Warren Buffett

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Warren Edward Buffett born August 30, 1930 is an American business magnate, investor, and philanthropist who serves as the chairman and CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world often called the Wizard of Omaha and has a net worth of US$80.2 billion as of August 2020, making him the fourth wealthiest person in the world.

Buffett was born in 1930 in Omaha, Nebraska, the second of three children and the only son of Leila and Congressman Howard Buffett. Buffett began his education at Rose Hill Elementary School. In 1942, his father was elected to the first of four terms in the United States Congress, and after moving with his family to Washington, D.C., Warren finished elementary school, attended Alice Deal Junior High School and graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads: “likes math; a future stockbroker.” After finishing high school and finding success with his side entrepreneurial and investment ventures, Buffett wanted to skip college to go directly into business but was overruled by his father.Buffett displayed an interest in business and investing at a young age.

He was inspired by a book he borrowed from the Omaha public library at the age of seven, One Thousand Ways to Make $1000. Much of Buffett’s early childhood years were enlivened with entrepreneurial ventures. In one of his first business ventures Buffett sold chewing gum, Coca-Cola bottles, and weekly magazines door to door. He worked in his grandfather’s grocery store. While still in high school, he made money delivering newspapers, selling golf balls and stamps, and detailing cars, among other means. On his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route. In 1945, as a high school sophomore, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in three different barber shops across Omaha. The business was sold later in the year for $1,200 to a war veteran.

Buffett’s interest in the stock market and investing dated to schoolboy days he spent in the customers’ lounge of a regional stock brokerage near his father’s own brokerage office. On a trip to New York City at age ten, he made a point to visit the New York Stock Exchange. At 11, he bought three shares of Cities Service Preferred for himself, and three for his sister Doris Buffett (founder of The Sunshine Lady Foundation). At the age of 15, Warren made more than $175 monthly delivering Washington Post newspapers. In high school, he invested in a business owned by his father and bought a 40-acre farm worked by a tenant farmer. He bought the land when he was 14 years old with $1,200 of his savings. By the time he finished college, Buffett had accumulated $9,800 in savings (about $101,000 in 2017).

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In 1947, Buffett entered the Wharton School of the University of Pennsylvania. He would have preferred to focus on his business ventures; however, he enrolled due to pressure from his father. Warren studied there for two years and joined the Alpha Sigma Phi fraternity. He then transferred to the University of Nebraska where at 19, he graduated with a Bachelor of Science in Business Administration. After being rejected by Harvard Business School, Buffett enrolled at Columbia Business School of Columbia University upon learning that Benjamin Graham taught there. He earned a Master of Science in Economics from Columbia in 1951. After graduating, Buffett attended the New York Institute of Finance.

“The basic ideas of investing are to look at stocks as business, use the market’s fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham taught us. A hundred years from now they will still be the cornerstones of investing.” — Warren Buffett

Buffett was Influenced by Graham’s 1949 book, The Intelligent Investor. Buffett sold securities for Buffett-Falk & Company for three years, then worked for his mentor for two years as an analyst at Graham-Newman Corp

By the time Buffett was twenty years old (1950) he had a saving of almost ten thousand dollars. Buffet’s first official employment was at Buffet-Falk & Co. as an investment salesman from 1951 to 1954. In 1954 he took a job at Benjamin Graham’s partnership where his initial annual pay was $12, 000 (about $105,000 as at 2012)

Buffett became interested in how a company worked – what made it superior to competitors. Benjamin Graham simply wanted numbers whereas Buffett was predominately interested in a company’s management as a major factor when deciding to invest, Graham looked only at the balance sheet and income statement; he could care less about corporate leadership. In 1956 Benjamin Graham retired and closed his partnership. By this time, Buffett had a large amount of personal savings of about $174,000 (about $1.57 million in 2017) with which he opened Buffett Partnership Ltd., an investment partnership in Omaha.

In 1957, Buffett operated three partnerships. He purchased a five-bedroom stucco house in Omaha which he nicknamed “Buffett’s Folly”, where he still lives, for $31,500. ” Buffett managed his partnerships originally from one of the home’s bedrooms, then later, a small office. In 1958, Buffett’s third child, Peter Andrew, was born. Buffett operated five partnerships that year. In 1959, the company grew to six partnerships and Buffett met future partner Charlie Munger. By 1960, Buffett operated seven partnerships. He asked one of his partners, a doctor, to find ten other doctors willing to invest $10,000 each in his partnership. Eventually eleven agreed, and Buffett pooled their money with a mere $100 original investment of his own.

In 1962, Buffett became a millionaire because of his partnerships, which in January 1962 had an excess of $7,178,500, of which over $1,025,000 belonged to Buffett. He merged these partnerships into one. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway. He began buying shares in Berkshire from Seabury Stanton, the owner, whom he later fired.Buffett’s partnerships began purchasing shares at $7.60 per share. In 1965, when Buffett’s partnerships began purchasing Berkshire aggressively, they paid $14.86 per share while the company had working capital of $19 per share. This did not include the value of fixed assets (factory and equipment). Buffett took control of Berkshire Hathaway at a board meeting and named a new president, Ken Chace, to run the company.

