Although more of an investment guru than a management guru, Warren Buffett (born 1930) made his billions (and became the second richest man in the world after Bill Gates) from the success of the companies held by his investment vehicle, Berkshire Hathaway, a publicly quoted company. He has described the extent of his involvement in these companies as being limited to the allocation of capital and people. “Charles T. Munger, Berkshire Hathaway's vice-chairman, and I really have only two jobs,” he once said (Charles T. Munger being his long-time closest associate). “One is to attract and keep outstanding managers to run our various operations. The other is capital allocation.” That includes setting the compensation of the chief executive.

Buffett is known as “the Sage of Omaha”, after the town where he was born and where he has spent most of his life, and much is made of his small-town homespun values. He likes to play the ukulele and he plays bridge (with Bill Gates, among others) in his modest home in Omaha. His one conceit is a corporate jet, but that is second-hand and named “The Indefensible”.

Buffett, however, is not really the small-town boy made good. His father, Howard Buffett, was a stockbroker who won a seat in Congress when Warren was a boy, and the family moved to Washington, DC, for a while. Then Buffett went to the Wharton School in Philadelphia, the top business school in the United States for finance and for those heading for the higher reaches of Wall Street. He left before he completed his course, but finished his studies at New York's almost equally prestigious Columbia Business School. From there, in 1951, he started to make his living from investing on the stockmarket, and was greatly influenced by Ben Graham, who wrote a classic book on investment, “Security Analysis” (1934), and had been his tutor at Columbia.

As a group lemmings have a rotten image. But no individual lemming has ever received a bad press.

Buffett famously avoided the high-tech sector during the turn-of-the-century dotcom boom and bust, but in recent years he has suffered from a high involvement with the less-than-stellar insurance industry. Berkshire Hathaway's annual report contains a closely observed “letter to shareholders”, written by Buffett, which is a mixture of homespun wisdom and market savvy. The company's annual meeting is held in the Q-West centre in downtown Omaha and is attended by as many as 20,000 investors from all over the world. “We have embraced the 21st century,” wrote Buffett in one of his letters, “by entering such cutting-edge industries as bricks, carpets, insulation and paint—try to control your excitement.”

In June 2006 he gave Berkshire Hathaway shares worth over $30 billion to the Bill and Melinda Gates Foundation, the biggest single charitable donation in history.

More management gurus

This profile is adapted from “The Economist Guide to Management Ideas and Gurus”, by Tim Hindle (Profile Books; 322 pages; £20). The guide has the low-down on more than 50 of the world's most influential management thinkers past and present and over 100 of the most influential business-management ideas. To buy this book, please visit our online shop.