Born Warren Edward Buffett
August 30, 1930 (age 83)
Omaha, Nebraska, U.S.
Nationality United States
Education Master of Science in Economics
Spouse(s) Susan Thompson Buffett (m. 1952–2004)
Children Susan Alice Buffett
Howard Graham Buffett
Peter Andrew Buffett
Warren
Edward Buffett (born August 30, 1930) is an American business magnate,
investor, and philanthropist. He is widely considered the most successful
investor of the 20th century. Buffett is the chairman, CEO and largest
shareholder of Berkshire Hathaway and consistently ranked among the world's
wealthiest people.
He
was ranked as the world's wealthiest person in 2008 and as the third wealthiest
person in 2011. In 2012, American magazine Time named Buffett one of the most
influential people in the world.
Buffett
is called the "Wizard of Omaha", "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 99 percent of his
fortune to philanthropic causes, primarily via the Gates Foundation. On April
11, 2012, he was diagnosed with prostate cancer, for which he completed
treatment in September 2012.
Early life:
Buffett
was born in 1930 in Omaha, Nebraska, the second of three children and only son
of U.S. Representative Howard Buffett, a fierce critic of the interventionist
New Deal domestic and foreign policy, and his wife Leila. Buffett's DNA report
revealed that his paternal ancestors hail from northern Scandinavia, while his
maternal ancestors hail from Iberia (present-day Spain) or Estonia. It's been
also reported that Warren is not related to Jimmy Buffett despite the same
surname. Buffett began his education at Rose Hill Elementary School in Omaha.
In 1942, his father was elected to the first of four terms in the United States
Congress, and after moving with his family to Washington, D.C., Warren finished
elementary school, attended Alice Deal Junior High School, and graduated from
Woodrow Wilson High School in 1947, where his senior yearbook picture reads:
"likes math; a future stockbroker".
Even
as a child, Buffett displayed an interest in making and saving money. He went
door to door selling chewing gum, Coca-Cola, or weekly magazines. For a while,
he worked in his grandfather's grocery store. While still in high school he was
successful in making money by delivering newspapers, selling golfballs and
stamps, and detailing cars, among other means. Filing his first income tax
return in 1944, Buffett took a $35 deduction for the use of his bicycle and
watch on his paper route. In 1945, in his sophomore year of high school,
Buffett and a friend spent $25 to purchase a used pinball machine, which they
placed in the local barber shop. Within months, they owned several machines in
different barber shops.
Buffett's
interest in the stock market and investing also dated to his childhood, to the
days he spent in the customers' lounge of a regional stock brokerage near the
office of his father's own brokerage company. On a trip to New York City at the
age of ten, he made a point to visit the New York Stock Exchange. At the age of
11, he bought three shares of Cities Service Preferred for himself, and three
for his sister. While in high school he invested in a business owned by his
father and bought a farm worked by a tenant farmer.
Buffett
entered college as a freshman in 1947 at the Wharton School of the University
of Pennsylvania. He studied there for two years and joined the Alpha Sigma Phi
fraternity. 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 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 earned a Master of Science in economics
from Columbia in 1951. Buffett also attended the New York Institute of Finance.
In Buffett's own words.
Warren Buffett’s - 15 Most Memorable Quotes
Investor
and philanthropist Warren Buffett is considered to be one of the most
successful businessmen of the 20th century. Here are a few of his pieces of
advice on investment.
1. Rule No. 1: never
lose money; rule No. 2: don’t forget rule No. 1.
2. The stock market is
a no-called-strike game. You don’t have to swing at everything — you can wait
for your pitch. The problem when you’re a money manager is that your fans keep
yelling, ‘Swing, you bum!’.
3. Long ago, Ben
Graham taught me that ‘Price is what you pay; value is what you get.’ Whether
we’re talking about socks or stocks, I like buying quality merchandise when it
is marked down.
4. Wall Street is the
only place that people ride to in a Rolls-Royce to get advice from those who
take the subway.
5. The line separating
investment and speculation, which is never bright and clear, becomes blurred
still further when most market participants have recently enjoyed triumphs.
Nothing sedates rationality like large doses of effortless money. After a heady
experience of that kind, normally sensible people drift into behavior akin to
that of Cinderella at the ball. They know that overstaying the festivities - that is, continuing to speculate in companies that have gigantic valuations
relative to the cash they are likely to generate in the future - will eventually
bring on pumpkins and mice. But they nevertheless hate to miss a single minute
of what is one helluva party. Therefore, the giddy participants all plan to
leave just seconds before midnight. There’s a problem, though: They are dancing
in a room in which the clocks have no hands.
6. You don’t need to
be a rocket scientist. Investing is not a game where the guy with the 160 IQ
beats the guy with 130 IQ.
7. You only find out
who is swimming naked when the tide goes out.
8. When we own
portions of outstanding businesses with outstanding managements, our favorite
holding period is forever.
9. Our approach is
very much profiting from lack of change rather than from change. With Wrigley
chewing gum, it’s lack of change that appeals to me. I don’t think it is going
to be hurt by the Internet. That’s the kind of business I like.
10. Time is the friend
of the wonderful business, the enemy of the mediocre.
11. The best thing that
happens to us is when a great company gets into temporary trouble… We want to
buy them when they’re on the operating table.
12. I have pledged — to
you, the rating agencies and myself -– to always run Berkshire with more ample
cash. We never want to count on the kindness of strangers in order to meet
tomorrow’s obligations. When forced to choose, I will not trade even a night’s
sleep for the chance of extra profits.
