Warren Buffett? Peter Lynch?
Dear Quote Investigator: In 2008 I read an interview with the super-investor Warren Buffett in which he said you should put your money into a company that can be run by an idiot because eventually it will be run by an idiot. But that advice sounded familiar to me. Did someone offer this recommendation before Buffett?
Quote Investigator: You are correct that similar advice antedates the 2008 comment from Buffett; however, Buffett was not asserting originality. He credited the idea to a generic speaker identified as: “they”.
Here is an excerpt from a 2008 May 20 story from the Associated Press [BUF]:
“They say in the stock market, ‘Buy into a business that’s doing so well an idiot could run it, because sooner or later, one will,'” Buffett said.
Although Buffett is not specific in his attribution the words can be traced to an individual. Peter Lynch was a stock market wunderkind of the 1980s who managed a fund called Fidelity Magellan and achieved a remarkable annual return of close to 30 percent. In his bestselling 1989 book “One Up On Wall Street” Lynch said:
Getting the story on a company is a lot easier if you understand the basic business. That’s why I’d rather invest in panty hose than in communications satellites, or in motel chains than in fiber optics. The simpler it is, the better I like it. When somebody says, “Any idiot could run this joint,” that’s a plus as far as I’m concerned, because sooner or later any idiot probably is going to be running it.
This passage of text is not easy to use as a compact quotation since Lynch is commenting on the words of an anonymous “somebody”. But there is another self-contained version from Peter Lynch that appears in the newspaper USA Today in 1989 [PL2]:
Lynch visited USA TODAY last week and talked about where amateur investors most often go wrong when they invest in individual stocks. … “Go for a business that any idiot can run – because sooner or later any idiot probably is going to be running it.”
So the questioner may have read or heard the advice of Lynch and that is why it sounded familiar. Thanks for the question.
[BUF] 2008 May 20, Star-Herald, Buffett says he prefers a Democrat for president, Page 7A, Scottsbluff/Gering, Nebraska. (NewspaperArchive)
[PL1] 1989, One Up On Wall Street by Peter Lynch with John Rothchild, Chapter 8, Simon and Schuster, New York. (Text checked with Amazon Look Inside: First Fireside Edition 2000, Page 130)
[PL2] 1989 March 7, USA Today, “Track Companies, Not Markets [FINAL Edition]”, Page 04.B, McLean, Virginia. (ProQuest National Newspapers)