The Most Powerful Investor of these decades

About Warren Buffett

Warren Buffet, also known as the Oracle of Omaha, is a business tycoon, investor, and philanthropist. Buffett is an inspiration for all those who seek diligence and makes substantial efforts to achieve success. 

On August 30, 1930, Buffett was born in Omaha, Nebraska, U.S, to Howard and Leila Buffet, and he was one of the three children. Buffet’s father, Howard Buffet, was a four-term United States congressman. 

Warren was a gifted child and had more tendency toward business from a very young age. Buffett started his educational journey at the Rose Hill Elementary School. Besides, he also studied at Allice Deal Junior High School and graduated in 1947 from Woodrow Wilson High School. 

Warren Buffett was creative, and his passion for business started at a young age. Buffett used to sell soft drinks and chewing gums to earn money. During his teenage, he was involved with various ventures and made efforts to save and invest money. 

Warren Buffett earned his graduate degree in a Bachelor of Science in Business Administration from the University of Nebraska. However, he also studied for two years at the University of Pennsylvania before shifting to the University of Nebraska. 

Buffett took inspiration from Benjamin Graham’s book “The Intelligent Investor.” The book impressed and captivated Buffett to study with Benjamin Graham at the Columbia Business School. 

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So, Buffett enrolled in Columbia Business School, where he studied science in economics and earned a master’s degree in 1951. David Dodd and Benjamin Graham were among his favorite teachers at Columbia Business School. Read on! 

Career and Achievements 

Buffett got involved in an investment partnership in 1956, just at the age of 25. Today’s billionaire had seven limited partners at the time who gave him $105,000. The surprising thing is that Buffett invested $100 as a general partner. 

Besides, Buffett partners received 6% interest per year. Buffett made substantial efforts to ensure business success and higher returns on investments (ROIs). About 75% of the profits and ROIs generated above the 6% interest per year his partners received. 

Buffett received the remaining 25%, and over the next decade, he started receiving 29.5% per year. So, this showcased how diligent Buffett was in achieving his goals. Later, he closed the partnership in 1965 and acquired a personal stake of $25 million. According to Warrant Buffet: 

“Can you explain to a fish what it’s like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has the same kind of value.”

Berkshire Cotton Manufacturing

Warrant Buffett purchased an interest in Berkshire Cotton Manufacturing using his capital. Berkshire Cotton Manufacturing was a reputable and well-established textile company. Later, he merged the company with Hathaway Manufacturing and purchased an interest in two insurance companies. 

That’s why Buffett and Partners renamed the company, Berkshire Hathaway. Buffet’s idea of investing in insurance companies stabilized Berkshire Hathaway’s financial position in the market. The insurance companies generated higher ROIs, and the steady cash flow allowed Buffett to invest in stocks and bonds. 

In 1967, Berkshire Hathaway’s stock portfolio reached $7.2 million. When Buffett started controlling the company’s operations, he made massive achievements, and the portfolio gained $42 million. 

BERKSHIRE HATHAWAY HISTORY

Insurance Companies

Berkshire Hathaway purchased three more insurance companies during the 70s. Buffett also started five other insurance companies. Because insurance companies generated higher profits, Buffett converted Berkshire into a holding company closing the textile department. 

In addition, Berkshire Hathaway boomed in the market and owned many other companies that generated higher ROIs without debts. Berkshire Hathaway achieved various milestones, and the company’s noninsurance side had a sales turnover of over $2 billion by 1993. 

Bank of America

Buffett has 1.3 billion shares at the Bank of America Corporation, making him the second-largest holder in the organization. Buffett started taking an interest in the Bank of America in 2011 when he offered financial support to the organization after the 2008 Great Recession. 

Buffet, through Berkshire Hathaway, bought 50,000 shares of Bank of America for $5 billion. Each share has a liquidation value of $100,000. Bear in mind that Bank of America is the second-largest financial organization in the U.S by assets. 

Apple

Apple is the largest holding of Buffett with 49.1% of the Berkshire Hathaway Portfolio. Berkshire Hathaway has over one billion shares in Apple with a net value of $109.3 billion. So, he purchased more shares of Apple in 2018, allowing the tech giant to reach the number one spot surpassing Wells Fargo. 

American Express

American Express is a reputable financial services company. Buffett’s Berkshire Hathaway has 151 million shares worth $14.4 billion, making 6.5% of the company’s portfolio. Warren Buffett helped American Express in 1963 when it needed a large capital to streamline and expand its business operations.

So, this is where Buffett acquired his first stake in American Express. Likewise, he made efforts to ensure American Express survived the 2008 economic crisis. Warren Buffett’s intelligence and sophisticated approach are some of the few reasons behind the success of American Express. 

Coca-Cola

Buffett holds the Coca-Cola Company stock. The business tycoon started purchasing Coca-Cola shares after the 1987’s stock market crash. Today, he has 400 million shares worth $19.2 billion, comprising 8.6% of the Berkshire Hathaway Portfolio. Buffett was a sigh of relief and savior for the Coca-Cola Company after the stock market crash in 1987. 

Kraft Heinz

Berkshire Hathaway and 3G Capital acquired H.J. Heinz Company, one of the most reputable food brands worldwide. In 2015, Buffer merged the company with Kraft and renamed it Kraft Heinz Company. Buffett holds 325.6 million shares of Kraft Heinz despite the frequent ups and downs and financial losses between 2017 and 2020. These shares are worth $9.4 billion, making it Berkshire Hathaway’s 4.2% portfolio. 

Presidential Medal of Freedom

President Barack Obama presented Warren Buffett with the Presidential Medal of Freedom in 2011 for his contributions to the American economy over the years. Buffer is the CEO and chairman of Berkshire Hathaway and shares in multiple companies, making him one of the wealthiest people in the world. 

In addition to achieving several awards and being the most successful investor of the millennium, Buffett has also made substantial philanthropy efforts and donates most of his money to help the underprivileged. So, this makes him an inspiration for young entrepreneurs and people who want to succeed in all walks of life. 

Final Words

Warrant Buffett has been the most successful investor in the stock market for the last three decades because he follows a unique business approach and focuses on the business value and its market price.

In addition, he makes efforts to understand the business, perform a thorough analysis, and generate insights. Once he achieves these goals, he acts like a business owner instead of a speculator in the stock market. 

Inspired by Benjamin Graham’s book and business perspectives, Buffett studies everything about a business because he believes learning is essential before getting in the field and becoming an expert. 

Buffett works with the management and usually grants the managers his proxy vote when buying shares of a company. The reason is to ensure the company does not move away from its core mission, vision, and values. 

Moreover, Buffett always develops an investment strategy that revolves around value with little to no faith in daily movements in share prices. Warren Buffett always focuses on and maintains a long-term business perspective and never compromises on business value. Buffett has two business rules: first, never lose money; second, don’t forget the first rule. 

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