He later claimed that the textile business had been his worst trade. He then moved the business into the insurance sector, and, in 1985, the last of the mills that had been the core business of Berkshire Hathaway was sold. Buffett wrote in his letter: “… unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”

In a second letter, Buffett announced his first investment in a private business â€” Hochschild, Kohn and Co, a privately-owned Baltimore department store. In 1967, Berkshire paid out its first and only dividend of 10 cents. Despite the success of Buffett Partnership, its founder dissolved the firm in 1969 to focus on the development of Berkshire Hathaway. In 1970, Buffett began writing his now-famous annual letters to shareholders. However, he lived solely on his salary of $50,000 per year and his outside investment income.

He phased out its textile manufacturing division, instead expanding the company by buying assets in media (The Washington Post), insurance (GEICO) and oil (Exxon).

In 1973, Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and joined its board. In 1974, the SEC opened a formal investigation into Buffett and Berkshire’s acquisition of Wesco Financial, due to possible conflict of interest. No charges were brought. In 1977, Berkshire indirectly purchased the Buffalo Evening News for $32.5 million. Antitrust charges started, instigated by its rival, the Buffalo Courier-Express. Both papers lost money, until the Courier-Express folded in 1982. In 1979, Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett’s net worth reached $620 million.

In the same year, Berkshire began to acquire stock in ABC. Capital Cities announced a $3.5 billion purchase of ABC on March 18, 1985 surprising the media industry, as ABC was four times bigger than Capital Cities at the time. Buffett helped finance the deal in return for a 25% stake in the combined company. The newly merged company, known as Capital Cities/ABC (or CapCities/ABC), was forced to sell some stations due to U.S. Federal Communications Commission ownership rules. The two companies also owned several radio stations in the same markets.


In 1987, Berkshire Hathaway purchased a 12% stake in Salomon Inc., making it the largest shareholder and Buffett a director. In 1990, a scandal involving John Gutfreund (former CEO of Salomon Brothers) surfaced. A rogue trader, Paul Mozer, was submitting bids in excess of what was allowed by Treasury rules. When this was brought to Gutfreund’s attention, he did not immediately suspend the rogue trader. Gutfreund left the company in August 1991. Buffett became Chairman of Salomon until the crisis passed.

In 1988, Buffett began buying The Coca-Cola Company stock, eventually purchasing up to 7% of the company for $1.02 billion. It would turn out to be one of Berkshire’s most lucrative investments, and one which it still holds. Following Berkshire Hathaway’s significant investment in Coca-Cola, Buffett became director of the company from 1989 until 2006. He has also served as director of Citigroup Global Markets Holdings, Graham Holdings Company and The Gillette Company.

Buffet became a billionaire after he started selling the Class A shares of Berkshire Hathaway in 1990; the market closed at over 7000 dollars per share.

In 2008, Buffett became the richest person in the world, with a total net worth estimated at $62 billion by Forbes and at $58 billion by Yahoo, overtaking Bill Gates, who had been number one on the Forbes list for 13 consecutive years. In 2009, Gates regained the top position on the Forbes list, with Buffett shifted to second place. Both of the men’s values dropped, to $40 billion and $37 billion respectively—according to Forbes, Buffett lost $25 billion over a 12-month period during 2008/2009 He founded The Giving Pledge in 2009 with Bill Gates and Mark Zuckerberg, whereby billionaires pledge to give away at least half of their fortunes.

In November 2011, it was announced that over the course of the previous eight months, Buffett had bought 64 million shares of International Business Machine Corp (IBM) stock, worth around $11 billion. This unanticipated investment raised his stake in the company to around 5.5 percent—the largest stake in IBM alongside that of State Street Global Advisors.  In May 2012 it was reported that Buffet has acquired Media General which is the newspaper owner of 63 newspapers in the US. The company was the second news print purchase made by Buffett in one year.

In 2012 Buffett disclosed that he had been diagnosed with prostate cancer. He began undergoing radiation treatment in July, and successfully completed his treatment in November.

A September 2014, Fast Company article featured Buffett’s “avoid at all cost” practice, used to prioritize personal goals. Buffett advises people to first create a list of the top 25 accomplishments that they would like to complete over the next few years of their life, and to then pick the five most-important list items. Buffett stated that people need to “avoid at all cost” the initial, longer list, as it would hinder the achievement of the top-five.

In 2006, on his 76th birthday, Buffett married his longtime companion, Astrid Menks, who was then 60 years old—she had lived with him since his wife’s departure to San Francisco in 1977. Susan had arranged for the two to meet before she left Omaha to pursue her singing career. Susan briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett’s personal life.

Buffet’s achievements have been acknowledged with several honors. In 1999, Buffett was named the top money manager of the Twentieth Century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among Time’s 100 Most Influential People in the world. Buffet was also termed as the most influential global thinker in the 2010 report of Foreign Policy. He was awarded the Presidential Medal of Freedom by President Barack Obama in 2011.