It is interesting why smart people go astray.

I have seen all sorts of people with terrific IQs that end up flopping in Wall Street or business. They have 500 horsepower engines and get 50 horsepowers out of them. Or worse, they have their foot on the brake and the accelerator at the same time.

One of the things you will find, which is interesting and which people do not think of enough, with most businesses and with most individuals, life tends to snap at you at your weakest link.

So it is not the strongest link you are looking for among individuals in the room. It is not even the average strength of the chain. It is the weakest link that causes the problem.

It may be alcohol, gambling…it may be a lot of things; it may be nothing which is terrific. But it is a real weakest-link problem.

When I look at our managers, I am not trying to look at the guy who wakes up at night and says e=mc2 or something.

I am looking for people that function very, very well. And that means not having any weak links.

The 2 biggest weak links in my experience: I have seen more people fail because of liquor and leverage—leverage being borrowed money.

You really do not need much leverage in this world. If you are smart, you are going to make a lot of money without borrowing. I have never borrowed a significant amount of money in my life. Never will. I have got no interest in it.

The other reason is I never thought I would be way happier when I had 2x instead of x. You ought to have a good time all the time as you go along. If you say, “I’m taking this job…I do not really like this job but in 3 years it will lead to this”, forget it. Find one you like right now.

Excerpted from a lecture by Warren Buffett at Notre Dame University in 1991. Source: http://www.tilsonfunds.com/BuffettNotreDame.pdf