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What Is Warren Buffett's Latest 'Lipstick Rule' All About? - Views on News from Equitymaster

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The Equitymaster Research Digest

What Is Warren Buffett's Latest 'Lipstick Rule' All About?
Jun 10, 2016

  • 'Delight my customer'
  • An important caveat
  • The hunt for delightful companies

If Warren Buffett weren't an investor, he would have made an excellent fiction writer. For a guy whose primary job is to pore through annual reports and financial statements, you will rarely see him dispense investment wisdom using numbers. Fortunately for us, he prefers analogies and anecdotes.

After all, numbers are slippery customers; they don't stick in our brains for long. But turn them into stories or metaphors that evoke strong imagery, and chances are they'll take up permanent residence in our long-term memories.

Take lipstick for example. It evokes strong imagery, doesn't it? That's the language Buffett recently used to drive home an important point.

What's the most important ingredient in building a business? Here's the Oracle in his own words:

  • Tomorrow morning, when you look in the mirror after you've gotten up, just write - put it in lipstick, or whatever you want, on the mirror - just put, 'Delight my customer.

The Big Advantage

With this evocative word - 'lipstick' - Buffett has drilled this mantra into the minds of budding entrepreneurs for a long time to come.

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