Programming Advice from Warren Buffett

Gary Berkowitz

Editor’s Note: The views and opinions of this article do not necessarily reflect those of the MAB. Contact the MAB for information on the MAB’s official editorial policy.

By: Gary Berkowitz
Berkowitz Broadcast Consulting

Well, kind of. I recently read an interview with “The Oracle of Omaha,” arguably one of the savviest investors of all time, Warren Buffett. While reading through his interview, it occurred to me that many of his points could easily be applied to radio, so here’s my drill down on what he said about investing and how it applies to radio programming.

When Berkshire Hathaway CEO Warren Buffett makes investing decisions, he focuses on one thing only: the facts. He says your opinions and emotions aren’t likely to help you.

WB: “Being contrarian has no special virtue over being a trend follower,” Buffett says. Instead, the Oracle of Omaha suggests taking a pragmatic approach to investing decisions. First, gather all your facts. Next, learn how to dissect them to find the pertinent information you need to make your decision. For Buffett, that means looking for the pieces that are “important and knowable.”

Radio Translation: If you know me, you know that I always say “I would much rather argue the facts than the opinions.” When making programming decisions, gather up the right information and facts. Example: Your GM comes in and says, “Everybody I know hates a song we’re playing.” Opinion, yes. Fact: If the music test says it’s great, play it. Or: “A listener called to say we play the same song over and over.” Chances are, when you look it up, the facts say you’re not, but that listener most likely just does not like that song.

WB: “If something’s important but unknowable, forget it,” he says. “I mean, it may be important whether somebody’s going to drop a nuclear weapon tomorrow, but it’s unknowable.”

Radio Translation: You don’t know what is going to happen in your market or station. Always be the best you can be today and be prepared for market changes, but do not act on them until necessary. 99% of the time, these things do not happen.

WB: Whether or not you choose to invest in something should be based on your research, not on your reaction to what other people are doing and saying. As Buffett puts it, “what others are doing means nothing. Concentrate on the facts, not how you’re feeling.”

Radio Translation: Forget about “what you hear” in the market. More often than not, it’s gossip that is not accurate.

WB: “Don’t watch the market closely,” he told CNBC amid wild fluctuations. “If they’re trying to buy and sell stocks and worry when they go down a little bit … and think they should maybe sell them when they go up, they’re not going to have very good results.”

Radio Translation: Worry about your station, not your competitor. More often (almost always) listeners are not sitting around with a “scorecard” on you and other stations. They don’t compare.

WB: Though it’s tempting to sell when the market begins to drop, giving in to your fear is not a sound strategy. “You cannot possibly succeed that way, you’ve got to do the opposite. It’s when you’re not scared you probably want to sell, and when you are scared, you probably want to buy.” Even when the market it tumultuous, it’s helpful to tune out other investors and concentrate on what you know.

Radio Translation: Research and facts can and will guide you in a tumultuous market, and most of them (markets) are tumultuous today. Use your research like a pilot uses radar. My son, Michael, is a Captain with Spirit Airlines. I once asked him what happens when he is in the clouds and can’t see a foot in front of himself. His reply: “In bad weather, a pilot trusts and uses his instruments.” In radio, we should treat our research like “instruments”. Trust it and let it guide us properly.

Gary Berkowitz is President of Detroit based Berkowitz Broadcast Consulting, specializing in ratings improvement for AC radio stations. www.garyberk.com

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