Editorial : CEO ·
Warren Buffett was born in Nebraska, Omaha USA on the 30th of August in 1930. He is one of the worlds richest men, with a fortune that is only surpassed by Bill Gates of Microsoft fame. He is considered one of the most successful investors of all time and has picked up the nickname of the “Oracle of Omaha”.
Buffett was born to Leila and Howard Buffett and was the second of three children, he being the only boy. Buffett’s father, Howard was a stockbroker and also became a member of congress. He showed early signs of being entrepreneurial through being involved in various business dealings as a child, including purchasing bottles of cola cheaply and selling them for a profit. and made his first investment in the stock market when he was just 11 years old.
In his eduction life, Buffett began studying at the Wharton School of Finance at the University of Pennsylvania, but transferred to the University of Nebraska where he graduated. He then went on to the Columbia University to do a Masters in economics. This was where he met the influential value investor Benjamin Graham, the person that change his career.
After Graham’s retirement, Buffett returned to Omaha and began a limited investing fund partnership with a group of friends, family and associates. The “Buffett Partnerships Ltd” fund racked up amazing returns for its investors over a ten year period, with returns 10 times higher than the Dow Jones Industrial average for the same time. Buffett liquidated the fund and took control of the textile company Berkshire Hathaway.
It was a difficult time for the textile industry and Buffett eventually wound up Berkshire Hathaway’s textile activities, but kept the name for Buffett’s portfolio of companies and investments. The insurance industry was the first major area of success that Berkshire Hathaway had, with the funds used to acquire carefully selected investments each year. Major undervalued companies that Buffett took advantage of included “American Express”, “Coca-Cola” “The Washington Post” and “Gillette”. Berkshire Hathaway owns large holdings of each of the above major brand companies (more than 5% each. Berkshire has performed more than twice as well as the S&P 500. Amazing that Buffett has made millions from something as toxic as Enron bonds. And of course it is somehow unsurprising that he managed to help broker a deal between A-Rod and the New York Yankees.
In the meantime, he has transformed the Berkshire into the main event. Over the past three years, Berkshire has spent $27.3 billion to buy seven companies in industries as disparate as aviation, fast food, and home furnishings. The $22 billion purchase of re insurer General Re Corp., which closed late last year, was Buffett’s largest ever.
Warren Buffett preferred owning businesses to passive minority investment. Until recently, Berkshire’s acquisitions have been few and far between because Buffett insisted on buying top-quality businesses at discount prices. What has changed is that he is now willing to pay a premium for one of a kind businesses.