The speech touches on a number of points, and I've done my best to annotate, but the highlights for an incoming MBA student are:
- The MBA Game (Part 1, starting at 2:20) - you are given the chance to invest 10% into one classmate. Which classmate are you going to pick, the one with highest IQ or best grades? No, you're going to pick "the one you responded to best. The one that has the leadership qualities, the one that can get other people to carry out their interests. That is the person who is generous and honest and gives credit to other people for their own ideas." Which classmate will you sell short?
- Do what you love (Part 2, 9:00) Taking a job because it looks good on your resume is like "saving sex for old age."
- Remember how lucky you are (Part 10, 3:00) Let's assume there are 6 billion people on earth. You are given the chance to exchange your life for the chance at 100 other lives. Would you do it?
2:20 - The MBA Game - Which classmate will you invest in?
7:12 - Investing in Japan
8:25 - Cigar butt approach to investing, i.e. buying stocks valued below working capital
0:10 - Long-Term Capital Management - Berkshire's bid for the imploding hedge fund
4:30 - On the founder's of LTM: "To make the money they did not have and did not need, they risked what they did have and did need. That is foolish."
4:44 - "If you risk something that is important to you for something that is unimportant to you, it just does not make any sense."
5:37 - On leverage - small upside, big downside
6:55 - "Betas don't tell you a damn thing about the risk of stock"
9:18 - "Work in jobs you love. You're out of you mind if you keep taking jobs you don't like because you think they look good on your resume."
9:50 - "Taking a job you don't like is like saving sex for old age."