words: "I will try to answer all of your questions in the manner of a guy who never met a lawyer." The press’s respect was guaranteed.
This image was exceptionally good for communication in the highest political circles. For example, Buffett has used it very skillfully, protecting Salomon bank from liquidation. At a hearing in Congress, Buffett was "sort of a shy and modest man with his hat in his hands." Despite its 700 millionth investment in Salomon, congressmen perceived Buffett not as a figure from Wall Street, but a province man, and half thought that Omaha is a farm town. Nebraska’s representative played up, saying that Buffett is a typical guy, "born and raised in the Midwest," "continues to live on a quiet green street in Omaha" and "he fills out his tax returns by himself". No surprise that Buffett's investment bank was saved.
This sometimes slips in the media, quite explicitly. For example, in 1992 Wall Street Journal wrote that a "tough, well-trained businessman" hides under the guise of the folklore nerd.
Warren Buffett is not as stingy as he is credited. Back in 1986, he bought a private plane for the company’s business. A year later, one of the British billionaire James Goldsmith said he does not understand people like Buffett, "proud of the fact that they live in their first home, and ride Chevrolet, despite the fact that they are billionaires." This was said in a private conversation with a journalist, but got into The Times. Buffett himself may not have even known about the article, but Goldsmith called to apology. Journalists began to ask Buffett what he thinks about all this, and he replied that he did not ride a Chevrolet, neither old nor new, as he’d been choosing Cadillac for already 20 years. He also added: "I met Jimmy Goldsmith several times. The last time - three or four weeks ago in Boston. I went there not by Chevrolet, but our old corporate jet ... And I cannot think of anything in life, which I do not have." He very correctly told about Goldsmith’s taste (the man likes luxury and pomp): "Different people like different styles."
Curiously, Buffett's passion to fly a private jet is widely used for business promotion. Thus, in a letter to "Berkshire" shareholders, Buffett once told his family fly with NetJets, a private aviation service provider owned by "Berkshire", and even provides statistics - how many hours he with his wife have flown for a year.
And yes, Buffett has long been buying expensive things. Journalists still remember his past indifference to clothes and try to pick on him. Once asked why he wore cheap suits, he answered simply brilliant: "I buy expensive costumes. They just look cheap on me."
Elements of conspicuous consumption can be seen in Buffett's behavior. This term suggested by Thorstein Veblen in his book "The Theory of the Leisure Class" (1899). Veblen outlined wasteful spending on goods and services with a primary purpose to demonstrate the wealth. This behavior is to achieve, support or simulate high social status, and can be considered rational as demonstration of membership of a particular social group helps to earn on it. Followers of Veblen showed that conspicuous consumption is more common among not very wealthy people: a demonstration of expensive items designed to combat the impression of low income.
Buffett’s conspicuous consumption - hamburgers and Coca-Cola – is a contrary conspicuous consumption. This is one element his strategy, which made him a cult figure of American pop culture. Buffett's name can be found not only in books on investing and financial magazines covers, but also on the front pages of popular publications and T-shirts. It is possible that such popularity gives extra points when investing: it is able to indirectly influence shares of companies bought by him. In addition, such an image can attract owners spiritually close to him, so that first class assets can be sold at affordable prices. (Many sellers continue to lead the business after the sale, and they feel more comfortable to work with an owner, who has similar values with them.)
Finally, Buffett's popularity attracts a lot of people to "Berkshire" shareholders’ meeting - in 2015, about 44 thousand people came to the meeting. At the gathering, called the Woodstock for capitalists, "Berkshire" sells almost all goods produced by the company, and all the services rendered - from cowboy style Justin Boots to car insurance GEICO.
based on "The Warren Buffett Philosophy of Investment" by Elena Chirkova
In addition, the press issues a lot of small stories in which Buffett appears as a man trying to save every penny. His first wife testified that Buffett went in plain clothes for many years, "as long as it does not wear out completely." His daughter told that once she had nothing to pay with for parking. Her father her lent $ 20 and she had to write out a check to Daddy, who was not too lazy to withdraw it. Next story is from a waiter who served Buffett during lunch in a restaurant French Cafe in Omaha. Before dinner, the visitor demonstrated a discount coupon for $ 3.95, and said, "I want this to be reflected in my account." The waiter says: "When they brought the bill, he checked it and found that the discount was given. He laughed about this all the way. However, when laughing, he was half serious." Another story is about how Buffett picked up a one cent coin in his head office. A scene at a chic party complements the image of an extremely thrifty man. Buffett was offered a glass of expensive wine, but refused, answering "No, thank you. I'd rather take the money."
Such an alleged extravagant habit like addiction to Coke is fiercely promoted, too. Here’s the same thing: Buffett keeps repeating he's a fan of cherry cola. It even became the official drink of the annual meeting of "Berkshire Hathaway". According to some accounts, Buffett keeps a large supply of Coke in his office.
