Who Is Warren Buffett: Net Worth, Quotes, And The Legendary Investor’s Story

Buffett was born in Omaha, Nebraska in 1930. His interest in investing began at a young age, as he would purchase stocks with money he earned from delivering newspapers. He attended the University of Nebraska before transferring to the University of Pennsylvania’s Wharton School, where he received his Bachelor’s degree in Economics. He then attended Columbia Business School, where he studied under investment legend Benjamin Graham.

Benjamin Graham’s value investing philosophy greatly influenced Buffett’s own investment strategies. Graham’s book The Intelligent Investor became a key text for Buffett and he later referred to Graham as “the second most influential person in my life, behind only my father.” Graham’s philosophy emphasized the importance of thorough financial analysis, focusing on a company’s intrinsic value, and the importance of patience and discipline in investing. He also worked for Graham for a short period at his investment firm, Graham-Newman Corporation.

After completing his education, Buffett returned to Omaha and began his investment career. In 1965, he acquired Berkshire Hathaway, a failing textile manufacturing company, which he later termed a mistake – “I would have been better off if I’d never heard of Berkshire Hathaway,” he would go on to say – but which would serve as the base for his investment portfolio. He gradually shifted the company’s focus from textile manufacturing to insurance and investments. Through a series of savvy investments and acquisitions, he turned Berkshire Hathaway into a holding company with a diverse portfolio of successful businesses.

In the early stages of his investment career, Buffett focused on special situations and arbitrage opportunities. He looked for companies that were undervalued due to special circumstances such as a merger, spinoff, or bankruptcy. He also engaged in scandal buying, such as his investment in American Express after the “salad oil scandal” where a major supplier was found to have fraudulently inflated its inventory.

Buffett’s reputation as a successful investor began to grow in the 1970s, and by the 1980s, he had become a legend in the investing world. His annual letters to Berkshire Hathaway shareholders were eagerly anticipated and widely read for their insights on the market and the economy. He was also known for his unconventional approach to investing, shunning the trendy stocks and focusing instead on undervalued companies with strong fundamentals.

As he gained more experience and his portfolio grew, Buffett began to focus on quality companies with strong fundamentals. He made several key acquisitions, such as GEICO, which he saw as a well-managed company with a strong brand and a clear competitive advantage. (GEICO was also a long-time Benjamin Graham investment.) He also began to focus more on the management of the companies in which he invested, looking for strong, ethical leaders who shared his long-term view.

One key influence on this shift in focus was his colleague Charlie Munger. Munger, who has been Vice Chairman of Berkshire Hathaway since 1978, is known for his wisdom and insights on business and investing. Together, Buffett and Munger have been instrumental in shaping Berkshire Hathaway’s investment philosophy and strategies. Munger’s influence on Buffett can be seen in the way they approach decision making and the types of companies they invest in.

Munger is known for his ability to think holistically and his emphasis on rationality in decision making. He is often credited with helping Buffett to see the bigger picture and to focus on the long term rather than short-term gains. Munger has been quoted as saying “I have a passion for keeping things simple and avoiding complexity,” a mindset that has been adopted by Buffett as well.

Their partnership has been instrumental in the companies that Berkshire Hathaway has acquired over the years. The acquisition of GEICO, for example, was largely the result of Munger’s insistence that the company was undervalued and that it had a great management team. Similarly, Munger has been vocal in his support of Berkshire Hathaway’s investments in companies such as Wells Fargo and Coca-Cola, arguing that these are companies with strong brands and solid fundamentals that will perform well over the long term.

In addition, Munger is known for his wit and wisdom, often dispensing advice in a humorous and memorable way. This has made him a popular speaker at Berkshire Hathaway’s annual meeting and his speeches are widely read and quoted. His insights on business and investing have helped to shape Berkshire Hathaway’s investment philosophy and strategies.

As Berkshire Hathaway grew, Buffett’s ability to take advantage of the insurance company’s large float became a crucial part of the business’s success. The concept of “float” refers to the money that an insurance company holds in reserve to pay out claims to policyholders. This money is collected in the form of premiums and is held in a fund that can be invested in various assets, such as stocks, bonds, and real estate. The longer the claims are delayed, the longer the insurance company can hold onto this money and invest it.

Buffett has used the float generated by the insurance companies under the Berkshire Hathaway umbrella to invest in various assets. By having access to this steady stream of funds, Buffett is able to make long-term investments without having to worry about short-term fluctuations in the market.

The float also acts as a form of low-cost financing for Berkshire Hathaway. Since the money is held in reserve to pay out claims, the insurance company does not need to borrow money at a high interest rate, which would eat into its profits. Instead, it can use the float to make investments at a lower cost of capital.

Additionally, the float generated by the insurance companies also acts as a “buffer” for Berkshire Hathaway’s other operations, providing a cushion for unexpected events. This is beneficial for Berkshire Hathaway as a whole, as it allows it to take on more risk in its other operations, knowing that it has a steady stream of funds to fall back on.

In the late 1990s, Buffett was accused of falling out of step with the market, as he avoided the dot-com boom and concentrated on more traditional investments. The weekly investing newspaper Barron’s wrote a famous cover story in December of 1999 titled, What’s Wrong, Warren?, questioning whether Buffett had lost his touch.

Buffett later stated that many of the dot-com companies were overvalued and that people were buying stocks without understanding the underlying business, which he compared to the mistakes that were made leading up to the 1929 Stock Market Crash. 

