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A Remarkable Journey of Warren Buffett Investments


There’s a saying that “People do not decide to become extraordinary. They decide to accomplish extraordinary things”.

This is what made Warren Buffet an extraordinary person, which he is now.
A man, with the net worth of $89.9 billion, making him the World's third-richest man. Warren Buffet investments had poured him a lot of success.

Being extraordinary or doing an extraordinary thing isn't rocket science. It just needs the right mindset.

A person can do much so much in his life, but with just a right mindset. Confusions and hurdles are always going to be there.
But, overcoming with these hurdles, will make you stand out differently in this world.

He is such a confident personality as he quoted, that, I always knew I was going to be rich. I don't think I ever doubted it for a minute”, and thus he succeeded in this.

And, this was what Warren Buffet started doing as a child

A PRODIGY CHILD

Childhood is a time when almost every child likes to play, watch television, basically enjoying their life at its best.
Warren has a different scenario. He was a child who instead of playing games, played with numbers. Instead of watching television, did a lot of reading. He enjoyed reading books like One Thousand Ways to earn $1000.

These were the kind of books in which he gained more and more interest. He was so intelligent that he could easily keep a track of mathematical calculations.

For him, the definition of fun was quite different. At a small age only, he used to find doing small businesses very interesting.

At the age of seven only, with his prodigious mind, Warren started a pinball business. He had this idea that installing pinball machines at the barbershops would be a major source of revenue. As people might get bored while waiting in the queue and with this, they will have some sort of entertainment. And, he will have his business.

Warren had a business mind, from his childhood only. After getting great success in this small business he started doing more things. Like, he started selling door to door newspapers, chewing gums and his favourite Coca-Cola.

By the age of 14, he had enough savings, through which he could afford to buy the property of 40 acres. He first, invested in the stocks when he was just 11 years old. In such an age where kids probably don't know what a stock market is, he had already invested in one.

Amazing. Isn’t it?

The reason for him being quite different was his keen interest in reading and getting enlightenment from wherever he can. According to him, "Read 500 pages like this every week. That’s how knowledge builds up, like compound interest.”

Howard Buffet, the role model and an amazing father, of Warren buffet have supported him a lot in his life. He himself used to work in a stock brokerage firm, but later from his savings, he opened his own stock brokerage firm.
 Warren learnt a lot from him and saw how the brokerage firm work.
Known as fireball, by his father, Warren established ways to make him more and more proud.

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EDUCATION WAS NEVER COMPROMISED

Warren's interest in business and finance kept on increasing. He became more and more curious. With such curiosity, he completed his graduation from the University of Nebraska.

A book called The Intelligent Investor made him more anxious that he planned to do further education from the University of Columbia.
Why the University of Columbia?

Well, he was so fascinated by the book, The Intelligent Investor, which was written by Benjamin Graham.

Benjamin Graham, for Warren, was like a sapling for a plant.

Warren regarded him a lot as well as his philosophies.
Benjamin was the one who taught Warren about value investing.
He preached him the importance of understanding a company’s intrinsic value.

This mathematical approach appealed to Buffet’s sense of numbers. Even after completing his Master’s, he kept in touch with Graham by writing him about various investment ideas and for share market basics.

The education of Warren Buffet is best understood as a synthesis of two distinct investment philosophies from the minds of the two legendary figures. One is Benjamin graham and other is Philip Fisher.

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Initiation of Warren’s Career

With the mentor, he adored the most, Warren got an opportunity to work with him.
He worked as a security analyst at the Graham-Newman Corporation. But soon, the company was disbanded as Graham got retired.

But Warren did not stop here, as he went back to Omaha.
With the immense knowledge he received from Graham, he began a limited investment partnership. By now, he was 25 years old.

This investment partnership was getting an amazing bloom in the market. Buffet not only focused on himself but also on his partners.

