Warren Edward Buffett is an American investor, industrialist one of the most successful investors in the world .This financial wizard is by recent estimates, worth $46 billion but how he got there is the fascinating story. He was ranked as the world's wealthiest person in 2008 and is the third wealthiest person in the world as of 2011.
Warren Edward Buffett was born on August 30, 1930 to his father Howard, a stockbroker. he was the second of three children, and displayed an amazing aptitude for both money and business at a very early age. Acquaintances recount his uncanny ability to calculate columns of numbers off the top of his head - a feat Warren still amazes business colleagues with today. Warren Buffett is a man who has made millions but he also started working at his father's brokerage when he was 11 years old, that's an age when most other kids were playing hide-n-seek ,From small beginnings come bigger things and so after selling gum, soft drinks and working with his father, by age 14, he had bought a 40 acres farm in Washington, Thurston County.
Buffett began his education at Rose Hill Elementary School in Omaha. In 1947, a seventeen year old Warren Buffett graduated from High School. It was never his intention to go to college His father had other plans, and urged his son to attend the Wharton Business School at the University of Pennsylvania. . He was finally persuaded to apply to Harvard Business School, which, in the worst admission decision in history, rejected him as "too young". Then he graduated from Woodrow Wilson High School in 1947, where his SR yearbook picture read: "likes math; a future stock broker."By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.
Buffett entered college as a freshmen in 1947 at the Wharton Business School of the University of Pennsylvania and studied there for two years from 1947 to 1949. In the year 1950, when he entered his junior year, he transferred to the University of Nebraska–Lincoln where at the age of nineteen, he graduated with a degree of Bachelor of Science in Business Administration. After the completion of his undergraduate studies, Buffett enrolled at Columbia Business School after learning that Benjamin Graham (author of "The Intelligent Investor" - one of his favorite books on investing) and David Dodd, two well-known securities analysts, taught there. He received a M.S. in Economics from Columbia Business School in 1951. Buffett also attended the New York Institute of Finance. The Intelligent Investor, which Warren celebrates as "the greatest book on investing ever written", introduced the world to Mr. Market - the best investment analogy in history.
The first stock he bought was "Citi Service preferred stock. I had three shares and made all of $5 on it. I had bought it at $38.25 and then I sold it around $40, it went down to $27 in between and after I sold it at $40, it went to $200!"
From that poorly timed stock sale in 1944, he learnt a lesson that became his legendary investment strategy - which is essentially - patience pays, so buy them and hold them. He figured out two other critical things about himself in the 1940s - what he is good at and what he likes to do.
In April 1952, Buffett discovered Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett's life-long friend and a lasting influence and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes.Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha.Over the next 12 years, Buffett turned a $105,000 into $26 million - a stunning 24,000 per cent increase! He had invested mostly in textile companies, farm equipment manufacturers and even a company making windmills.But what's the secret gift he's got? How does he pick the right investments all the time? He explains, "I look for something that I can understand to start with, there are all kinds of businesses I don't understand."
"I don't understand what car companies are going to do 10 years from now, or what software or chemical companies are going to win/do ten years from now but I do understand that Snickers bars will be the number one candy company in the US - like its been for 40 years. So, I look for durable competitive advantage and that is hard to find. I look for an honest and able management and I look for the price I'm going to pay."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. Buffett merged all partnerships into one partnership. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share. In 1965, when Buffett's partnerships aggressively began purchasing Berkshire, 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 the board meeting and named a new president, Ken Chace, to run the company. In 1966, Buffett closed the partnership to new money. In 1970, as chairman of Berkshire Hathaway, 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. In 1979, Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.In 1998, Berkshire acquired Dairy Queen and Geico in January, Net Jets in August and General Re Corp in December. In April of 2002, Fruit of the Loom and most recently Buffett is looking abroad for new business.Recently, he bought 80 per cent of the Israeli Metal Works Company and he did it without even seeing it. He was approached by the promoter via a letter and what was in that letter convinced him that 'this was the kind of the person I wanted to do business with and it is the kind of business we wanted to own.' How does this 'daring bit of investment fit in with his usual careful way of investing?
He explains, "I had to size up the business but that's a background of being in stocks. If you put your whole net worth in stocks when you are 20-21 years old - you have not visited the businesses but you are really analyzing their financials, you are trying to assess whether they have durable competitive advantage, assess the quality of the management and the integrity of the management and then you try to figure out whether you are buying it at a reasonable price and that's it, that is all we do."His own style remains the same - he lives in the same house for 48 years, carries no cellphone, has no computer on his office desk, does not move around with an entourage.
As he puts it, "I have had everything I wanted all my life. At 20, I was having the time of my life doing what I did. Today, I'm eating the same things I always eat - burghers, fries and cherry coke. Only my clothes are more expensive now but they look cheap when I put them on!"Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share.[28] In 1998, he acquired General Re (Gen Re), (in a rare move, for stock). In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsuranceWarren Buffett has also given away $31 billion of his fortune to the Bill & Melinda Gates Foundation and he 'hopes it will accomplish just what they have set out to accomplish.
