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What Warren Buffett taught Alex Rodriguez about investing

·3 min read
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Alex Rodriguez is on a winning streak. The former New York Yankees slugger filed to raise $500 million for a SPAC, launched a venture capital firm, and took an ownership stake in the Minnesota Timberwolves — all since February. 

But his financial education goes back decades, including a series of conversations over steak and a milkshake with Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett. The Oracle of Omaha used a baseball analogy to communicate his key rules for investing, Rodriguez tells Yahoo Finance in a new interview.

The two met more than 20 years ago, after Buffett agreed to insure Rodriguez's then-record $252 million contract with the Texas Rangers. Rodriguez cold-called Buffett's office, and Buffett invited him out to Omaha, Rodriguez said.

Buffett, a longtime baseball fan, taught Rodriguez the basics of investing with a reference to Hall of Fame Red Sox Outfielder Ted Williams, one of the best hitters in the history of the sport.

"He talks investing, just like Ted Williams talked about discipline at the plate," Rodriguez says. 

"Stay away from the edges. When you get a fat pitch to hit, don't go for a single or double — but hit a grand slam," Rodriguez adds. 

Since 1965, Buffett has built textile company Berkshire Hathaway into a giant holding company, along the way popularizing the strategy of “value investing,” which identifies stocks trading at a price lower than their book value, and patiently waits for them to rise.

In addition to an investing tutorial, Rodriguez received a firsthand demonstration of the hospitality and kindness that have become trademarks of Buffett's approach to dealmaking.

"He invited me down to Omaha, and that started a streak of about half a dozen years where I will go every year and visit with him," Rodriguez says. "We will meet for two or three hours at his office, and then we'll go and have dinner and have a steak." 

"Because he was insuring me, he would always like touch my bicep and go you better be ready to go this year," he adds. "Showing me I don't want to lose your any of my money — and I made sure that his investment was good with me." 

"At the end of every dinner, he always made me drink one of the big ice cream sundaes," he says.

Sep 27, 2021; Minneapolis, MN, USA; Limited partner and alt-governor for the Minnesota Timberwolves Alex Rodriguez answers questions during a press conference at media day. Mandatory Credit: Bruce Kluckhohn-USA TODAY Sports
Sep 27, 2021; Minneapolis, MN, USA; Limited partner and alt-governor for the Minnesota Timberwolves Alex Rodriguez answers questions during a press conference at media day. Mandatory Credit: Bruce Kluckhohn-USA TODAY Sports

Rodriguez, who retired from baseball in 2016, leads A-Rod Corp., an investment firm with stakes in real estate and venture capital. 

Recently, he launched a venture capital fund called Vision/Capital/People and became a part-owner of the NBA's Minnesota Timberwolves and the WNBA's Minnesota Lynx. Those projects emerged from a partnership with e-commerce billionaire Marc Lore.

Speaking to Yahoo Finance, Rodriguez described a commonality between his partnership with Lore and the decades-long partnership between Buffett and Berkshire Hathaway Vice Chairman Charlie Munger.

"We're handshake people, a lot like Warren and Charlie Munger," Rodriguez says. "We both are gritty. And we both really respect and enjoy working with people."

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