- LeBron James led the Los Angeles Lakers’ attack to the 17th NBA Championship on Sunday.
- Warren Buffett once pointed to James’ critical role on the basketball court to highlight the lack of diversification as an investor.
- “If you have LeBron James on your team, don’t take him out of the game just to make room for someone else,” said Berkshire Hathaway, a well-known investor and CEO in 2008.
- Buffett also compares James’ return to the Cleveland Cavaliers in 2014 to Coca-Cola’s return to his classic formula.
- Visit the Business Insider homepage for more stories.
LeBron James led the Los Angeles Lakers to a record 17th NBA championship on Sunday night. Warren Buffett, a longtime fan and confidant of the basketball superstar, once used James’ huge contribution to his team to explain the danger of diversification to investors.
“If you have LeBron James on your team, don’t take him out of the game just to make room for someone else,” the billionaire investor and CEO of Berkshire Hathaway told a group of business school students in 2008.
“It’s crazy to invest in your 20th choice, not your first choice,” added Buffett, according to Dang Le, one of the students present.
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Buffett took this approach in Berkshire. Its five largest holdings – Apple, Bank of America, Coca-Cola, American Express and Kraft Heinz – account for more than 75% of about $ 200 billion in its portfolio.
On another occasion, the investor compared James’ return to his home team, the Cleveland Cavaliers, to Coca-Cola’s return to its classic formula.
“He loves Cleveland, Cleveland loves him,” Buffett said in 2014, according to cleveland.com. “In a way, it’s like a new Coca-Cola and an old Coca-Cola.”
“Years ago, they would take away the old Coca-Cola so they could make a new Coca-Cola, and suddenly everyone remembered how much they loved the old Coca-Cola,” he continued. – This is the way.
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Buffett and James first met when the athlete visited Omaha to film a skete for Berkshire’s annual meeting in 2007. Since then, the couple have been mutual fans.
“I am a child from Akron who lived in poverty for a long time and sometimes I send financial statements to one of the richest boys ever,” James told Sports Illustrated in 2012.
“It’s kind of scary,” he continued. “I’m like, ‘Why is he talking to me?’ “
Buffett, meanwhile, praised James’s maturity in an interview with the Miami Herald in 2012 and the player’s “money mind,” or financial understanding, in an interview with USA Today in 2018.