Buffett’s last lesson: Luck, legacy and life well-lived

Inhis recent and possibly the last communication from Berkshire, Warren Buffet did something remarkable. Instead of mentioning the usual quintessential metrics of book value, operating margins and business ‘moats’, the 95-year-old Oracle of Omaha delivered a masterclass in something far more profound – the art of a life well-lived. Underpinned by gratitude, a clear-eyed acknowledgement of luck and a focus on enduring legacy.

Luck, the unseen architect: When discussing with students, I usually ponder the aspects of luck and risk. Are risk and luck, two sides of a same coin, etc. Buffet’s acknowledgment that his very survival till 95 is largely a matter of luck, is a startling admission from one of the most disciplined and rational minds in business. For a man who built an empire through meticulous calculation and intense focus, to credit something as fickle as fortune is a powerful corrective to the myths, we tell ourselves about success.

Arguably, the role of luck is most underrated force in the world of investing. We craft narratives of our brilliance after a successful trade, attributing gains to our shrewd analysis or impeccable timing. We speak of ‘skill’ when our portfolio outperforms yet often chalk up losses to “bad luck.” This self-serving bias is a dangerous illusion. His words, steeped in the wisdom of a man reflecting on a near-century of life and investing, are not just a sentimental footnote. They are a crucial framework, particularly for anyone navigating the turbulent waters of investing and building a career.

Consider the sheer luck of your starting point or sequence of returns risk. Being born in a stable country, in an era of capital markets, with access to education and information is certainly a matter of luck. Reflect on an investor who entered the market in the early 1980s rode a generational bull market while another who started in 2007 faced immediate, searing tests. The same strategy can yield wildly different outcomes based on the arbitrary date of its inception.

Buffett himself would be the first to admit that his own success was inextricably linked to being born in 1930s America, with a father who was a stockbroker, and discovering his passion for compounding at the age of 11. It was the ‘Ovarian Lottery,’ as he once famously called it. By highlighting luck, he isn’t dismissing hard work or intelligence, but is instilling a necessary dose of humility. It is the antidote to the hubris that has been the downfall of countless ‘genius’ investors.

Roots and Relationships form the bedrock of values. The letter was also a poignant tribute to his roots in Omaha and the people who shaped him, most notably his late partner, Charlie Munger.

Charlie Munger didn’t just help Buffett find better companies but he helped shape a worldview based on rationality, patience, and a multidisciplinary understanding of the world. This underscores a critical point - the most valuable asset in your investing career isn't a specific stock tip - it's the wisdom of trusted mentors and the strength of your own moral compass.

Legacy over Lucre, the real bottom line for any life. Perhaps the most resonant part of Buffett’s message was his urgent plea to future leaders. He urged a focus not on accumulating money or fame, but on kindness, good conduct, and building a meaningful legacy.

Kindness means conducting business with integrity, treating management teams and employees with respect, and investing in companies that are forces for good.Good conduct means avoiding the speculative frenzy, being honest about your mistakes, and adhering to a disciplined strategy even when it’s unfashionable. It’s about playing the long game, both in your portfolio and in your reputation. Graham his inspiration and mentor wrote, ‘The Intelligent Investor’, a book which formed a thesis and life of Buffet, but the disciple has enriched that to an ‘Integrated Investor’.

(The author is a partner with Wealocity Analytics, a SEBI registered Research Analyst firm and could be reached at info@wealocityanalytics.com)