Buffett's Equation
A writer was commenting on how Warren Buffett was a principled man, and that his values translated in business success.
What struck me was Buffett’s adaptation of Einstein’s equation for the theory of relativity,
e=mc2 (squared).
For Buffett, the success of a business can be predicted from this equation, with changes to what the variables stand for.
E = earnings, the lifeblood of a business.
M = management capability.
C = character of the management. Squared.
The emphasis was on “C squared". No matter how skilled the management of a company is, the character of the business leaders is even more important for long-term success.
