Warren Buffet Tells a Good Story
It’s not enough that Warren Buffet has generated a net worth of around $62 billion, making him one of the richest men in the world.
He’s also a world-class storyteller. (If it makes you feel any better, at least he’s not handsome.)
With Warren Buffet in the spotlight for rescuing Goldman Sachs with a $5 billion infusion, lending his wisdom on the economic turmoil, and talk of landing the Secretary of the Treasury gig, I thought the timing was right to revisit his other gift.
No question, Warren - I’m adopting his propensity for down-home casual - knows how to turn a phrase. Referring to derivatives as “financial weapons of mass destruction” serves as exhibit A.
But to say that Warren has honed the art of a sound bite sells him short.
This is a guy who knows how to tell a story and effectively apply the technique to the business world as illustrated in his annual letter to shareholders. Yes, the letters contain the facts and figures behind Berkshire Hathaway’s financial performance, but they also bring an element of levity to the equation.
One of my favorite passages appeared in his 2006 shareholders letter:
To add to the Sunday fun Ariel Hsing will play table tennis (ping pong to the uninitiated) from 1 pm to 4 pm against anyone brave enough to take her on. Ariel, though only 11, is ranked number one among girls under 16 in the U.S. I played Ariel, then 9, thinking I would take it easy on her so as not to crush her young spirit. Instead she crushed me …
Self deprecation plays in Peoria.
Let me end this section by telling you about one of the good guys of Wall Street, my long-time friend Walter Schloss, who last year turned 90. From 1956 to 2002, Walter managed a remarkably successful investment partnership, from which he took not a dime unless his investors made money. My admiration for Walter, it should be noted, is not based on hindsight. A full fifty years ago, Walter was my sole recommendation to a St. Louis family who wanted an honest and able investment manager.
Walter did not go to business school, or for that matter, college. His office contained one file cabinet in 1956; the number mushroomed to four by 2002. Walter worked without a secretary, clerk or bookkeeper, his only associate being his son, Edwin, a graduate of the North Carolina School of the Arts. Walter and Edwin never came within a mile of inside information. Indeed, they used “outside” information only sparingly, generally selecting securities by certain simple statistical methods Walter learned while working for Ben Graham. When Walter and Edwin were asked in 1989 by Outstanding Investors Digest, “How would you summarize your approach?” Edwin replied, “We try to buy stocks cheap.” So much for Modern Portfolio Theory, technical analysis, macroeconomic thoughts and complex algorithms.
Following a strategy that involved no real risk – defined as permanent loss of capital – Walter produced results over his 47 partnership years that dramatically surpassed those of the S&P 500. It’s particularly noteworthy that he built this record by investing in about 1,000 securities, mostly of a lackluster type. A few big winners did not account for his success. It’s safe to say that had millions of investment managers made trades by a) drawing stock names from a hat; b) purchasing these stocks in comparable amounts when Walter made a purchase; and then c) selling when Walter sold his pick, the luckiest of them would not have come close to equaling his record. There is simply no possibility that what Walter achieved over 47 years was due to chance.
I first publicly discussed Walter’s remarkable record in 1984. At that time “efficient market theory” (EMT) was the centerpiece of investment instruction at most major business schools. This theory, as then most commonly taught, held that the price of any stock at any moment is not demonstrably mispriced, which means that no investor can be expected to overperform the stock market averages using only publicly-available information (though some will do so by luck). When I talked about Walter 23 years ago, his record forcefully contradicted this dogma.
And what did members of the academic community do when they were exposed to this new and important evidence? Unfortunately, they reacted in all-too-human fashion: Rather than opening their minds, they closed their eyes. To my knowledge no business school teaching EMT made any attempt to study Walter’s performance and what it meant for the school’s cherished theory.
Instead, the faculties of the schools went merrily on their way presenting EMT as having the certainty of scripture. Typically, a finance instructor who had the nerve to question EMT had about as much chance of major promotion as Galileo had of being named Pope.
Tens of thousands of students were therefore sent out into life believing that on every day the price of every stock was “right” (or, more accurately, not demonstrably wrong) and that attempts to evaluate businesses – that is, stocks – were useless. Walter meanwhile went on overperforming, his job made easier by the misguided instructions that had been given to those young minds. After all, if you are in the shipping business, it’s helpful to have all of your potential competitors be taught that the earth is flat.
Maybe it was a good thing for his investors that Walter didn’t go to college.
Classic storytelling.
He builds both context and empathy for the main character. The drama comes in academia refusing to consider that there might be “life” beyond efficient market theory (EMT). Humor is woven throughout the story. And you don’t need to be a numbers jockey to appreciate the benefits of an open mind.
The same mentality comes out when Warren verbally articulated his views in a recent interview on the “Charlie Rose” show. (Thanks to my college fraternity buddy Jim Engle for passing that along.)
