Warren Buffett is the second wealthiest man in America. His company’s stock is worth tens of thousands.

But he said the most valuable business experience in his life was a paper route he ran as a child.

That’s where he learned about working with people.

“You have to understand people to do well in business,” he said.

Buffett spoke to an audience of about 750 students, faculty and administrators at Van Meter Auditorium yesterday afternoon.

He came as part of the Hays Watkins Visiting CEO Professors program.

Buffett is the chief executive officer and chairman of Berkshire Hathaway Inc., a holding company that owns several different business subsidiaries in manufacturing, retailing and service companies.

Buffett, who was born in 1930 in Omaha, Neb., is worth $36 billion, making him the wealthiest man next to Microsoft founder Bill Gates.

He talked to the audience about the importance of good people in business. He said it was more important to invest in themselves than a stock.

“Whatever you’re doing now in terms of maximizing the value of your mind and the longevity of your body is what is going to determine where you are 20, 30, 40 years (from now),” Buffett said.

He told the story of how Berkshire Hathaway bought Fruit of the Loom, a Bowling Green-based business that was near bankruptcy.

He said he did not want to change the finances or the operations. He wanted to change the management.

He asked John Holland, the company’s current chief operating officer, to run the company.

He said Holland’s management helped improve the business.

“The key is people,” he said. “There really is no more dramatic illustration of that than Fruit of the Loom.

“It went from being a horrible mismanaged group to being magnificently managed company. That’s the reason you have a very prosperous company in this area.”

Buffett’s remarks about Holland, who was sitting in the audience, prompted the audience to applaud.

Not going by the rules

Indudeep Chhachhi, chair of the accounting and finance department, said Buffett places a lot of weight on who is at the company.

“He’s a real big fan of good managers who have a proven track record,” he said. “He buys or invests those companies knowing that people who run these companies can do a good job.”

Chhachhi said Buffett’s investment practices are simple. He usually only buys a company’s stock if it has good management, if he fully understands the nature of the company and if the company makes “economic sense” or has a constant market.

That criteria has led him to buy stock from companies like Coca-Cola and Gillette, the shaving company.

His investment practices are quite different from those on Wall Street.

Buffett avoided technology stocks while most investors were chasing them in the 1990s.

He was heavily criticized by the financial community at the time.

But it appears Buffett was right.

Although he didn’t make as much money then, he knew the technology stocks were overpriced, Chhachhi said.

Chhachhi said Buffett was thinking of the future.

“Warren Buffet has a long term focus,” he said. “He’s in there for the long haul. Wall Street is constantly – I’m overgeneralizing a little bit – is quite often chasing the next trend. They want to make sure that this month they are making money. They don’t have the patience to wait it out.”

Buffett’s patience has worked in the long run – his company’s stock was selling at $75,600 per share on Wednesday.

But he’s not flaunting his wealth. While some companies give CEO compensation packages in the millions, Buffett salary is $300,000 a year.

He lives in Omaha, Neb., in a house that he bought for $31,000.

“He has this appeal to me and many students because he’s, quote unquote, a regular guy,” Chhachhi said.

He said he always mentioned Buffett in his business classes and know other faculty in the Gordon Ford College of Business who have motioned him as well.

“All we can do as faculty is to talk about people like Warren Buffett,” he said. “We can show by proof, that the points we make can be carried out in the real world and one can be successful in following these principles.”

Go for the love of business, not the money

After Buffett made his initial remarks, seven business majors had the chance to ask him questions.

In answering one of them, Buffett encouraged students to work for a company or business they loved rather than how much money they could earn.

“We look for people that have a passion for business; that love jumping out of bed in the morning,” Buffett said.

Students who attended the speech said they enjoyed it.

Eddyville freshman Adam Wadlington said he thought Buffett was funny and was informative.

“I’m not a business major, but I could find myself relating to him a lot,” he said. “I was more informed about the business world today.”

Scottsville junior Jeff Felcher said he liked how Buffett talked more about what he thought rather than how he runs his business.

“Taking his insight on how to deal with things can transcend to different types of companies,” he said.

Reach Mai Hoang at [email protected]