Warren Buffett Talks About Long Term Capital Management

Warren Buffett's session with MBA students is continuing. As from this second part, he is again taking questions from the public and using his answer to continue to share his unique perspectives and thoughts.

A member of the audience asks Warren Buffett about the Long Term Capital Management issue where he has been rumoured as a potential rescue buyer. Warren Buffett explains how he had made a bid for that, but what is really interesting is his opinion on what really happened. Despite the fact that not all people involved were really some bad people and that he was a friend with most of them, he says that what fascinated him was their behaviour. He asks himself why clever people do stupid things. Warren Buffett says that he wants to write a book about that, and one of his friends suggested that it should be autobiographical.

The key of his speech is when he talks about why he found Long Term Capital Management's actions. He finds these actions to be so foolish: they risked money they did have and did need, to make money they didn’t have and didn’t need. So, why to risk something that is important to you for something that isn’t?

This video is Part 2 of 10 videos of this MBA Q&A Lecture with Warren Buffett. Watch Part 3 of Warren Buffett's Lecture.

Warren Buffett Quotes from this Video:

  • If you risk something that is important to you, for something that is not important to you, it just does not make any sense
  • Our lives are not that different, the only thing that we do is that we travel differently. What can I do that you can't do?
  • There was a great book... No, it was a lousy book written once with a great title: "You only have to get rich once". That's seems pretty fundamental, isn't it?
  • What difference does it make if at the end of the year you have 110 million or 120 million? It makes absolutely no difference
  • History does not tell you the probabilities of future financial things happening
Submitted by YouTube Trader on Sat, 04/03/2010 - 17:02

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