Warren Buffett: Why Going To Business School Is A Waste Of Time

Going to business school can damage your potential future investment success prospects, according to legendary value investor Warren Buffett. In this video, he gives his perspectives on business schools.

[MrTodayistheday]

I agree with Warren. I have an MBA. I obtained it after working for 18 years. My professors lacked experience. My professors lacked common sense. Warren argues that the problem is in teaching finance. My professors could not assess risk or abate risk. That is a key component in determining price.

[Bob-itse]

My finance lecturers used to spend roughly 2-4 hours explaining a theory to the class before telling us it doesn't actually work and that they really have no idea how assets are priced in the real world. Money well spent.

[Corgiking]

Top schools get you access to higher tier social networks and job opportunities.

That is the main benefit. The social network.

Schooling doesn’t matter as much.

[supersonique]

As a retired stockbroker I can confirm that the worst and stupidest traders/investors were MBAs and finance grads!

[kaixiang]

The business degree is for creating employees, not investors

[pedasijeff]

Most professors have never owned or operated a successful business. Much less worked from the entry level position.

[jeffincanada]

I have owned a business brokerage since 1986. When I started investing outside of my business brokerage, I used the same criteria that I used when valuing a business in my brokerage. I had not learned about Ben Graham or Warren Buffet, but the investing criteria were the same, and they work. When I was trying to hire employees in my brokerage, I had many MBAs apply. I asked them simple questions about business valuation, and to this day I have not found one who understood the basic principals of it.

[benqurayza]

Business schools mostly perform an HR function for the employers. The professors seek academic respectability and tenure.

[WillNGo]

I don't understand how anyone can follow the market for more than a couple of years (or weeks) without realizing Efficient Market Theory is bunk. Completely public information can be interpreted differently by every single person who knows it.
I've had some success. I've known smart rich people, but also more than a few not very smart ones, and not just people who inherited or married it. I like the line from Citizen Kane, "Well, it's no trick to make a lot of money if all you want is to make a lot of money." So as a successful investor, a mediocre school teacher, a sometimes adequate carpenter, I can say, it's much easier to be a successful investor than to be a good carpenter. Takes less work and you can make more mistakes. I've never met any really good carpenters who were idiots.

[JerryStevens]

I don't have a degree. I learned business by doing business. If you can generate sales at a decent margin, you can hire for anything else you need and learn business as you go.

[joelhenderson]

Best line is the last line: whenever you hear a theory described as elegant, watch out!

[ianboard]

Its like going to one of the Ivies - all about belonging to a class and networking opportunities. It's not only about what you learn.

[elmoreglidingclub]

If you’re looking for a transactional career, one where you profit from a series of transactions, yeah, b-school is good for opening doors but not necessary. Some like studying the structure and nature of things and do t care so much for chasing the next transaction and the university is great for them.

[bobfg]

I have to agree with Warren on this one. I've seen former hedge fund managers ignore facts and make claims that were the opposite of what was actually going on.

There's an old saying: those who can't do, teach. For business school and finance that appears to be the truth.

[moyo]

I was a online tutor correcting papers for students. Busyness classes were the dumbest ones ever, each question was one I could have answered in high school.

[zacharycat]

James Simons said he never took a business course. Wall St Journal calls him "the most successful hedge fund manager of all time."

[JohnMinehan-lxts]

"If you are going to live a long time, you need to keep learning."

[davemacdonald]

We were taught how to evaluate a business at Queen's University Executive MBA Class of 2004. Present value of the future cash flows generated by the business at a projected growth rate discounted at chosen interest rate. Granted, a lot of regular MBA schools teach number-crunching and I think this is very much Warren and Charlie's point. Certainly, bad curriculum.

[llcoolmartine]

We all know it's a waste of time. But employers still demand it and they also see that you can accomplish something over a longer time period and you (hopefully) used your brain in doing so.

[jimparsons]

Liked the direct way he speaks. I suspect that the situation is more subtle that one might otherwise expect. In business there are many, huh, "partnerships" with Uncle that one might setup. And as one might expect, there are a number of hoops to jump through to get the uncle prescribed subsidies. So that the objective can become the subsidies and not the end product of the company. I am not an accountant, but in the larger company that I worked in, there were often section meetings where this point was endlessly discussed.