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Warren Buffett: Pick a Classmate to Buy 10% Of. Now Look at Why You Chose Them.

By Warren Buffett · Investing · 2 min read

It's not IQ. Not grades. Not looks. The qualities that make someone worth investing in are all self-made.

Key Points

The qualities that predict success are character traits, not intelligence or talent.
Integrity, honesty, and generosity are all self-selected. You choose them.
The person you'd short-sell is the one with character flaws, not low grades.
Habits formed young become chains too heavy to break later.

We look for three things when we hire people: intelligence, energy, and integrity. If they don't have the last one, the first two will kill you.

The 10% Thought Experiment

Warren Buffett poses a question to every class he speaks to. Pick one classmate. You get 10% of their lifetime earnings. You have 24 hours to decide. Who do you pick?

You can't pick the one with the richest dad. It has to be on merit. And here's what's interesting: you wouldn't pick the person with the highest grades.

The person worth 10% of isn't the smartest. It's the one with the best character.

The Qualities Are All Self-Made

Think about what makes you choose someone. Integrity. Honesty. Generosity. Willingness to do more than their share. None of these are genetic. None are about height, speed, or looks.

Every quality that predicts big success is a choice. You can develop all of them. Right now. Today.

Every trait that predicts success is something you choose, not something you're born with.

Now Short-Sell Someone

Here's the fun part. You also have to pick someone to short. You pay 10% of what they earn. Who do you pick?

It's not the person with the lowest GPA. It's the person with character problems. Claims credit for things they didn't do. Cuts corners. Can't be counted on. Those habits are the real predictors of failure.

You'd short the person who cuts corners and claims false credit. Not the person with bad grades.

Intelligence Plus Energy Minus Integrity Equals Disaster

Buffett hires for three things. Intelligence. Energy. Integrity. If someone has the first two but not the third, you're in trouble.

If you're going to get somebody without integrity, you want them lazy and dumb. You don't want them smart and energetic.

If they don't have integrity, the first two will kill you. You want them lazy and dumb.

The Chains of Habit

Someone once told Buffett: the chains of habit are too light to be felt until they're too heavy to be broken. He sees it all the time. People at 50 or 60 with self-destructive habit patterns they really can't change. They're imprisoned by them.

But students aren't trapped yet. The qualities on the buy list? All learnable. The qualities on the short list? All fixable. The time to form the right habits is now.

Bad habits feel weightless at 20. By 50, they're chains you can't break.

Be the Person You'd Buy 10% Of

Ben Franklin did this exercise as a teenager. So did Ben Graham, Buffett's mentor. They looked around and asked: who do I admire? Why? Then they decided to become that person.

The goal isn't complicated. At the end of your life, be the person you would have chosen to invest in. That's achievable for everyone.

The ultimate goal: become the person you'd buy 10% of.