know what they don't know

Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett, the seventh richest person in the world according to the Bloomberg Billionaires Index, will release his widely anticipated annual shareholder letter on Saturday, revealing his thoughts on the state of the company and the outlook for the stock market, among other topics.

The letter may even include some of the Oracle of Omaha's characteristic nuggets of wisdom.

In a new interview, billionaire Thomas Tull — who runs a holding company called Tulco modeled in part after Buffett's — described just such a piece of advice from Buffett that shifted his approach to investment decisions. At a meeting in Buffett's office in Omaha, the legendary investor shared the lesson during a two-hour conversation, which Tull said he'll "treasure for the rest of my life." The lesson involved an approach taken by Buffett and his longtime business partner, Charlie Munger.

"There was a moment," Tull says. "Where I was describing and talking through the business model [of Tulco] and how I thought about something."

"I said, 'What we're trying to do is be smart about,' and [Buffett] stopped me and said, 'I gotta be honest, for years, Charlie and I have always asked, 'What's the dumb thing we could do here?'"

"I kind of laughed, and he said, 'No, I'm dead serious. We always ask. We don't want to be in the clever pile. What what could we do here that would be the dumb thing, and how do we avoid it?'" Tull says. "Honestly, it actually has had a fair amount of impact on the way that I assess and think about situations."

Since 2017, Tull has led Tulco, a holding company that helps businesses in various sectors improve through the deployment of artificial intelligence and other technical advances. He did not specify when the conversation with Buffett took place. For his part, Buffett has been generous with dispensing his investment advice through the years — advising young investors to understand accounting and to know what they don't know.

'He's incredibly sharp'

In recent years, Buffett has said that traditional institutions that provide expertise — such as colleges and business schools — aren’t necessary for professional success.

Buffett attended The Wharton School at the University of Pennsylvania for two years, then transferred to the University of Nebraska, where he earned an undergraduate degree in business administration. He later received a master’s degree in economics from Columbia University.

Since 1965, Buffett has run Berkshire Hathaway, which owns over 60 companies, like Geico and Dairy Queen, plus minority stakes in Apple (AAPL) and Coca-Cola (KO), among others. He holds a net worth of $92.6 billion as of 5 p.m. on Thursday, according to Forbes; and he has vowed to give away nearly all of it.

Tull voiced respect for Buffett and Munger, and he said that Tulco has applied aspects of the investment model developed by Berkshire Hathaway.

"Certainly, I would never put anything in the same paragraph with Mr. Munger and Mr. Buffett," Tull says. "But just to me, what I like about it is it's not a fund, it's permanent capital."

"It allows us maximum flexibility on what to do with the companies to make sure they have the capital that they need, certainly providing hopefully some business acumen and then the tech side, but it just allows us a lot of flexibility."

Tull spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

Raised by single mother in upstate New York near the Pennsylvania border, Tull became a fan of the Pittsburgh Steelers — a team he now part owns. He previously served as Chairman and CEO of the film production company Legendary Entertainment, creating blockbuster movies like "Godzilla" and "Jurassic World."

Speaking with Yahoo Finance, Tull praised the mental acuity of Buffett, who is 90 years old; and Tull said he likely will never forget the conversation he held with Buffett.

"He's incredibly sharp," Tull says. "It's something again, that I bet I'll treasure forever."

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