A social psychology expert reveals Warren Buffett’s persuasion techniques. What Warren Buffett knows, you should know too.
6 October, AtoZForex —Robert Cialdini, a prestigious Psychology and Marketing professor has published his new book “Pre-Suasion: A Revolutionary Way to Influence and Persuade”. The social psychology expert speaks about the genius-investor and the CEO of Berkshire Hathaway Warren Buffet, revealing what Warren Buffett’s persuasion techniques that each trader should know.
Mr. Cialdini has analyzed the shareholder letters that were written by Warren Buffet in the last 50 years. As a result, he has discovered a number of techniques that Buffett uses to gain shareholder’s trust. Many see Warren Buffett as the best investor in the world. With a net worth of $66.4 billion dollars, he steered many companies to success during his career such as Berkshire Hathaway Inc.
Warren Buffet's persuasion practices during shareholder meetings
Cialdini doesn’t only write bestselling books, he also conducts a lot of research on various other topics. For the Warren Buffer related content, he went through the Berkshire Hathaway’s activities archives, such as the reports and shareholder letters. He concluded that Warren Buffet owes his exceptionally good persuasion skills to some basic techniques, which any person who wants to become a better persuader can learn.
One of the techniques used by the historic investor is to present first the weaknesses of an account, followed by showing the strengths. In doing so will make the person whom you are trying to convince more open minded and considerate. Mr. Cialdini believes that this honesty and transparency make a leader appear more trustworthy in the eyes of the rest.
See also: $2 Million Birthday Present for Warren Buffet
The other technique comprises the special convention of the speech. In his reports to shareholders, Warren Buffet would describe the performance in the very beginning of the paper. In the past, when Berkshire Hathaway was experiencing issues, Buffet was not afraid to present the losses to the reader of the report. Instead, he was mentioning the ways in which the current problem could be addressed. What Warren Buffett knows is that the technique was showing the credibility of the company in the best way possible.
How Warren Buffett turns skeptics into believers
In 2015 Buffett was confronted with a difficult situation, when shareholders were losing trust in Berkshire Hathaway. Warren Buffett though that this situation needs special treatment and has addressed the concerns by presenting the so-called “The next 50 years at Berkshire.”
In this Golden Anniversary letter, Warren Buffet addressed the readers as a part of his “family”, which certainly provided him with a lot of trust from the shareholders. The honesty comes first in this case, as the concept “I am of you” makes people trust the person and feel united. These are just some of techniques that the genius-investor utilises. No wonder, many consider Warren Buffett as an idol, from whom investors and traders can learn lots of useful techniques.
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