Warren Edward Buffett (born August 30, 1930) is an American investor, businessman, and philanthropist. He is one of the most successful investors in history, the primary shareholder and CEO of Berkshire Hathaway.

Buffett is called the “Oracle of Omaha” or the “Sage of Omaha” and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. Buffett is also a notable philanthropist, having pledged to give away 85 percent of his fortune to the Gates Foundation. He also serves as a member of the board of trustees at Grinnell College.

Investment Philosophy
To summarize his investment philosophy

~ Buy good business at a good price.
~ Buy a business, not a stock.
~ Buy a business in a position to consistently return equity holders 20% or more a year.
~ Buy a business that’s easy to understand and not too difficult to predict.
~ Buy when others are fearful, sell when others are greedy.
~ His current holdings include Coca Cola, Wells Fargo, Procter & Gamble, American Express and other steady, large cap stocks. In third quarter of 2009, he cut his positions in Moody and ConocoPhilips, while added Walmart and Nestle.

Wealth
In 2008, Buffett became the richest man in the world dethroning Bill Gates, worth $62 billion according to Forbes, and $58 billion according to Yahoo. Bill Gates had been number one on the Forbes list for 13 consecutive years. March 11, 2009, Bill Gates regained number one of the list according to Forbes magazine, with Buffett second. Their values have dropped to $40 billion and $37 billion respectively, Buffett having (according to Forbes) lost $25 billion in 12 months during 2008/2009.

Recognition
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.

2 of the Best Biographies written on him >>
i. Buffett, Making of an American Capitalist
ii. The Snowball: Warren Buffett and the Business of Life

The Best Book written on his Investment Philosophy >>
The Warren Buffett Way

His Early Life
Buffett was born in Omaha, Nebraska, the only son of Leila (née Stahl) and businessman/politician Howard Buffett, and second of three children. He worked at his grandfather’s grocery store. In 1943, Buffett filed his first income tax return, deducting his bicycle and watch as a work expense for $35 for his work as newspaper delivery boy. After his father was elected to Congress, Buffett was educated at Woodrow Wilson High School, Washington, D.C. In 1945, in his freshman year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.

Buffett first enrolled at The Wharton School, University of Pennsylvania, (1947–49) where he joined the Alpha Sigma Phi fraternity. His father and uncles were Alpha Sigma Phi brothers from the chapter in Nebraska. In 1950, he transferred to the University of Nebraska where he received a B.S. in Economics.

Buffett then enrolled at Columbia Business School after learning that Benjamin Graham, (the author of The Intelligent Investor), and David Dodd, two well-known securities analysts, taught there. He then received a M.S. in Economics from Columbia University in 1951.

In Buffett’s own words:
“I’m 15 percent Fisher and 85 percent Benjamin Graham.
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.”

Path to Wealth
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 discovered 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. 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 — Hochschild, Kohn and Co, a privately owned Baltimore department store. In 1967, Berkshire paid out its first and only dividend of 10 cents. In 1969, following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway. 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 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation.

In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

In 2008, Buffett became the richest man in the world dethroning Bill Gates, worth $62 billion according to Forbes, and $58 billion according to Yahoo. Bill Gates had been number one on the Forbes list for 13 consecutive years. March 11, 2009, Bill Gates regained number one of the list according to Forbes magazine, with Buffett second. Their values have dropped to $40 billion and $37 billion respectively, Buffett having (according to Forbes) lost $25 billion in 12 months during 2008/2009.

Investment in China
Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary on Berkshire Hathaway’s website stating why he would not divest from the company despite calls from some activists to do so, due to its connection with the Sudanese genocide that caused Harvard to divest from the company in 2005. He did, however, sell this stake soon afterwards, sparing him the billions of dollars he would have lost had he held on to the company in the midst of the steep drop in oil prices beginning in the summer of 2008.

In October 2008, Buffett invested in new energy automobile business by paying $230 million for 10% of BYD Company(SEHK: 1211), which runs a subsidiary of electric automobile manufacturer BYD Auto. In less than one year, the investment has reaped him over 500% return of profit.

Books on his biographies & investment philosophy:

2 of the Best Biographies written on him >>
i. Buffett, Making of an American Capitalist
ii. The Snowball: Warren Buffett and the Business of Life

The Best Book written on his Investment Philosophy >>
The Warren Buffett Way

(Main Source of this article: Wikipedia)

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