As he promised his partners, “our investments will be chosen on the basis of value not popularity”. With such incredible thinking, he became a person, who became demanded at that time to manage people's investment. With warren buffet investment strategy he gave his partners full support.

By 1962, he started buying shares of the Berkshire Hathaway, which was an ailing textile company.
And, by 1969, he decided to end the partnership.

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Berkshire Hathaway

Being one of the largest textile company, Berkshire lost its limelight in the market. As their business was slowly and steadily deteriorating.

Stockholder’s equity had dropped by half and loss from the operation also exceeded by $10 million.  Due to which, the company started giving away their textile mills and started repurchasing the company's shares from the stockholders.

Warren still invested in a major part of the Berkshire Hathaway stock price. He continued buying more and more shares. As he believed that some profits could be attained from the textile business.

He figured that the management was planning to close the company, and when the company will sell out their remaining textile mills, then the company will surely buy back the shares, and then he can get a better price.

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An emotional decision he took

Warren always says that “The greatest enemies of the equity investors are the expenses and emotions”.
Warren made a deal for $11.50 for selling out his share, and the company also agreed with the price.

But later the company's management tried to trick him by providing him with an agreement of $11.375. Due to which Warren got angry for being cheated and rejected to sell his shares and started buying more stocks.

This decision was made emotionally, but he converted his mistake into a big business.

Later he gains full control over the company buy buying more Berkshire Hathaway stock. He made Berkshire Hathaway into a Holding Company.

Difficulties and emotions might become an obstruction to the path you are leading on, but overcoming it can help you conquer all such obstructions.

A PHILANTROPHIST BY HEART

“Your greatness is not what you have, it’s what you give.”

This ideology is well suited for Warren Buffet. He is a person who feel happy by doing the work of philanthropy. Warren buffet net worth being $89.9 billion didn’t stop him to do charity.

The most pronounced charity done by him, was the pledge of $37 billion, for the Bill and Melinda Gates Foundation. This donation he made, was in 2006, and will take effect after his death, according to his will.

Buffet, has a keen interest in doing charity and solving the issues like global health and educational problems.
It was this interest which let him to actively promote the foundation and encourage others to contribute, especially those with high-value estates.

Not only this, he has also given same values to his children, and encourages them for doing philanthropy.

According to Berkshire Hathaway, Warren has also donated $3.4 billion of company stocks to five charities. He has also made enormous donations for his own foundation, in the name of his wife, along with certain charities done by his children.

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CONCLUSION

Today, leading the Berkshire Hathaway as the CEO, which owns more than 60 companies within it, Warren Buffet has reached the pinnacle of success.

From being a child who had an interest in finance and business, to becoming an idol for people, he has outshined himself in front of the whole world.
 He has achieved a lot in his life and is continuing to do so. From selling newspaper, Coca-Cola, and chewing gums, to buying the share of these companies, He as a person has outgrown a lot.

He could see his dreams come true and the dreams of his employees.
And, is still fulfilling them.
He is so down to earth, that, even being the world third richest man he still lives in the same house he bought initially.

Simplicity, passion to work, and intelligence are what makes him the man he is. Being 88 doesn't stop him from working, which is the best quality he has. He regularly goes to the office, with his favorite business partner, Charles Munger, who is 93.
He enjoys having Coca-Cola with him, just like regular friends.

Not only this, he still enjoys eating food from McDonald’s, rather than eating in a fancy restaurant. Also, he still drives his own car, instead of owning a driver.
And, among all, he still lives in the same house which he brought in 1958 for $31,500.
All this shows how down to earth he is.

He also believes that one should always remember where they came from. He quotes that, someone’s sitting in the shade today because someone planted a tree a long time ago.”

With such an amazing ideology, he is pioneering in his life.

People need more inspirations like him. As being rich is easy but being rich and making others equal as you is also important.

Even in today’s economic climate, when so many investors and major companies are failing, Warren Buffet continues to be successful in all aspects of life.

And this is what, Warren Buffet is all about.

By Anjali