Warren Edward Buffett was born on August 30, 1930 to his father Howard, a stockbroker. he was the second of three children, and displayed an amazing aptitude for both money and business at a very early age. Acquaintances recount his uncanny ability to calculate columns of numbers off the top of his head - a feat Warren still amazes business colleagues with today. Warren Buffett is a man who has made millions but he also started working at his father's brokerage when he was 11 years old, that's an age when most other kids were playing hide-n-seek ,From small beginnings come bigger things and so after selling gum, soft drinks and working with his father, by age 14, he had bought a 40 acres farm in Washington, Thurston County.
Buffett began his education at Rose Hill Elementary School in Omaha. In 1947, a seventeen year old Warren Buffett graduated from High School. It was never his intention to go to college His father had other plans, and urged his son to attend the Wharton Business School at the University of Pennsylvania. . He was finally persuaded to apply to Harvard Business School, which, in the worst admission decision in history, rejected him as "too young". Then he graduated from Woodrow Wilson High School in 1947, where his SR yearbook picture read: "likes math; a future stock broker."By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.
Buffett entered college as a freshmen in 1947 at the Wharton Business School of the University of Pennsylvania and studied there for two years from 1947 to 1949. In the year 1950, when he entered his junior year, he transferred to the University of Nebraska–Lincoln where at the age of nineteen, he graduated with a degree of Bachelor of Science in Business Administration. After the completion of his undergraduate studies, Buffett enrolled at Columbia Business School after learning that Benjamin Graham (author of "The Intelligent Investor" - one of his favorite books on investing) and David Dodd, two well-known securities analysts, taught there. He received a M.S. in Economics from Columbia Business School in 1951. Buffett also attended the New York Institute of Finance. The Intelligent Investor, which Warren celebrates as "the greatest book on investing ever written", introduced the world to Mr. Market - the best investment analogy in history.
The first stock he bought was "Citi Service preferred stock. I had three shares and made all of $5 on it. I had bought it at $38.25 and then I sold it around $40, it went down to $27 in between and after I sold it at $40, it went to $200!"
From that poorly timed stock sale in 1944, he learnt a lesson that became his legendary investment strategy - which is essentially - patience pays, so buy them and hold them. He figured out two other critical things about himself in the 1940s - what he is good at and what he likes to do.
In April 1952, Buffett discovered Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett's life-long friend and a lasting influence and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes.Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha.Over the next 12 years, Buffett turned a $105,000 into $26 million - a stunning 24,000 per cent increase! He had invested mostly in textile companies, farm equipment manufacturers and even a company making windmills.But what's the secret gift he's got? How does he pick the right investments all the time? He explains, "I look for something that I can understand to start with, there are all kinds of businesses I don't understand."
"I don't understand what car companies are going to do 10 years from now, or what software or chemical companies are going to win/do ten years from now but I do understand that Snickers bars will be the number one candy company in the US - like its been for 40 years. So, I look for durable competitive advantage and that is hard to find. I look for an honest and able management and I look for the price I'm going to pay."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. Buffett merged all partnerships into one partnership. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share. In 1965, when Buffett's partnerships aggressively began purchasing Berkshire, 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 the board meeting and named a new president, Ken Chace, to run the company. In 1966, Buffett closed the partnership to new money. In 1970, as chairman of Berkshire Hathaway, 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. In 1979, Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.In 1998, Berkshire acquired Dairy Queen and Geico in January, Net Jets in August and General Re Corp in December. In April of 2002, Fruit of the Loom and most recently Buffett is looking abroad for new business.Recently, he bought 80 per cent of the Israeli Metal Works Company and he did it without even seeing it. He was approached by the promoter via a letter and what was in that letter convinced him that 'this was the kind of the person I wanted to do business with and it is the kind of business we wanted to own.' How does this 'daring bit of investment fit in with his usual careful way of investing?
He explains, "I had to size up the business but that's a background of being in stocks. If you put your whole net worth in stocks when you are 20-21 years old - you have not visited the businesses but you are really analyzing their financials, you are trying to assess whether they have durable competitive advantage, assess the quality of the management and the integrity of the management and then you try to figure out whether you are buying it at a reasonable price and that's it, that is all we do."His own style remains the same - he lives in the same house for 48 years, carries no cellphone, has no computer on his office desk, does not move around with an entourage.
As he puts it, "I have had everything I wanted all my life. At 20, I was having the time of my life doing what I did. Today, I'm eating the same things I always eat - burghers, fries and cherry coke. Only my clothes are more expensive now but they look cheap when I put them on!"Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share.[28] In 1998, he acquired General Re (Gen Re), (in a rare move, for stock). In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsuranceWarren Buffett has also given away $31 billion of his fortune to the Bill & Melinda Gates Foundation and he 'hopes it will accomplish just what they have set out to accomplish.
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