The Legacy of Warren Buffett: The Oracle of Omaha
For many years, investors all throughout the world have looked up to Warren Buffett. His remarkable investing career, which began when he was just eleven years old with his first stock buy, has been documented in many international venues. It is common advice to any investor, experienced or not, to adopt his strategy. But just who is Warren Buffett, exactly?
Examining the biography of the man known as the “Oracle of Omaha,” this investigation highlights the crucial decisions and investments that made him one of the richest and most respected businesspeople in the world.
Early Life and First Investments
Warren Edward Buffett showed an early interest in financial and commercial matters when he was born in Omaha, Nebraska, in 1930, to Howard and Leila Buffett. Often called a mathematical genius, he had the ability to mentally compute large amounts in columns, a skill that would come in very handy in his future pursuits. He reportedly told a friend once.
“If I’m not a millionaire by 30, I’ll jump from Omaha’s tallest building.”
Warren bought three $38 apiece Cities Service Preferred shares when he was eleven years old, his first investment. He sold the stock for a small profit when it reached $40, a choice he later regretted as it shot up to $200. This encounter taught me early on the value of patience in investing.
Teenage Entrepreneur
By 13, Warren was working as a paperboy, waking at 4:30 AM to deliver the Washington Post. He also marketed magazine subscriptions and calendars to his newspaper consumers. By 15, he had made $2,000 from his paper route, comparable to about $26,000 today. He invested $1,200 in a 40-acre farm, forming a profit-sharing deal with a local farmer.
As a high school sophomore, 17-year-old Buffett and a friend bought a used pinball machine for $25 and set it in a barber shop. Within months, they had additional machines at different barber shops across Omaha, generating roughly $25 weekly. They eventually sold the business for $1,200 to a war veteran.
Education and Early Career
Warren received a Bachelor of Science from the University of Nebraska and applied, but was turned down, to Harvard Business School. Distracted, he registered at Columbia Business School, where Benjamin Graham was a professor. In 1951, he earned a Master of Science in Economics.
Warren went back to Omaha in 1952 and started a stockbroker business while enrolled in a Dale Carnegie public speaking school. Equipped with his newly acquired knowledge, he started instructing University of Nebraska night courses. His family moved to New York by 1954 so he could work for Benjamin Graham.
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Building Berkshire Hathaway
Warren started out at Benjamin Graham’s firm in 1954, earning $12,000 a year, or around $109,000 today. Warren had saved $174,000 (about $1.5 million today) when Graham resigned and ended the company in 1956. Warren chose to settle in Omaha despite his nomadic lifestyle, paying $31,500 for a property, a little sum given his penurous ways.
Warren gathered close friends and family to form the Buffett Partnership in 1956. He had formed seven partnerships and owned a 9.5% interest in more than a million dollars in partnership assets by 1960.
Transforming Berkshire Hathaway
Warren became a millionaire in 1962 through his partnerships, which topped $7 million in assets, with over a million belonging to him. He combined several joint ventures into one company. His worst purchase, he said, was Berkshire Hathaway in 1962. Originally started in the 1830s as a textile industry in New England, Berkshire was failing because of inept management. After a disagreement with its management, Warren aggressively purchased shares in an effort to change its leadership.
Even with early difficulties, Warren came to the conclusion that the textile era was finished by 1966. He turned Berkshire from a textile company to a holding corporation that makes investments in a variety of industries. A sea change was brought about in 1967 when Berkshire bought two insurance companies. Their large cash flow supported more purchases.
Philanthropy and Legacy
Today, Berkshire Hathaway controls over 1,000 firms, with total assets surpassing $700 billion. Warren Buffett became a billionaire in 1990 when Berkshire started selling Class A shares. Renowned for his charitable endeavors, one of his greatest gifts was to the Bill and Melinda Gates Foundation, equal to 185 million Berkshire Hathaway shares valued at $28.3 billion. Presently worth over $84 billion, Warren is mentally unmatched and admired for his direct and honest attitude.
Conclusion
Warren Buffett’s rise from a little child fascinated by numbers to one of the most admired people in the corporate world is a monument to tenacity, intelligence, and moral investment. His legacy lives on as evidence that early commitment to a passion may result in remarkable achievement.
