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