Determine Your Operating Principles

I’m reading an interesting book called Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book by Carol Loomis.

The reason I like it so much is that it contains articles from Fortune Magazine that somehow connected to Warren Buffett over a 47-year period of time. So it’s not a retrosepctive book, except for a few opening paragraphs from Carol Loomis before each Fortune article, but rather a book of articles as they were actually written at that time in his life.

What I found fascinating is the clarity and consistency of his operating principles for his business and his approach to both investing and managing. The only thing that substantially changed in his approach over his entire business career is that he went from buying stocks in weak companies that were undervalued (the “one puff left in the cigar” concept from Ben Graham) to buying parts of or all of great companies whether they are famous or not (which he learned from his partner Charlie Munger).

What are the five or six operating principles that you feel your business should run on every day? Buffett’s massive success is largely due to his discipline in staying true to his basic operating principles for all these years. You don’t need to use his, but I do believe you need to clarify yours and stick to them consistently.

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