Warren Buffett


Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor and philanthropist. He is considered by some to be one of the most successful investors in the world. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway.

Buffett is often referred to as the "Wizard of Omaha" or "Oracle of Omaha," or the "Sage of Omaha," and is noted for his adherence to value investing and for his personal frugality despite his immense wealth.


Education

In 1947, Buffett entered the Wharton School of the University of Pennsylvania. He would have preferred to focus on his business ventures; however, he enrolled due to pressure from his father. He then transferred to the University of Nebraska–Lincoln where at 19, he graduated with a Bachelor of Science in Business Administration. After being rejected by Harvard Business School, Buffett enrolled at Columbia Business School upon learning that Benjamin Graham taught there. He earned a Master of Science in Economics from Columbia in 1951. Buffett also attended the New York Institute of Finance.


Career

Buffett worked from 1951 to 1954 at Buffett-Falk & Co. as an investment salesman; from 1954 to 1956 at Graham-Newman Corp. as a securities analyst; from 1956 to 1969 at Buffett Partnership, Ltd. as a general partner and from 1970, as Chairman and CEO of Berkshire Hathaway Inc.

In 1954, Buffett accepted a job at Benjamin Graham's partnership. His starting salary was $12,000 a year (approximately $105,000 inflation adjusted for the 2012 USD). There he worked closely with Walter Schloss. Graham was a tough boss. He was adamant that stocks provide a wide margin of safety after weighing the trade-off between their price and their intrinsic value. The argument made sense to Buffett but he questioned whether the criteria were too stringent and caused the company to miss out on big winners that had other appealing features.

In 1956, Benjamin Graham retired and closed his partnership. At this time Buffett's personal savings were over $174,000 ($1.47 million 2012 USD[31]) and he started Buffett Partnership Ltd. In 1959, the company grew to six partnerships and Buffett met future partner Charlie Munger.

In 1962, Buffett became a millionaire because of his partnerships, which in January 1962 had an excess of $7,178,500, of which over $1,025,000 belonged to Buffett. He merged these partnerships into one. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway.

In 1967, Berkshire paid out its first and only dividend of 10 cents. In 1969, following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.

In 1987, Berkshire Hathaway purchased a 12% stake in Salomon Inc., making it the largest shareholder and Buffett a director. In 1990, a scandal involving John Gutfreund (former CEO of Salomon Brothers) surfaced. A rogue trader, Paul Mozer, was submitting bids in excess of what was allowed by Treasury rules. When this was brought to Gutfreund's attention, he did not immediately suspend the rogue trader. Gutfreund left the company in August 1991. Buffett became Chairman of Salomon until the crisis passed.

In 1988, Buffett began buying The Coca-Cola Company stock, eventually purchasing up to 7% of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.

While I could keep on expanding on Buffett's story, the truth of matter is Warren has continued to have an extraordinarily successful career. Buffett became a billionaire in the year of 1990. Buffett also played an instrumental role in the Great Recession and invested a $5 billion stake in one of the largest Investment Banks, Goldman Sachs. He also invested $3 billion in GE during this time.

Source: Wikipedia. Note: Click on the picture(s) for cool animations.


“Price is what you pay. Value is what you get.”


"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."