Power Point: Be a healthy skeptic

April 14, 2009, 3:33 AM UTC

“When I call Charlie with an idea, and he says, ‘That is really a dumb idea,’ that means we should put 100% of our net worth into it. If he says, ‘That is the dumbest thing I’ve ever heard,’ then you should put 50% of your net worth into it. Only if he says, ‘I’m going to have you committed,’ does it mean he really doesn’t like the idea.”

–Berkshire Hathaway CEO Warren Buffett in Marc Gunther’s cover story in the April 27 issue of Fortune. According to Buffett, his investing partner Charlie Munger is a committed skeptic. So when Munger suggested investing in an electric car company called BYD, Buffet figured it had to be a good pick. The story explains why Buffett is banking on this obscure Chinese car company and a CEO who drinks his own battery fluid.–Jessica Shambora