Warren Edward Buffett was born in Omaha, Nebraska, on August 30, 1930 and is an American investor and businessman. He is considered one of the largest investors in the world, as well as being the largest shareholder and president and CEO of Berkshire Hathaway.
In 2017, Buffett was ranked third on Forbes magazine’s list of the richest people in the world, behind Bill Gates and Amazon founder Jeff Bezos, with an estimated fortune of $ 87 billion.
Known as the «Oracle of Omaha,» Buffett is adept at investing in value and leads an austere lifestyle, despite his immense wealth. His annual salary in 2006 was about $ 100,000, which is on the bottom of salaries compared to other top executives in many companies. He lives in the same house, in downtown Omaha, that he bought in 1958 for $ 31,500.
Buffett is also a well-known philanthropist, in 2006 he announced a plan to donate his fortune; 99% of it will go to the Bill and Melinda Gates Foundation.
Warren Buffett was born in 1930 and is the only son in a family of three siblings. His father was Howard Homan Buffett, a stockbroker and member of the United States Congress. As a young man he handed out newspapers to earn some money and this probably piqued his interest in the media, where he subsequently made several successful investments, including in the Washington Post.
Warren tried various businesses part-time while studying at the Wharton School at the University of Pennsylvania, but his career took a decisive boost after graduating from the University of Nebraska. He also studied economics at Columbia Graduate Business School, where he was taught by Benjamin Graham, known as the father of value investing.
Warren Buffett’s business. Timeline.
From 1950 to 1956 Buffett increased his capital from $ 9,800 to $ 140,000.
1952. Warren Buffet began working with Benjamin Graham, in an office where he spent his days analyzing stock market reports. Both practiced the investment tactic of value investing (investing in their beautiful companies with solid fundamentals and always for the long term), but they did so with some differences. While Graham relied rigorously on a company’s balance sheet and revenue, Warren was also very interested in other, more intangible items; as the management team or the brand.
Graham eventually retired and Buffett started a limited partnership in Omaha, using capital from his family and friends. The partnership was a success, and Buffett says that since then he has made an average annual profit of 23 percent, 17 more than the market average.
1956. With $ 100,000 of his own and another $ 105,000 from different partners, he founded Buffett Associates Ltd. At the end of that year, the company managed a capital of $ 300,000.
Until 1961 Buffett achieved a return of 251%, while the Dow Jones, the benchmark index of the American stock market, only obtained 74.3%.
1962. The company had a capital of US $ 7.2 million, of which one million belonged to Buffet. That year he decided to integrate all the partnerships into Buffett Partnerships Ltd. and increased the entry requirements for new investors to $ 100,000. That same year Charles Munger returned to his native Omaha from California. Buffett struck up a friendship and business collaboration with Munger that continues to this day. By 1972, Buffett Partnerships Ltd.’s assets had grown 1,156% versus the Dow Jones’ 123% growth.
1965. Buffett acquired part of the Berkshire Hathaway textile firm, under which he would later unify all of his businesses, and soon began investing in insurance companies. His beginnings were not brilliant.
1969. He liquidated Buffett Partnerships Ltd. and was left with only Berkshire Hathaway and Diversified Retailing shares. He needed a lot of capital to revive battered Berkshire.
1970. Buffett renews himself and decides to reconvert his empire, while textiles contribute a meager 45,000 dollars, the banking and insurance divisions contribute 2.6 and 2.1 million dollars.
1971. He bought See’s Candy, a gourmet chocolate company for 30 million. The largest operation to date undertaken by the group, until the purchase of the Burlington Northern Santa Fe railway for 44,000 million in 2009.
1976. He entered the GEICO insurance company. Benjamin Graham died that same year.
«At the end of the 70’s, Buffett’s fame was such that rumors of interest on the part of the genius in some company, triggered the value of him almost automatically»
1980 to 1990. Berkshire bought Nebraska Furniture Mart, Scott & Feltzer and invested in Coca-Cola.
Buffett befriended Charles T. Munger, an attorney and investor, and Munger joined Berkshire Hathaway; as vice president, alter ego and friend. Warren Buffett is always the first to acknowledge the contribution Charlie Munger has made to Berkshire Hathaway.
2000. At the turn of the century, many doubted Buffett because of his low profitability, but they came face to face with reality with the dot-com tech bubble. Warren never invested in products that were too complex or that he did not understand, which kept his business safe from stock market swings.
2008. Buffett made one of his biggest purchases, in conjunction with Mars. On April 28, he announced that the largest candy and gum company in the US would be created, with a value of $ 23 billion. This purchase would give Warren Buffett, through Berkshire, 10% in Wrigley, which would become a separate subsidiary of the Mars company. At the end of that same year, Berkshire was one of the companies hardest hit by the subprime crisis; for its exposure to banking and insurance companies.
2009. Buffett, through Berkshire Hathaway, carried out the largest operation in his history, buying for US $ 44 billion the Burlington Northern Santa Fe Railroad Company (BNSF), of which he already owned 22.6%.