Did Warren Buffett’s Renowned Optimism Grant Him Success? Melinda Gates Thinks So
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Which came first: The optimism or the success? For Warren Buffett, he’ll tell you that he’s always been optimistic, even before he was successful. Melinda French Gates believes that Buffett’s renowned optimism led to his success.
Melinda French Gates – the co-chair of the Bill & Melinda Gates Foundation – noted Buffett’s optimism in the foundation’s 2017 Annual Letter.
“Optimism is a huge asset. We can always use more of it,” Gates wrote to Buffett. “But optimism isn’t a belief that things will automatically get better; it’s a conviction that we can make things better. We see this in you, Warren. Your success didn’t create your optimism; your optimism led to your success.”
“It’s especially valuable to stay optimistic when you face disappointments, and we’ve had more than a few,” Melinda continued. “But if you’re optimistic, disappointments are just disappointments. You don’t twist them into evidence that the world is getting worse.”
In the 2018 Annual Letter, Bill and Melinda Gates also spoke of the importance of optimism.
“But being an optimist isn’t about knowing that life used to be worse,” the Gates wrote. “It’s about knowing how life can get better. And that’s what really fuels our optimism.”
Data Shows Warren Buffett Is Optimistic
There is actual data that Warren Buffett is an eternal optimist. Data scientist and consultant Michael Toth performed a “sentiment analysis of the text of Warren Buffett’s letters to shareholders from 1977 to 2016.” Toth found that Buffett’s tone is overwhelmingly positive in the letters to Berkshire Hathaway shareholders.
In many ways Warren Buffett’s letters are atypical. When most companies report their financial performance, they fill their reports with dense, technical language designed to obscure and confuse. Mr. Buffett does not follow this approach. His letters are written in easily understandable language, beacuse he wants them to be accessible to everybody. Warren Buffett is not often swayed by what others are doing. He goes his own way, and that has been a source of incredible strength. In annually compounded returns, Berkshire stock has gained 20.8% since 1965, while the S&P 500 as a whole has gained only 9.7% over the same period. To highlight how truly astounding this performance is, one dollar invested in the S&P in 1965 would have grown to $112.34 by the end of 2016, while the same dollar invested in Berkshire stock would have grown to the massive sum of $15,325.46!
The results showed that from all of the letters sent from 1977 until 2016, only five letters featured more negative sentiments than positive. Those five letters were negative for valid reasons, such as the 1987 Black Monday market crash and the Great Recession of 2008.
In the letters that were positive, Buffett used encouraging words such as: “extraordinary,” “excellent,” and “outstanding.”
Warren Buffett Would Be Happy Even Without His Billions Of Dollars
Inc. noted that Buffett’s optimism shined through in an interview from 2017. PBS host Judy Woodruff about his vast wealth – Warren Buffett’s net worth is currently $104.4 billion, the eighth richest person in the world.
Buffett noted, “Ninety-nine percent of my net worth is in Berkshire Hathaway stock.”
He added, “They have no utility to me. They can’t do anything to make me happier. ”
“I’m already happy. I would be happy with, you know — certainly with $100,000 a year, I could be very happy,” Buffett continued. “And they can’t buy anything for me that I want. If they did, I would buy it.”