Due Diligence, Buffett Style

For those big, powerful and wise enough, the latest trend in due diligence strategy is… don’t bother.

Last week Warren Buffett addressed MBA students at IMD, the Swiss business school. He was there to talk about a deal he struck two years ago where Berkshire Hathaway paid $4bn for 80% of Iscar, a metal tools manufacturer.

Mr Buffett admitted that he never bothered with due diligence except where there were environmental concerns.

He said that he could tell within minutes of talks commencing if a deal was going to occur. “The deal should be so obvious to you. If you have to carry the calculation out to five decimal places, like pi, it can’t be a good deal”.

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This entry was posted on Tuesday, May 27th, 2008 at 2:02 pm and is filed under Due Diligence. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.