Meanwhile, "Berkshire" once was a major shareholder of McDonalds and still owns a major stake in Coca-Cola. We don’t even know whether Buffett visits McDonalds or drink Coke in private. Here are a couple of testimonies. "Berkshire Hathaway" shareholder Andrew Kilpatrick describes lunch with Buffett: "He ordered a sandwich with bacon, lettuce and tomatoes, salad and iced tea. When I ordered a Coke, he exclaimed:" My God!" Louis Rukeyser, well-known economic commentator, said the same about dinner with Buffett: " I was told about the only absolutely certain thing - that Buffett drink nothing but a cherry cola. However, when I ordered iced tea, he immediately said "Sounds good. I would like iced tea as well."
Most of all, Warren Buffett is sincere when he says that luxury does not appeal to him. He is frank when he says that he lives in his first, rather modest house, because he likes it and it's his home. On the other hand, there is a hidden meaning in all of these actions, aimed at demonstrating indifference to luxury. The image of a plain man, a zealous owner saving every cent, is actively supported by Buffett and is part of his public relations campaign. The picture of "the guy" works on business strategy.
Buffett does not even hide that it is just an image. In 1991, he became chairman of the investment bank Salomon Brothers’ board of directors, which got into a huge scandal with treasury obligations fraud. Head of "Berkshire" was called to this position, as he was a major investor in the bank and a person with an impeccable reputation. He began the first press conference on the chairman’s position with the words: "I will try to answer all of your questions in the manner of a guy who never met a lawyer." The press’s respect was guaranteed.
This image was exceptionally good for communication in the highest political circles. For example, Buffett has used it very skillfully, protecting Salomon bank from liquidation. At a hearing in Congress, Buffett was "sort of a shy and modest man with his hat in his hands." Despite its 700 millionth investment in Salomon, congressmen perceived Buffett not as a figure from Wall Street, but a province man, and half thought that Omaha is a farm town. Nebraska’s representative played up, saying that Buffett is a typical guy, "born and raised in the Midwest," "continues to live on a quiet green street in Omaha" and "he fills out his tax returns by himself". No surprise that Buffett's investment bank was saved.
This sometimes slips in the media, quite explicitly. For example, in 1992 Wall Street Journal wrote that a "tough, well-trained businessman" hides under the guise of the folklore nerd.
Warren Buffett is not as stingy as he is credited. Back in 1986, he bought a private plane for the company’s business. A year later, one of the British billionaire James Goldsmith said he does not understand people like Buffett, "proud of the fact that they live in their first home, and ride Chevrolet, despite the fact that they are billionaires." This was said in a private conversation with a journalist, but got into The Times. Buffett himself may not have even known about the article, but Goldsmith called to apology. Journalists began to ask Buffett what he thinks about all this, and he replied that he did not ride a Chevrolet, neither old nor new, as he’d been choosing Cadillac for already 20 years. He also added: "I met Jimmy Goldsmith several times. The last time - three or four weeks ago in Boston. I went there not by Chevrolet, but our old corporate jet ... And I cannot think of anything in life, which I do not have." He very correctly told about Goldsmith’s taste (the man likes luxury and pomp): "Different people like different styles."
Curiously, Buffett's passion to fly a private jet is widely used for business promotion. Thus, in a letter to "Berkshire" shareholders, Buffett once told his family fly with NetJets, a private aviation service provider owned by "Berkshire", and even provides statistics - how many hours he with his wife have flown for a year.
And yes, Buffett has long been buying expensive things. Journalists still remember his past indifference to clothes and try to pick on him. Once asked why he wore cheap suits, he answered simply brilliant: "I buy expensive costumes. They just look cheap on me."
Elements of conspicuous consumption can be seen in Buffett's behavior. This term suggested by Thorstein Veblen in his book "The Theory of the Leisure Class" (1899). Veblen outlined wasteful spending on goods and services with a primary purpose to demonstrate the wealth. This behavior is to achieve, support or simulate high social status, and can be considered rational as demonstration of membership of a particular social group helps to earn on it. Followers of Veblen showed that conspicuous consumption is more common among not very wealthy people: a demonstration of expensive items designed to combat the impression of low income.
Buffett’s conspicuous consumption - hamburgers and Coca-Cola – is a contrary conspicuous consumption. This is one element his strategy, which made him a cult figure of American pop culture. Buffett's name can be found not only in books on investing and financial magazines covers, but also on the front pages of popular publications and T-shirts. It is possible that such popularity gives extra points when investing: it is able to indirectly influence shares of companies bought by him. In addition, such an image can attract owners spiritually close to him, so that first class assets can be sold at affordable prices. (Many sellers continue to lead the business after the sale, and they feel more comfortable to work with an owner, who has similar values with them.)
Finally, Buffett's popularity attracts a lot of people to "Berkshire" shareholders’ meeting - in 2015, about 44 thousand people came to the meeting. At the gathering, called the Woodstock for capitalists, "Berkshire" sells almost all goods produced by the company, and all the services rendered - from cowboy style Justin Boots to car insurance GEICO.
based on "The Warren Buffett Philosophy of Investment" by Elena Chirkova
