Overstock.com CEO Patrick Byrne on Oracle of Omaha.

Question: Who are today’s business leaders?

Patrick Byrne:I think Buffet and Munger. And you know Munger doesn’t get enough . . . Munger has great things to teach. Buffet is, of course . . . Buffet is first and there is no second, really. Buffet is . . . isn’t just a businessman. He’s a guy who figured out the way the world works and yet he capitalized on it. But his great business success is a demonstration of a philosophy that he developed or was taught . . . or actually was taught and then he took farther. So I think really Buffet is the great . . . is the great business teacher. And he would say Munger is his philosopher and his private philosopher who taught him a bunch of things. But there were . . . They come at things from actually quite different angles. But Buffet and Munger.

Question: What does Warren Buffet teach you?

Patrick Byrne:In business it’s this. And I remember him telling me something when I was 13, and him saying, “Look you . . . I’m gonna tell you something that you ought to get in five minutes or you won’t ever get in all your life.” I was all eager, ready to learn some formula, and he says, “Look. You buy a share of stock if and only if you would buy it even if the market were shutting down for 10 years tomorrow. Would you still buy that share of stock?” And by running it through that mental filter, you stop thinking of it as this piece of paper that you’re trying to buy at an uptick. And you think of it as a slice of a company. You’re getting a slice all the way through the company. And is that a slice . . . Would you want to own a chunk of that company for the next 10 years? So that goes for both stock investing; but also when you run a company, you run it as if there was no public market. You don’t worry about the public market. You focus on building the real intrinsic value, and that value should get expressed over time.

Recorded on: 10/29/07