Before starting the body of the blog, let I explain why you should need to peruse this blog, though other websites(including Wikipedia) delivers the factual information. This blog provides you a keen, sequential history of the topic person and to the point, it marks the struggles that the person had came through his life; what had made him/her to overcome the obstacle; achievements made by him & how could the person inspire you. By the way, if it matches of your thinking, the person himself becomes a motivator for you.
Invest in Yourself!
Warren Buffett is an American Investor, business magnate, philanthropist who is well known for investing under his Berkshire Hathaway Inc. Buffett began to cultivate the investor mind at his early age itself when he was inspired by the book “One Thousand Ways to Make $1000”(Author: F.C.Minaker),which he had borrowed from the Omaha Public Library at the age of 7. Buffett’s interest in stock market investing developed when he spent some school days in customer’s lounge of a regional stock brokerage near his father’s own brokerage office. At age 10, he had a chance to visit New York Stock Exchange. At age 11 itself, he bought three shares of Cities Service. This is how, ‘The Life of the most Successful Investor in the World of all time’, starts.
25 POINTS ON WARREN BUFFETT:
- Warren Buffett is the Chairman & CEO of Berkshire Hathaway, an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States. The company wholly owns 11 other companies(including GEICO(Insurer), Duracell(Battery Maker), Dairy Queen(Restaurant chain), NetJets,etc.,) & also owns parts of other notable 7 companies(including 9.4% of Coca-Cola, 6.8% of Bank of America, 5.22% of Apple). He is also known as the founder of Modern era of Berkshire Hathaway.
- At an young age, entrepreneurial mind had made the way for his first ventures as selling chewing gums, Coca-Cola bottles & weekly magazines. At age 15, Buffett made $175 monthly delivering Washington Post at doorstep.
Risk comes from not knowing, what you’re doing!
- Having an investor mind, while pursuing his Master of Science in Columbia, he was inspired by then Investor, Economist & Professor Benjamin Graham. Graham was so influential on Warren that made him to enlarge his economic view & helped to acquire partnerships later with many, amidst Graham as one.
- In 1951, Warren worked as a investment salesman. In 1952, he approached GEICO & made insurance business with the company’s Vice-President Lorimer Davidson at Washington.
- Returning to Omaha, he was confident enough to teach “Investment Principles” night class at University of Nebraska, Omaha, where the students were twice of his age. At the mean time, he purchased a Sinclair Texaco Gas station that became unsuccessful.
- In the same year 1952(at age 22), he got married to Susan Thompson, whom he met as a roommate of his sister Roberta Buffett at Northwestern University.
- In 1954, he made partnership with his inspirer Graham and had a annual return of $12,000(about $114,000 today). The partnership held over 2 years & in 1956 until, Graham retired and closed his partnerships.
- In 1956(at age 26), Warren had his personal savings of $174,000 & started Buffett Partnership LTD(BPL).
- In 1957, Buffett made three partnerships. At this time , he bought a five bedroom stucco house in Omaha, for $31500, where he still lives. Then, in 1959, he increased his partnerships to six. He met his future partner Charlie Munger(who is the Vice President of the Berkshire Hathaway at present).
- In 1962, Buffett Partnership Ltd., earned $7,178,500 of which over $1,025,000 belonged to Buffett. Yes, he became a Millionaire at the age 32.
- In 1962, he invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway. 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. In 1966, Buffett closed the partnership to new money. He later claimed that the textile business had been his worst trade.
- In 1979, 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.
- In 1987, Berkshire Hathaway purchased a 12% stake in Salomon Inc., making it the largest shareholder and Buffett, a director. 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.
- Buffett became a Billionaire in May 29, 1990 at his 60th age, when Berkshire started selling A class shares.
Cash combined with courage, in times of crisis is priceless
- During 2008 financial crisis, Buffett’s suggestion was inevitable that made U.S. Stock markets to construe the crisis. In October 2008, in the midst of the financial crisis, Berkshire Hathaway CEO Warren Buffett made a late-night phone call to then-Treasury Secretary Henry “Hank” Paulson, with an idea about how the government might be able to turn the economy around. At the time, Congress passed a “bailout bill” that came with $700 billion as Troubled Assets Relief Program to purchase assets of failing banks. But it was not enough to calm the investors. Later the night, Buffett insisted to Paulson ,“It might make more sense to put more capital in the banks than it would to try and buy these assets.” The market recovered within a year.
- Buffett made a lucre of about $10 Billion amidst the financial crisis in 2008. The investments made in 2008-2011 on Mars, Goldman Sachs, Bank of America & Dow chemical had gained him $10 Billion and counting. The Oracle of Omaha here proved his investing art & made lemonade with the market shutdown.
- Buffett became the Richest person in the world with the total net worth of $62 billion in 2008 & was succeeded by Bill Gates in 2009.
- Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes (due to their source as dividends and capital gains), while his employees paid 33% of theirs, despite making much less money. Buffett considered this unfair. After Donald Trump accused him of taking “massive deductions,” Buffett countered, “I have copies of all 72 of my returns and none uses a carry-forward.”
- Warren & Susan Buffett began to live separately from 1977 although married. In October 2003, Susan was diagnosed with oral cancer. Warren took care of her every weekend until her recovery & the couple contributed $6 million to five Californian doctors for the study of oral cancer. Later, Susan died at the age of 72 in 2004 suffering from cerebral hemorrhage. Warren was so grief-stricken that he did not attend his wife’s funeral. Warren then married Astrid Menks in 2006 at his 76th birthday, who was his longtime companion.
If you can’t control your emotions, you can’t control your money!
- In December 2006, it was reported that Buffett did not carry a mobile phone, did not have a computer at his desk, and drove his own automobile, a Cadillac DTS. In 2013 he had an old Nokia flip phone and had sent one email in his entire life.
- Buffett reads five newspapers every day, beginning with the Omaha World Herald, which his company acquired in 2011.
- He’s promised to give away over 99% of his fortune. In 2019 he donated $3.6 billion, much of it to the foundation of friends Bill and Melinda Gates.
- On April 11, 2012, Buffett was diagnosed with stage I prostate cancer during a routine test.
- Apart from investing & business, Warren is a good story teller, joke cracker at times and avid bridge player.
- Interviewer asked Warren Buffett how to become a better investor. He pointed to a stack of annual reports. “Read 500 pages like this every day”, he said. “That’s how knowledge works. It builds up like compound interest. All of you can do it, but I guarantee not many of you will do it”.
Warren was also an economic advisor during Obama’s period of President-ship. Barack Obama in 2011, proposed a tax plan named “Buffett Rule”, stating that the plan would apply a minimum tax rate of 30% on individuals making more than one million dollars a year. Been known as “The Oracle of Omaha”, Warren excels in his investing knowledge and skill. Reading 500 pages or five newspapers daily may seem crazy but, consistency over time had made him worth $89 Billion person. In fact, if you would notice as well, he hardly worked as physically until he conquered 6 partnerships in his BPL; But his mental activeness, knowledge & skill had carved him so. He didn’t work for money; The money worked for him. As riches say, “Work until you earn money while you are sleeping”, he deserves as to be the best example.