warren-buffett-net-worth

Warren Buffet Net Worth

Warren Buffett is an American investor, business tycoon, and philanthropist. Known as the “Oracle of Omaha,” Buffett is best known for his strict adherence to value investing and frugality despite his immense wealth. Warren Buffet owns an investment firm, Berkshire Hathaway. He owns 238,624 Class A shares which give him control over the company. His stake in the company is valued at over $100 billion.

Early life

Buffet’s career as an investor started early.

At the tender age of 11, he purchased six shares of preferred stock in Cities Service for $38 a share.

Buffett split the purchase down the middle, with himself and sister Doris owning three shares each.

Shares in the public utility company briefly fell to $27 before rebounding to $40. Warren and Doris then sold for a profit, but not before the share price went to $200.

Buffett supplemented his income with a car detailing business, a paper/magazine route, and a soft drink stand.

He also purchased 40 acres of land for $1,200 which he then rented for a profit.

College education

Pressured by his father, Buffett put his entrepreneurial flair to one side for a moment and enrolled at the Wharton School of the University of Pennsylvania in 1947.

He then transferred to the University of Nebraska, earned a Bachelor of Science in business administration, and subsequently enrolled at Columbia university after he was rejected from Harvard.

At Columbia, Buffett was instructed and mentored by Benjamin Graham, the so-called father of value investing.

Upon learning that Graham was on the board of GEICO insurance, Buffet took a train to the company’s headquarters on a Saturday morning.

Once let in, he questioned executive Lorimer Dawson about the company for four hours.

Based on this discussion, Buffett invested around $13,000 in GEICO and today owns the company in its entirety. 

Buffet and Graham

After graduating from Columbia, Buffett was dissuaded from working on Wall Street by both his father and Graham.

He then offers to work for Graham for free but is rebuffed. 

Working as a stockbroker, he attended one of Dale Carnegie’s public speaking courses and started to teach a night class called “Investment Principles” at the University of Nebraska. Buffet was only 21 at the time and most of his students were twice his age.

Three years later, in 1954, Graham offered Buffett a job at his investment firm Graham-Newman Corp.

In 1956, Graham retired and folded his company while Buffett founded Buffett Associates Ltd. and a further four investment partnerships before the end of 1957.

Berkshire Hathaway

In 1962, Buffett merged his partnerships into one entity and started aggressively purchasing shares in a textile manufacturing company called Berkshire Hathaway.

Now a millionaire, he took control of the company at a board meeting, fired the owner, and moved the business into the insurance sector. In 1970, Buffett started writing his annual letter to shareholders.

Charlie Munger – whom Buffett met in 1959 after both were invited to dinner by a local Omaha businessman – became chairman of Berkshire Hathaway in 1978. By 1979, Buffett was worth around $140 million but continued to live on his $50,000 per annum salary.

Value investing

Buffett has adapted Graham’s original value investing philosophy to now possess a net worth that exceeds $100 billion.

Buffett likes to hold stock from undervalued and well-managed companies indefinitely, with Gillette, American Express, and Coca-Cola some of the stalwarts of Berkshire’s portfolio.

Some companies, such as GEICO, Dairy Queen, and Fruit of the Loom, have been purchased outright by the billionaire but given the autonomy to manage their day-to-day operations.

Key takeaways

  • Warren Buffett is an American business magnate, philanthropist, and perhaps the most quoted investor of all time. Buffett showed entrepreneurial flair from a young age but was pressured by his father to attend university.
  • At Columbia University, Buffett was instructed and mentored by Benjamin Graham, the so-called father of value investing. In 1954, Graham offered Buffett a job at his investment firm Graham-Newman Corp. Buffett then founded his own investment company in 1956 after Graham retired.
  • Buffett met friend and business partner Charlie Munger at a chance dinner in 1959, with Buffett buying into textile company Berkshire Hathaway in 1962. He eventually took control of the company and moved it into insurance while retaining the name. Since that time, Berkshire Hathaway has embodied Buffett’s value investing philosophy.

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Connected Business Concepts

Value Investing

value-investing
Value investing is a strategy advocating the purchase of stocks that are underappreciated by other investors or the broader market. Value investing was popularised by investor Warren Buffett, but the approach was pioneered by Benjamin Graham and David Dodd at Columbia Business School in the early 1920s. Graham would later go on to release the seminal book The Intelligent Investor in 1949.

Buffet Indicator

buffet-indicator
The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Circle of Competence

circle-of-competence
The circle of competence describes a person’s natural competence in an area that matches their skills and abilities. Beyond this imaginary circle are skills and abilities that a person is naturally less competent at. The concept was popularised by Warren Buffett, who argued that investors should only invest in companies they know and understand. However, the circle of competence applies to any topic and indeed any individual.

Economic Moat

moat
Economic or market moats represent long-term business defensibility. Or how long a business can retain its competitive advantage in the marketplace over the years. Warren Buffet who popularized the term “moat” referred to it as a share of mind, opposite to market share, as such it is the characteristic that all valuable brands have.

Golden Circle

golden-circle
The Golden Circle attempts to explain how certain businesses can inspire others and differentiate themselves in the market. Originally developed by author Simon Sinek, the concept helps businesses identify their purpose and then communicate that purpose to consumers in a meaningful way so that the brand can be highly differentiated in the marketplace.

5 Whys Method

5-whys-method
The 5 Whys method is an interrogative problem-solving technique that seeks to understand cause-and-effect relationships. At its core, the technique is used to identify the root cause of a problem by asking the question of why five times. This might unlock new ways to think about a problem and therefore devise a creative solution to solve it.

First-Principle Thinking

first-principles-thinking
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and any eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

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Elon Musk Net Worth

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Bernard Arnault Net Worth

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Bernard Arnault’s wealth is around $203 billion. Indeed Arnault is the CEO and chairman of the luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton, a massive luxury group that generated over €79 billion in revenue ($83 billion) in 2022, spanning across wines, fashion, cosmetics, and retail. The Arnault family group owns 48.18% of the capital for LVMH with 63.9% voting power, making Bernard Arnault the principal owner and decision-maker. His stake is worth over $203 billion.

Warren Buffet Net Worth

warren-buffett-net-worth
Warren Buffett is an American investor, business tycoon, and philanthropist. Known as the “Oracle of Omaha,” Buffett is best known for his strict adherence to value investing and frugality despite his immense wealth. Warren Buffet owns an investment firm, Berkshire Hathaway. He owns 238,624 Class A shares which gives him control over the company. His stake in the company is valued at over $100 billion.

Jeff Bezos Net Worth

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Eduardo Saverin Net WorthEduardo Saverin Net Worth

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Larry Ellison Net Worth

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Howard Schultz Net Worth

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Francois-Henri Pinault Net Worth

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Pierre Omidyar is a technology entrepreneur andPierre Omidyar is a technology entrepreneur and founder of eBay. As of 2020, before he stepped down from the company’s board of directors, he still owned 4.69% of the company’s stocks, valued at over one billion dollars. Yet, over the years, he sold a good chunk of his stocks, making him a billionaire. founder of eBay. As of 2020, before he stepped down from the company’s board of directors, he still owned 4.69% of the company’s stocks, valued at over one billion dollars. Yet, over the years, he sold a good chunk of his stocks, making him a billionaire.

Marc Benioff Net Worth

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