Warren Buffett Says 'I Never Look At Where A Candidate Has Gone To School' And Believes A 'Large Portion' Of Business Talent Is Natural

The “Oracle of Omaha” Warren Buffet came from humble beginnings. So perhaps it’s not a shocking revelation that pedigree means little to him when it comes to business potential, he says in his latest shareholder letter earlier this year.

Long revered as required reading for investors, Buffett’s annual letter to Berkshire Hathaway shareholders delivered yet another insightful lesson. This year’s edition included a compelling argument that raw business talent often outweighs formal education. He cited examples from his career, including that of Pete Liegl, the late founder of Forest River, an RV manufacturer Berkshire acquired in 2005.

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Buffett first learned about Forest River in June 2005 when a liaison wrote to him, highlighting the company’s financials. He explained that Liegl wanted to sell to Berkshire and named his price upfront. “I liked this no-nonsense approach,” Buffett wrote. A week later, Liegl and Buffett met in Omaha, where Liegl made it clear he sought financial security for his family but intended to keep running the business himself.

The negotiation that followed was simple. Buffett accepted Liegl’s valuation of additional real estate assets without demanding an appraisal. And when it came time to discuss salary, Liegl delivered a response that floored Buffet. “‘Well, I looked at Berkshire’s proxy statement and I wouldn’t want to make more than my boss, so pay me $100,000 per year,’” he recalled.

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But Liegl paired his humility with shrewdness. He also requested a 10% bonus on earnings above Forest River’s current performance, and Buffett accepted. Over the next 19 years, Liegl, who passed away last November at 80, “shot the lights out,” Buffett wrote, consistently outperforming every competitor in the RV industry. All without the clout of an Ivy League MBA.

Buffett later hammered the point home with his characteristic clarity. “One further point in our CEO selections: I never look at where a candidate has gone to school. Never!” he wrote. He acknowledged that many exceptional leaders emerge from prestigious institutions — he himself went to the University of Pennsylvania’s Wharton School. But was quick to reiterate that Ivy league, or even higher education, is far from a prerequisite for success. In addition to Liegl, he cited the success of Harvard dropout Bill Gates; and Ben Rosner, a “retailing genius” and Berkshire Hathaway executive who built a $44 million company that Buffett acquired, yet never advanced past the sixth grade.