[su_spacer size=”13″]First off, congratulations to the Cleveland Cavs for winning the NBA Finals on Sunday night. It would be hard to imagine a more exciting Game 7 (and I think we were definitely owed an exciting game after a postseason that featured blow out after blow out).
Warren Buffett probably enjoyed the game too.
Even though Buffett has no real connection to the city of Cleveland, he was probably rooting for the Cavs to win. Here’s why:
Warren Buffett is good friends with Quicken Loans founder and Cleveland Cavs majority owner Dan Gilbert. In 2012, Gilbert agreed to join Buffett’s Giving Pledge, pledging to donate most of his wealth to charity.
In 2014, Buffett’s Berkshire Hathaway sponsored and insured Quicken Loans’ “Billion Dollar Bracket Challenge,” which offered a chance to become a billionaire to anyone who could predict all 64 winners for the NCAA Division I Men’s Basketball Tournament (the odds of predicting a perfect bracket are somewhere between 1 in 4.3 billion and 1 in 9.2 quintilian, depending on who’s doing the counting).
The ties between Buffett and Gilbert are also business related.
Just last month, Buffett offered to be a potential financing partner to support Gilbert’s bid to acquire Yahoo. Buffett:
“I’m an enormous admirer of Dan and what he has accomplished in Quicken Loans. Yahoo is not the type of thing I’d ever be an equity partner in. I don’t know the business and wouldn’t know how to evaluate it, but if Dan needed financing, with proper terms and protections, we would be a possible financing help.”
Buffett, through Berkshire, previously provided financing to investment firm 3G Capital for its takeovers of Heinz and Kraft.
Additionally, Berkshire subsidiary Vanderbilt Mortgage Finance Inc. (which provides financing for customers of other Berkshire subsidiary Clayton Homes) buys traditional home mortgages from only a few institutions – one of which is Gilbert’s Quicken Loans.
Warren Buffet is also friends with NBA superstar LeBron James and has been something of a money mentor to him.
In an interview with NBA TV, Buffett described LeBron as “remarkably mature,” being “plenty smart about financial matters,” and saying “I was impressed with him right from the moment I met him.”
As far as LeBron’s business sense, Buffett continued pouring on the accolades. He said, “LeBron’s not really talkative, he’s savvy,” continuing with, “he talked smarter about business deals than plenty of MBAs I’ve met … when I talked with him first, he was 21 then… He knew a lot more than I did when I was 21.”
Buffett has also given LeBron James some very specific financial pointers (which apply to everyone!):
“Through the rest of his career and beyond, in terms of earning power, [he should] just make monthly investments in the low-cost index fund. Somebody in his position ought to have a significant cash reserve.
Athletes generally tend to get promoted by people with restaurants and real estate. Everybody’s got an idea for him and, usually, the simplest is the best.”
Buffett also said LeBron James should invest primarily in American companies:
“Owning the United States at a decent average price bought over time, you really can’t go wrong with that.”
Although LeBron’s a 3x NBA champion, 3x NBA Finals MVP, 4x regular season MVP, and 12x NBA All-Star, he is definitely the starstruck one between the two:
“I sent an e-mail about this to Warren Buffett. I’m a kid from Akron who lived in poverty for a long time, and I sometimes send financial statements to one of the richest guys ever. It’s kind of scary. I’m like, ‘Why is he talking to me?’”
What about LeBron James coaching Buffett on the basketball court? Buffett once joked:
“We went up for a jump ball one time and he got it, went the length of the court [and] dunked it just as I was starting to jump.”