Three Qualities of People

Buffett three qualities principle puts integrity first, then intelligence and energy. Intelligence and drive multiply impact, but without integrity they multiply damage. For investors, management character is not a soft factor. It directly shapes capital allocation discipline, reporting honesty, and the reliability of long term compounding.

Financial performance can be built slowly and destroyed quickly when trust breaks. Investors who ignore integrity risk governance failures, accounting surprises, and value destructive decisions that look rational only in the short term. Over full cycles, weak character at the top often creates downside that no valuation model fully captures in advance.

Evaluate behavior history, not presentation quality. Check how leaders communicate bad years, treat minority owners, and allocate retained cash over time. Prefer managers who are candid under pressure and consistent across cycles. If integrity red flags appear, exit discipline should come before valuation debate, because governance risk can overwhelm all other assumptions.