During the financial crisis of 2008, Buffett was vocal in his criticism of financial leverage and derivatives. He argued that they served no useful purpose for the economy and that they contributed to the financial instability. He also warned that the use of derivatives could lead to a “financial weapon of mass destruction.”

Despite that criticism and the financial crisis, Buffett remained optimistic about America’s future. He stated that “America’s golden goose of commerce and innovation will continue to lay more and larger eggs. America’s social security promises will be honored and perhaps made more generous. And, most important of all, America’s kids will live far better than their parents did.” He also made a series of large investments in American companies, such as General Electric, Goldman Sachs, and Wells Fargo, which he believed were undervalued due to the crisis. He also publicly voiced his belief in America’s resilience and long-term potential through various interviews, articles, and letters to shareholders.

This was a period where Buffett cemented his reputation as a buyer and lender of last resort. He has made several high-profile investments in companies that were facing financial difficulties, such as the banks mentioned above, Wells Fargo and Goldman Sachs. This reputation has been earned due to his willingness to invest in companies that are out of favor with other investors throughout his career, but that he sees as undervalued and with a strong future potential. The sizable insurance float Berkshire Hathaway had supported Buffett’s investing in these periods.

In recent years, Buffett has also voiced his skepticism towards cryptocurrencies like bitcoin, stating that they have no intrinsic value and that they are more of a speculative bubble. He has also been critical of professional fund management. He has stated that “when trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients.” Instead, he has encouraged investors to focus on the long term and to invest in companies that they understand and believe in. For retail investors, he has encouraged them to invest in low-cost index funds as the simplest way to maintain exposure to the market.

“Price is what you pay, value is what you get”, reflecting his focus on underlying value and fundamentals.

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”, reflecting his shift to focus on business quality over pure quantitative value. 

“Be fearful when others are greedy and greedy when others are fearful”, symptomatic of his willingness to invest in periods of market crisis.

Beyond the importance of focusing on long-term investments and companies with solid business models and economic ‘moats’, Buffett has emphasized the importance of understanding one’s own limitations and investing within one’s “circle of competence.” He believes that investors should stick to what they know and understand, rather than trying to invest in industries or companies that they are not familiar with. This approach allows investors to make better-informed decisions and to avoid mistakes caused by a lack of understanding. In his annual letters to shareholders, he repeatedly emphasizes the importance of this concept and encourages investors to focus on their circle of competence.

This has led to misses on Buffett’s part, however. He has been criticized for not investing in technology companies, for example, even as he has stated that it is not an area of his expertise and falls outside of his circle of competence. He has said that he does not understand the technology behind many of these companies and therefore cannot accurately value them. Despite this, he has made some investments in technology companies, such as IBM and Apple, where he believes he can understand the business and its future potential. While IBM was not a successful investment, Apple has become Berkshire Hathaway’s largest position by a wide margin.

For as successful an investing career as Buffett has had, he has also made some notable mistakes. One of his most significant mistakes was his investment in the airline industry, which he later admitted was a mistake and sold his stake. The airline industry bedeviled him again in the 2020s, as he dumped his newly established airline holdings again near the bottom of the COVID-19 market sell-off. By 2021 this looked like an overreaction, though subsequently airlines have struggled, meaning the jury is still out on this decision.

Related to Buffett’s circle of competence approach, he also regrets not investing in Google and Amazon earlier in their public history. He stated that they were outside of his circle of competence. Despite these mistakes, he has emphasized that one should learn from their mistakes and not let them discourage them from continuing to invest. Berkshire Hathaway now owns a small position in Amazon; invested in Snowflake, an upstart software company, at IPO; and of course has an outsized position in Apple.

• Warren Buffett’s net worth: Over $100B, primarily due to his ownership of Berkshire Hathaway shares, the company where he works as CEO and Chairman.
• Warren Buffett’s age: 92 years, turning 93 in August 2023
• Warren Buffett’s house: Warren Buffett lives in a relatively modest house in Omaha, Nebraska, where he was born. He has owned the house since 1958.
• Warren Buffett’s education: University of Pennsylvania (Wharton School of Business) and University of Nebraska-Lincoln for undergraduate study, Columbia School of Business for an MBA

Warren Buffett is now in his 90s, and questions have been raised about the future of Berkshire Hathaway after he is no longer at the helm. Buffett has stated that the company’s board is aware of the issue and has a succession plan in place. He has also identified his son Howard as a potential non-executive chairman, and Berkshire Hathaway’s current Vice Chairmen, Greg Abel and Ajit Jain as potential CEO candidates. Buffett specifically said that Abel would take over if Buffett were to suddenly be unable to serve as CEO of Berkshire Hathaway, though it is not clear if that remains the long-term succession plan. Berkshire Hathaway’s shares have performed better than the market over the past three years with especially strong relative performance as the bear market started in late 2021, a sign that this uncertainty may not be hurting the stock’s performance.

Warren Buffett’s legacy is one of consistent and long-term success in the world of investing. His approach to investing, which emphasizes value, patience, and discipline, has served as a model for many investors. He is also known for his commitment to philanthropy and his dedication to ethical business practices. His tenure at Berkshire Hathaway has created one of the largest and most successful companies in the world, with a strong culture and a long-term vision. His influence and impact on the business world will be felt for years to come.

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