Buffett’s metaphors grab the reader’s attention and reduce complexity to a short sentence.
Take a page from the Warren Buffett’s annual letter to improve your communication style.
Analysts and Berkshire Hathaway shareholders look forward to reading Warren Buffett’s annual letter for its wit, wisdom, and insights. I enjoy it because I can always count on Buffett, a life-long student of communication, to use metaphorical references to explain complex financial topics. Once again, Buffett didn’t disappoint in his 2017 annual letter released on Saturday.
Buffett is frequently asked why 90% of his investments are made in the U.S. He answers in metaphor: “America’s economic soil remains fertile.” Buffett’s explanation could fill books, but in five words a metaphor allows him to communicate complexity, simply. And that’s the beauty of metaphor.
A metaphor is a literary device by which we describe one thing in terms of another, replacing the meaning of one word with another. Aristotle promoted the use of metaphor as an element of persuasion more than 2,000 years ago in his work called The Rhetoric. Buffett is a big fan of the technique because it still works. We are hardwired to process our world in metaphor. In a few short words, an appropriate metaphor can teach us volumes about an event or situation.
For example, in his 2017 letter, Buffett repeated his advice to invest for the long term and cautioned investors against borrowing money to buy stocks. “No one can tell you when these [big declines] will happen. The light can at any time go from green to red without pausing at yellow.” You don’t need to be an expert in the stock market to get a sense of how fast things can change. Anyone who’s been in a car gets it instantly.
Buffett is also known for unexpected metaphors and analogies. Buffett’s metaphors grab the reader’s attention and reduce complexity to a short sentence.
In his 2017 letter, Buffett addressed the few acquisitions his company made during the year. He said it was difficult to find stand-alone businesses with all of the qualities he looks for: competitive strength, capable management, good returns, and, most importantly, a sensible purchase price. Prices were simply too high to justify deals, he said. Next came a quip in the form of an analogy.
Metaphors and analogies do, indeed, make the complex simple to understand. The human brain doesn’t do well with abstractions. Take a page from the Warren Buffett’s annual letter to improve your communication style.