2013: How does Buffett pick priorities?

AUDIENCE MEMBER: Hi. My name is Alex [Banayan], and I’m from Los Angeles.

Mr. Buffett, I’ve heard that one of your ways of focusing your energy is that you write down the 25 things you want to achieve, choose the top 5, and then avoid the bottom 20.

I’m really curious how you came up with this, and what other methods you have to prioritizing your desires?

WARREN BUFFETT: Well, I’m actually more curious about how you came up with it, because — (laughter) — it really isn’t the case.

It sounds like a very good method of operating, but it’s much more disciplined than I actually am. (Laughter)

If they stick fudge down in front of me, I eat it, you know, I’m not thinking about 25 other choices. (Applause)

So I don’t mean to —you know, Charlie and I live very simple lives. We know what we do enjoy, and we now have the option of doing it, pretty much.

Charlie likes to design buildings. I mean, he’s not—he’s no longer a frustrated architect — he’s a full-fledged architect now. And, you know — and we both like to read a lot.

But we — I’ve never made lists. I can’t recall making a list in my life, but maybe I’ll start.

You’ve given me an idea. Thank you.

Charlie?

CHARLIE MUNGER: Well, what’s really interesting on the subject of Warren’s operating methods, you can see happening here.

We didn’t know, when we started out, this modern psychological evidence to the effect that you shouldn’t make a lot of important decisions when you’re tired and that making a lot of difficult decisions is tiring.

And we didn’t also know, as well as we now do, how helpful it is to be consuming caffeine and sugar when you’re making important decisions. (Laughter)

And what happens, of course, is that both Warren and I live entirely on autopilot, in terms of the ordinary decisions in life, which is totally habitual, so we don’t work — waste — any decision making industry — I mean energy — on that stuff, and we’re ingesting caffeine and sugar.

And, it turns out, under the modern evidence, this is an ideal way to sit where Warren sits. And he didn’t know that, he just stumbled into it. (Laughter)

WARREN BUFFETT: When we write our book on nutrition, it promises to be a huge seller. (Laughter)

CHARLIE MUNGER: I cannot remember an important decision that Warren has made when he was tired.

He’s never tired. (Laughter)

He sleeps soundly, and he doesn’t waste time thinking about what he’s going to eat. As you say, he just eats what he’s always eaten.

You know, his style turns out to be absolutely ideal for human cognition. (Laughter)

It looks peculiar, but he stumbled into something very good.

WARREN BUFFETT: You can write the forward to my next book. OK. (Laughter)