Biography of Ace Investor Warren Buffett
Childhood and Early Life
Buffett's inclination towards numbers and commerce became
evident at an early age. Born in 1930 in Omaha, Nebraska, his natural affinity
for mathematics and a desire to generate income were apparent. During his
formative years, he demonstrated an entrepreneurial streak, engaging in various
enterprises such as selling chewing gum and delivering newspapers.
While attending Alice Deal Junior High School in Washington,
D.C., Buffett's passion for numbers continued to grow. He immersed himself in
books about the stock market during his early teenage years. Remarkably, he
even completed his first tax return at the age of 14, where he claimed a
deduction for his bicycle, which he utilized for his paper route.
Early Entrepreneurial Journey
Buffett's entrepreneurial drive emerged early in his life,
leading him to embark on his first business ventures. One of his earliest
ventures involved selling chewing gum, showcasing his ability to identify
opportunities and his innate business sense. At the tender age of 6, he
purchased gum packs from his grandfather's store and sold them door-to-door in
his neighborhood. By age 13, he took on the responsibility of delivering The
Washington Post in Washington D.C., turning it into a personal challenge. Under
his father's influence, a congressman representing a Nebraska district, Buffett
imbibed a strong work ethic, waking up at 4:30 a.m. to ensure timely delivery to
his route of five buildings.
Buffett's determination extended beyond mere deliveries as
he sought ways to optimize his service. Observing expired magazine
subscriptions along his route, he capitalized on the opportunity to sell new
subscriptions along with calendars, maximizing his earnings. By age 15, his
commitment yielded $2,000 from paper deliveries alone.
A pivotal move came when he invested $1,200 of his earnings
in a 40-acre farm, striking a profit-sharing agreement with a Nebraska farmer.
This early venture highlighted Buffett's foresight and investment savvy.
Remarkably, at just 15 years old, Buffett filed his first
federal income tax return in 1944, with earnings totaling $592.50. This
surpassed the IRS threshold requiring all U.S. citizens, even minors earning
over $500, to file a return. This early display of financial acumen and
responsibility distinguished Buffett from his peers. His disciplined work
approach, keen eye for opportunities, and astute investment decisions laid the
foundation for his extraordinary journey towards becoming one of history's most
successful investors.
Education in an Investment Philosophy
Buffett's college years were pivotal in shaping his
investment philosophy. Initially enrolled at the University of Pennsylvania's
Wharton School, he felt disconnected from its theoretical approach. Seeking a
more practical education, he transferred to the University of Nebraska, where
he earned a Bachelor of Science in Business Administration.
His journey took a significant turn at Columbia Business
School, where he encountered Benjamin Graham, revered as the father of value
investing. Under Graham's mentorship, Buffett found his investment philosophy.
He pursued a Master of Science in Economics at Columbia, immersing himself in
Graham's teachings, which emphasized analyzing a company's intrinsic value and
investing in undervalued stocks for long-term growth.
Simultaneously, Buffett worked as a stockbroker,
accumulating significant savings. He entrusted his funds to Graham's investment
firm, experiencing firsthand the practical application of investment principles.
This early exposure laid the foundation for his future success in the world of
finance.
Early Career : Forging his Investment Empire
After completing his post-graduation, Buffett returned to
Omaha and embarked on various partnerships, most notably establishing Buffett
Partnership Ltd. Here, he continued to apply Graham's principles, showcasing
his exceptional business acumen by delivering remarkable returns for his
partners. These successes further cemented his reputation as a highly skilled
investor.
A pivotal moment arose when Buffett acquired Berkshire
Hathaway, a struggling textile manufacturing company. Despite being outside his
area of expertise, Buffett adeptly redirected Berkshire Hathaway's focus
towards insurance and other investments. He utilized the company's cash flow to
fuel his investment strategies, gradually phasing out its textile operations.
This strategic shift marked a significant turning point in Berkshire Hathaway's
trajectory.
Buffett's investment methodology, characterized by selecting
robust yet undervalued companies with a long-term growth outlook, became his
trademark. His annual letters to Berkshire Hathaway shareholders evolved into a
treasure trove of wisdom, offering invaluable insights into his investment
philosophy, business approach, and understanding of economic principles.
Personal Life
Buffett's love life took an unexpected turn in 1949 when he
became infatuated with a young woman named Susan Thompson, who was already in a
relationship with a ukulele-playing boyfriend. In an attempt to win her over,
Buffett purchased a ukulele and began playing it himself. Though his romantic
pursuit didn't succeed, his interest in music left a lasting impact on Susan's
life, eventually leading to their marriage. Buffett's affection for the ukulele
endured, and he often incorporates it into various events, including
stockholder meetings. Inspired by his passion for the instrument, Dave Talsma
crafted two unique Dairy Queen ukuleles, one of which was later auctioned off
for charity.
In 1952, Buffett tied the knot with Susan Buffett (formerly
Thompson), with whom he had three children: Susie, Howard, and Peter. Despite
their separation in 1977, the couple remained legally married until Susan
Buffett's passing in July 2004. Their daughter Susie carries on the family
legacy by contributing to noble causes through the Susan A. Buffett Foundation
in Omaha. At 76 years old, Buffett entered into marriage with Astrid Menks, a
longtime friend whom he had known since his wife's departure in 1977. Menks,
then 60 years old, had been a supportive presence in Buffett's life during his
period of marital transition. Their bond was further solidified when Susan,
Buffett's wife, arranged a meeting between them before leaving Omaha to pursue
her singing career.
