Business magnate, Investor and Philanthropist, often referred to as “Oracle of Omaha”, Warren Edward Buffet. He is one of the richest and respected entrepreneurs in the business world. Born during the great depression in Nebraska, Warren Buffett is born as an investing legend. With a net worth of $53.5 billion, Forbes declared him second wealthiest American while a fourth wealthiest person in the world.
A self-made, Buffett is renowned for his frugal lifestyle and adherence to ethical principles. As a fantastic personage holding honour in 15th world’s most powerful people. From a young age, he began to show his love for maths. While other children were busy playing, he was busy understanding the concept of Stockbroking at his father’s office. His childhood was exemplary of hard work, dedication and diligently odd jobs of car washing to delivering newspapers and much more. When Buffett’s father was elected to the U.S House of Representatives, he wisely invested his savings in purchasing a pinball machine and producing a profit by it. Eventually, he sold the business for $1,200 and made a significant profit before his 16th birthday.
Buffett’s studies:
Success didn’t walk along with Buffett; as a young, he did not achieve admission in his desired college. His father persuaded him to continue his education, with Buffett unenthusiastically agreed to continue further and attend the University of Pennsylvania. He studied for two years and advanced to University of Nebraska to complete his degree, and emerged with nearly $10,000 savings from his childhood business at the age of 20.
After being rejected from renowned Harvard Business school, he enrolled at Columbia business school. He studied economics under Benjamin Graham, who later became his lifelong friend. Graham’s class inspired him in securities analysis, and he learned the fundamentals of value investing. The intelligent investor and Security Analysis books changed his life and provided him with the proper intellectual framework and path towards investing.
Berkshire Hathaway:
In 1956, Buffet established the firm Buffett Partnership Ltd in Omaha. Implementing the techniques learnt from Garam, he achieved success in keenly inspecting overvalued companies and became a millionaire. One such venture he has been observing was a textile company named Berkshire Hathaway. In 1960 he started accumulating stock, and in 1965 he had complete control of the company.
As a value investor, he bought the company as it was cheap, even though he didn’t hold expertise in textile manufacturing. Gradually, Buffett altered Berkshire’s focus away from traditional endeavours and used it as a holding company to invest in other businesses. Some of the subsidiaries include GEICO, Dairy Queen, Fruit of the Loon, NetJets, Benjamin Moore and Co.
Berkshire Rewards and pitfalls:
Business is not even busy for Buffet. In 1975, along with Charlie Munger, his business partner, were suspected by the Securities and Exchange Commission for fraud. Further, the trouble arrived in 1991 when the news popped through intense negotiations with Treasury bidding rules on multiple occasions, which led to holding on buying Treasury notes and subsequently bankruptcy for the firm.
In recent years, he played a significant role as financier and facilitator of substantial transactions. He helped and invested in companies that were having a financial disaster, which ten years later showed enormously positive affect.
His recent work included a partnership with 3G capital to merge J.H Heinz company and kraft foods to develop into Kraft Heinz Food company. The new company boasts an annual revenue of $28 billion which is the third-largest food and beverage company in North America.
Warren Buffett is most idolised, revered and imitated investors with his personal net worth of over $80 billion, making him the third richest person in the world.
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