Warren Buffett explains why a good business is one 'your idiot nephew' could run

pulse

May 5, 2017 11:54 AM

Investing in a company simply based on its leadership might not be the best strategy, according to Warren Buffett.

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Well-educated, high profile CEOs sometimes become synonymous with their companies.

When asked by the FCIC what attracted him to the management of Moody's — the credit ratings agency that was at the center of the mortgage-backed securities debacle — when he made his initial investment, Buffett responded:

He said something more or less the same in the case of Moody'seven went as far as calling them a "natural duopoly to some extent," since both basically became the standard for regulators.

Tellingly, when asked whether he had ever pressed for the election of any board member, Buffett responded: "If I thought they needed me, I wouldn't have bought the stock."

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