In 2006, Buffett's annual income was reported to be
approximately $100,000, which paled in comparison to the hefty compensation
packages typical of senior executives in similar industries. Despite this
modest income, in 2008, his total compensation rose to $175,000, with a base
salary of just $100,000.
Remaining rooted in his frugal habits, Buffett continued to
reside in the same home located in Omaha's central Dundee neighborhood, a
property he had acquired back in 1958 for a mere $31,500—a fraction of its
current market value. Additionally, he maintained a second residence in Laguna
Beach, California, purchased in 1971 for $150,000. In a lucrative move, Buffett
sold this property in 2018 for an impressive $7.5 million.
In 1989, Buffett acquired a private plane using nearly $6.7 million from Berkshire Hathaway. However, in a characteristic display of his self-effacing humor, he dubbed the aircraft "The Indefensible." This choice of nickname reflects Buffett's humility and reluctance to indulge in ostentatious displays of wealth, despite his immense success as an investor and business magnate.
Biography of Ace Investor Warren Buffett
Health Care
During a routine evaluation on April 11, 2012, Buffett was
diagnosed with stage I prostate disease. By mid-July of the same year, he
announced plans to undergo a two-month regimen of daily radiation therapy.
Despite the medical challenge, Buffett conveyed to investors in a letter his
feeling of being "extraordinary," expressing that he maintained his
typical excellent health and had a 100 percent energy level throughout the
process.
Buffett completed the full 44-day cycle of radiation
treatment on September 15, 2012, a milestone he described as a "terrific
day" and expressed his delight in finally concluding the treatment. This
experience underscores Buffett's resilience and positive outlook, even in the
face of health setbacks.
Business Career
Buffett's career
trajectory is marked by significant roles at prominent companies and
partnerships, shaping his journey as one of the most successful investors in
history. He began as a securities analyst and investment salesman at
Graham-Newman Corp. from 1954 to 1956. Following this, he served as a general
partner at Buffett Partnership, Ltd. from 1960 to 1970. Since 1970, Buffett has
held the positions of chairman and CEO of Berkshire Hathaway Inc., a role he continues
to fulfill to this day.
During his tenure at Graham-Newman Corp., Buffett's path
intersected with GEICO, an insurance company on whose board Benjamin Graham
served. In 1951, Buffett traveled to Washington, D.C., where he met Lorimer
Davidson, the vice president of GEICO, during an impromptu visit to the
company's office. Despite Davidson's brief recollection of their encounter, he
would become a close friend and influential figure in Buffett's life. Upon
returning to Omaha, Buffett pursued a career as a stockbroker and enrolled in a
Dale Carnegie public speaking course. He also began teaching a "Investment
Principles" night class at the University of Nebraska-Omaha, despite being
significantly younger than most of his students.
In 1952, Buffett married Susan Thompson, and they welcomed
their first child, Susan Alice, the following year. Buffett's entry into
Benjamin Graham's partnership in 1954 marked a significant milestone in his
career. He learned valuable lessons from Graham, who emphasized the importance
of a stock's intrinsic value and insisted on a significant margin of safety in
investments. The Buffetts expanded their family with the arrival of their
second child, Howard Graham, in the same year. In 1956, Buffett founded Buffett
Partnership Ltd. with personal funds totaling about $174,000.
Throughout the late 1950s and early 1960s, Buffett expanded
his business operations, running multiple partnerships and making strategic
investments. Notably, his involvement with the Sanborn Map Company in 1961
demonstrated his knack for value investing and activism. Buffett, along with
other shareholders, successfully took control of the company's stock, leading
to significant changes in its management and operations. This episode
exemplified Buffett's shrewd investment approach and his ability to create
value for shareholders.
Wealth and Philanthropy
Buffett's immense wealth has solidified his position as one
of the most influential figures in the financial world. In 2008, Forbes ranked
him as the richest person globally, with an estimated net worth close to $62
billion. However, his philanthropic efforts have also been noteworthy. By 2009,
despite giving vast sums to charity, Buffett's net worth remained substantial,
at $37 billion, making him the second wealthiest individual in the United
States, trailing only Bill Gates. By September 2013, his net worth had
increased to $58.5 billion, reflecting his continued success in the business
world.
Buffett's investment prowess has earned him accolades,
including being hailed as the finest money manager of the 20th century in a
survey by the Carson Group in 1999, surpassing the likes of John Templeton and
Peter Lynch. Time magazine recognized him as one of the 100 most influential
people globally in 2007. His contributions to society were further acknowledged
when President Barack Obama awarded him the Presidential Medal of Freedom in
2011. In 2010, Buffett and Bill Gates were identified as the two most
influential global thinkers in a study conducted by Foreign Policy.
Despite his vast wealth, Buffett has been vocal about his
belief in the disproportionate rewards accrued by the wealthy in a market
economy. He has expressed his intention to leave minimal inheritance to his
children, stating his desire to provide them with enough to pursue their
aspirations without disincentivizing their ambition.
In a monumental act of philanthropy, Buffett announced in
June 2006 his plan to donate 83 percent of his fortune to the Bill &
Melinda Gates Foundation (BMGF). This commitment, valued at approximately $30.7
billion, represents the largest charitable donation in history. Buffett's
donation has cemented his legacy as one of the pioneers of
philanthrocapitalism, leveraging his wealth to address societal issues on a
global scale.
Buffett's pledge to the BMGF is subject to several
conditions, ensuring the effective utilization of the funds. These conditions
include the continued existence of the foundation, its maintenance as a
charity, and the annual donation of a predetermined percentage of Berkshire
Hathaway's net assets. This commitment underscores Buffett's dedication to
philanthropy and his vision for creating a lasting impact through charitable
endeavors.