13. I try to buy stock
in businesses that are so wonderful that an idiot can run them. Because sooner
or later, one will.
14. Over the long term,
the stock market news will be good. In the 20th century, the United States
endured tow world wars and other traumatic and expensive military conflicts;
the Depression; a dozen or so recessions and financial panics; oil shocks; a
fly epidemic; and the resignation of a disgraced president. Yet the Dow rose
from 66 to 11,497.
15. It’s far better to
buy a wonderful company at a fair price than a fair company at a wonderful
price.
Warren Buffett's - 10 Ways to Get Rich
1. Reinvest Your
Profits:
When you first make money in the stock market, you may be tempted to spend it.
Don't. Instead, reinvest the profits. Warren Buffett learned this early on. In
high school, he and a pal bought a pinball machine to put in a barbershop. With
the money they earned, they bought more machines until they had eight in
different shops. When the friends sold the venture, Warren Buffett used the
proceeds to buy stocks and to start another small business. By age 26, he'd
amassed $174,000 -- or $1.4 million in today's money. Even a small sum can turn
into great wealth.
2. Be Willing To Be
Different:
Don't base your decisions upon what everyone is saying or doing. When Warren
Buffett began managing money in 1956 with $100,000 cobbled together from a
handful of investors, he was dubbed an oddball. He worked in Omaha, not Wall
Street, and he refused to tell his parents where he was putting their money.
People predicted that he'd fail, but when he closed his partnership 14 years
later, it was worth more than $100 million. Instead of following the crowd, he
looked for undervalued investments and ended up vastly beating the market
average every single year. To Warren Buffett, the average is just that -- what
everybody else is doing. to be above average, you need to measure yourself by
what he calls the Inner Scorecard, judging yourself by your own standards and
not the world's.
3. Never Suck Your
Thumb:
Gather in advance any information you need to make a decision, and ask a friend
or relative to make sure that you stick to a deadline. Warren Buffett prides
himself on swiftly making up his mind and acting on it. He calls any
unnecessary sitting and thinking "thumb sucking." When people offer
him a business or an investment, he says, "I won't talk unless they bring
me a price." He gives them an answer on the spot.
4. Spell Out The Deal
Before You Start:
Your bargaining leverage is always greatest before you begin a job -- that's
when you have something to offer that the other party wants. Warren Buffett learned
this lesson the hard way as a kid, when his grandfather Ernest hired him and a
friend to dig out the family grocery store after a blizzard. The boys spent
five hours shovelling until they could barely straighten their frozen hands.
Afterward, his grandfather gave the pair less than 90 cents to split. Warren
Buffett was horrified that he performed such backbreaking work only to earn
pennies an hour. Always nail down the specifics of a deal in advance -- even
with your friends and relatives.
5. Watch Small
Expenses:
Warren Buffett invests in businesses run by managers who obsess over the
tiniest costs. He one acquired a company whose owner counted the sheets in
rolls of 500-sheet toilet paper to see if he was being cheated (he was). He
also admired a friend who painted only on the side of his office building that
faced the road. Exercising vigilance over every expense can make your profits
-- and your paycheck -- go much further.
6. Limit What You
Borrow:
Living on credit cards and loans won't make you rich. Warren Buffett has never
borrowed a significant amount -- not to invest, not for a mortgage. He has
gotten many heart-rendering letters from people who thought their borrowing was
manageable but became overwhelmed by debt. His advice: Negotiate with creditors
to pay what you can. Then, when you're debt-free, work on saving some money
that you can use to invest.
7. Be Persistent: With tenacity and
ingenuity, you can win against a more established competitor. Warren Buffett
acquired the Nebraska Furniture Mart in 1983 because he liked the way its
founder, Rose Blumkin, did business. A Russian immigrant, she built the mart
from a pawnshop into the largest furniture store in North America. Her strategy
was to undersell the big shots, and she was a merciless negotiator. To Warren
Buffett, Rose embodied the unwavering courage that makes a winner out of an
underdog.
8. Know When To Quit: Once, when Warren
Buffett was a teen, he went to the racetrack. He bet on a race and lost. To
recoup his funds, he bet on another race. He lost again, leaving him with close
to nothing. He felt sick -- he had squandered nearly a week's earnings. Warren
Buffett never repeated that mistake. Know when to walk away from a loss, and
don't let anxiety fool you into trying again.
9. Assess The Risk: In 1995, the
employer of Warren Buffett's son, Howie, was accused by the FBI of
price-fixing. Warren Buffett advised Howie to imagine the worst-and-bast-case
scenarios if he stayed with the company. His son quickly realized that the risks
of staying far outweighed any potential gains, and he quit the next day. Asking
yourself "and then what?" can help you see all of the possible
consequences when you're struggling to make a decision -- and can guide you to
the smartest choice.
10. Know What Success
Really Means:
Despite his wealth, Warren Buffett does not measure success by dollars. In
2006, he pledged to give away almost his entire fortune to charities, primarily
the Bill and Melinda Gates Foundation. He's adamant about not funding monuments
to himself -- no Warren Buffett buildings or halls. "I know people who
have a lot of money," he says, "and they get testimonial dinners and
hospital wings named after them. But the truth is that nobody in the world
loves them. When you get to my age, you'll measure your success in life by how
many of the people you want to have love you, actually do love you. That's the
ultimate test of how you've lived your life."
