Warren Buffett

Biography

Warren Edward Buffett (born August 30, 1930) is an American investor, business tycoon, philanthropist, and the chairman and CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of over US$85.6 billion as of December 2020, making him the world’s fourth-wealthiest person.

Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth, eventually entering the Wharton School of the University of Pennsylvania in 1947 before transferring to and graduating from the University of Nebraska at 19. He went on to graduate from Columbia Business School, where he molded his investment philosophy around the concept of value investing pioneered by Benjamin Graham. He attended New York Institute of Finance to focus his economics background and soon after began various business partnerships, including one with Graham. He created Buffett Partnership, Ltd in 1956 and his firm eventually acquired a textile manufacturing firm called Berkshire Hathaway, assuming its name to create a diversified holding company. In 1978, Charlie Munger joined Buffett as vice-chairman.

Buffett has been the chairman and largest shareholder of Berkshire Hathaway since 1970.[9] He has been referred to as the “Oracle” or “Sage” of Omaha by global media. He is noted for his adherence to value investing, and his personal frugality despite his immense wealth. Research published at the University of Oxford characterizes Buffett’s investment methodology as falling within “founder centrism”, defined by a deference to managers with a founder’s mindset, an ethical disposition towards the shareholder collective, and an intense focus on exponential value creation. Essentially, Buffett’s concentrated investments shelter managers from the short-term pressures of the market.

Buffett is a notable philanthropist, having pledged to give away 99 percent of his fortune to philanthropic causes, primarily via the Bill & Melinda Gates Foundation. He founded The Giving Pledge in 2009 with Bill Gates, whereby billionaires pledge to give away at least half of their fortunes.

Investment principles

  • Spend with Wisdom: Buffett’s philosophy of life highlights frugality in his personal finances, just remember that he still lives in the Omaha house he acquired in 1958. Remember that it does not matter what level of income you have, if you do not achieve control expenses, you can lose your quality of life very quickly.
  • Don’t invest in anything that you don’t understand: no matter what the sector or the type of investment in which you have the opportunity to place your money, the important thing is that you understand how it works and what risks you are incurring; For this, try to get involved in the research task that this warrants.
    Let us remember that Buffett was one of the few on Wall Street who did not invest in the companies known as the “dot com” at the end of the 90’s, before the technological bubble burst in which many lost a good part of their heritage.
  • Learn to take risks and how to manage them: Risk is inherent to investments, understanding what you are investing in helps mitigate risk, but you must know what your tolerance for losses is, Buffett warns that if you cannot see a 50% drop of your investment without panic, you should not invest in the stock market.
    It also tells us that the more absurd the market behavior, the better the opportunity for the disciplined investor and that we are fearful when others are greedy and greedy when others are fearful.
    This brings us to 2008, in the midst of the financial crisis. Weeks after the bankruptcy of Lehman Brothers, Warren Buffett was investing $ 5 billion in Goldman Sachs, when everyone thought the world was going to end.
  • Buy quality and never sell: Buffett always indicates that to invest in the stock market you must think as an owner, you must feel that you are really acquiring the company and not a simple paper based on a simple analysis of financial ratios.
    Companies with extensive experience, well-known brands and loyal customers are the main characteristics that Buffett looks for in the actions he incorporates into his portfolio. That is why time is also part of your investment. You must take the time to review and convince yourself that the investment you are making is truly an opportunity.
  • Learn to say “No” and think long term: When you take risks, you must put into practice the gift of patience. You shouldn’t always be buying and selling assets, much less basing your strategy on headlines of the day.
    It is very common to find people who are easily influenced by trends or results of other investors. Buffett affirms that the market will always give opportunities, it is only a matter of being forewarned at bat.

Results

For the vast majority of experts, Warren Buffett is the best investor in history.

Known as the Oracle of Omaha, his hometown, the returns he has made through his investment company, Berkshire Hathaway, are unmatched in any historical moment.

Specifically, Buffett has achieved an average annual return by subtracting reinvested dividends of 13% for 55 years, using what for some is the best investment strategy in the stock market: Value investing.

His excellent results have helped him to appear prominently in the ranking of the world’s greatest fortunes that Forbes magazine periodically publishes, year in and year out.

His annual conferences, held in Omaha, together with his partner Charlie Munger, have become a pilgrimage site for many value investors trying to replicate, or at least get closer to, the results of the good Warren.

Articles

Warren Buffett’s Berkshire Company Reveals Three New Secret Purchases

Warren Buffett’s Berkshire Company Reveals Three New Secret Purchases

JTFebruary 20, 20213 min read

The Omaha Oracle Company revealed three modifications, so far classified as secret, to its portfolio due to the coronavirus pandemic. Warren Buffett’s Berkshire Hathaway Inc. revealed three share purchases it…

The ‘Buffett Indicator’ Soars To Highs: Could A Crash Come?

The ‘Buffett Indicator’ Soars To Highs: Could A Crash Come?

JTFebruary 12, 20212 min read

The Wilshire 5000 Total Market Index , known as the ‘Buffett indicator’ , compares the value of the stock market to the size of the economy. Warren Buffett’s favorite market gauge reaches has risen…