He’s definitely figured out a conversational tone trumps striving for the smartest-kid-in-the-class crown.
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To SEO Or Not To SEO (The Headline), That Is The Question
OK, it’s not exactly Shakespeare.
But it does raise a question for communication professionals. Namely, should cleverness or search engine optimization be the guiding principle in writing a news release headline?
I pondered this question after reading the interview conducted by Brian Pittman from the Bulldog Reporter with Meredith Artley, executive editor of LATimes.com.
Specifically, Artley shared:
“We have a graining program to help copy editors write headlines optimized for search. That means headlines that might have used metaphors or clever word usage in the past won’t work anymore — at least not for the website, because people don’t search for turns of phrases. They search for nouns and descriptors. Sure, this may take some of the ‘art’ out of the writing, but an artful headline that nobody sees is useless if you can’t find it on Google.”
Now there’s a sobering comment.
No matter how much drama, humanity and humor you bring to a headline, it’s all for naught if the words don’t resonate with the Google algorithm.
It turns out that this topic has been bandied about for some time, with one of the better posts coming from CNET with the header, “Newspapers search for Web headline magic.”
CNET makes the point that a Wall Street Journal article with the witty headline “Green Beans Comes Marching Home” - about Green Beans Coffee opening its cafe in the U.S. after serving overseas military bases - doesn’t cut it with the SEO generation.
In other words, if you’re looking for information about the intersection of coffee with military bases or soldiers, the takeoff on “When Johnny Comes Marching Home” means zilch to search engines.
As the news release has evolved from a tool for journalists to a form of communication to the average Joe/Joanne, it’s clear that SEO should rule the day at least for the headline.
This is one of those instances when the power of entertaining must give way to vanilla information.
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The Old “Come Back From The Dead” Storyline
Certain storylines never go out of style.
People love to see bullies get punched in the nose (like when Michael J. Fox’s Marty McFly clocked Biff in “Back to the Future”).
Perseverance overcoming all obstacles is another can’t-miss theme.
But there’s no story quite like coming back from the dead to spike the ratings. Such was the case last week when Bloomberg inadvertently published its latest version of Steve Jobs’ obituary, available in its entirety at Gawker.com.
The search volume on Google Trends is just one indicator of substantial traction for the story.
As you would expect, the blogosphere had a field day with the gaffe. There were a few headlines that I thought were particularly good: “Bloomberg: Steve Jobs is dead! Wait, no he’s not” on Ars Technica and “Steve Jobs: Still Not Dead. Film at 11″ on The Unofficial Apple Weblog.
Even the blog serving the society of professional obituary writers — I suppose if you’re not a “professional” obit writer, venture in at your own peril — got in on the fun with the double entendre: “Whoops a daisies!”
Humor is a great tool to snag the audience’s attention from the get go and a powerful element for storytelling in general.
The fact that humor is underutilized in business communications makes it all the more effective.
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Even A Niche Small-Biz Trade Can Go For A Chuckle
You don’t think B2B trade publications have a sense of humor?
Think again.
SmallBusinessComputing recently covered a new storage device from Fabrik with the following photo and caption:
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| Pass the Wasabi: What looks like an elegant way to serve sushi is, in fact, Fabrik’s eco-friendly, bamboo-encased external drive. |
The juxtaposition of the wasabi and a hard disk drive makes for a good caption.
I’ve always thought that if a line brings a smile to the reader’s face, you’re on the right track.
Reminds me of a caption that ran in Electronic News years ago on a new Hitachi optical disc: Holds ten gigabytes of storage or approximately nine jelly donuts. Sure enough, the photo depicted one of the Hitachi executives holding the disc as a serving platter showcasing the finest from the local Dunkin Donuts.
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About This Blog
Businesspeople tend to associate storytelling with fiction.
Yet, the same elements that make a book such as “Moby Dick” a compelling read - good versus evil, care for the characters, humor, etc. - have a place in the business world. Whether it’s a potential customer evaluating your product or a journalist probing your latest news, communicating information in a more entertaining fashion increases your likeability quotient.
And customers, journalists, job candidates and even gadflies gravitate toward companies they like.
Unfortunately, this concept around storytelling is counterintuitive to many business executives, particularly those coming from engineering orientations where science rules the day. I’m not suggesting you need to lose an appendage to a large mammal before anyone will notice you but the ability to build some drama in business communications is a means to capture attention.
That’s the idea behind this blog: To look at the art of storytelling through a business prism.
No doubt, most blog postings will draw from the media world - defining media as any from journalists to an individual with a virtual soapbox since the words are right there in the public domain to scrutinize. But this blog will strive to tackle the bigger challenge of communicating to the outside world in a more entertaining fashion.
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