BIOGRAPHY :

Warren Edward Buffett is a business tycoon, consistently ranked among the richest people on the planet, head of the investment and financial holding Berkshire Hathaway, author of textbooks on the principles of investing, philanthropist. In 2010, he came up with an unprecedented initiative. He called on world business leaders to take the so-called “Giving Pledge”, that is, to sign a pledge that they will spend more than half of their income on charity. In 2016, the number of people who signed this document reached 154.

In 2015, Warren was third in the ranking of billionaires according to The Bloomberg Billionaires Index, behind only Microsoft co-founder Bill Gates and the owner of the clothing manufacturer Inditex, Amancio Ortega. In the first 6 months of 2016 alone, his fortune grew by $2.7 billion and was estimated at $65 billion (against 89 Gates and 73 Ortega), and the amount of donations to philanthropic organizations, primarily to the foundation founded by Bill and Melinda Gates, amounted to $2.9 billion. A talented entrepreneur and intellectual, who has amazing intuition and even received the ironic nickname “Oracle”, is known for his commitment to long-term investments and personal frugality. As for political preferences, during the 2016 presidential election campaign he actively supported and sponsored Democratic candidate Hillary Clinton. CHILDHOOD AND FAMILY OF WARREN BUFFETT The future legendary investor was born on August 30, 1930 in Omaha, Nebraska, in the family of a stock trader, later a congressman, and a housewife, a former fashion model. The couple had two more daughters – the eldest Doris and Roberta, the youngest child in the family.

His father’s profession influenced his son’s passion for finance. Already at the age of 6, he surprised his parents with his intelligence – he bought several cans of Coca-Cola and sold them to his family for twice the price. At the age of 11, pooling his savings with his sister, he purchased 3 shares of the Cities Service company, which supplied gas to city houses, on the stock exchange. Their price initially dropped, causing him to worry, and then rose from $38 to $40. At this point, Warren rushed to sell the shares and made a small profit, but soon regretted it bitterly, since later the value of the securities increased 5 times. This experience forced him subsequently to be more balanced, take his time and always give preference to long-term investments.

When his father entered Congress in 1942, the Buffetts moved to the US capital. In Washington, Warren continued his studies at school. He did not abandon business experiments either. At first, the boy became a Washington Post delivery boy and saved $1.2 thousand in a year. He used it to buy a plot of land of 40 acres (about 16 hectares), which he began renting out to farmers.

At age 15, the young entrepreneur and a friend invested $75 in buying three used pinball machines and installed them in hair salons. Soon after this, the teenager announced to his family his intention to become a millionaire by the age of 30. Looking ahead, we note that his prediction was fulfilled almost on time – at the age of 31 he became the owner of a million-dollar fortune. EDUCATION OF WARREN BUFFETT At the insistence of his parents, in 1947, the young man entered the financial school of the University of Pennsylvania. He himself would prefer to focus on his business projects and not waste time on studying, but his father convinced him of the need for a decent education.

After his father’s resignation from Congress in 1948, the family returned to their hometown, and the young man transferred to the University of Nebraska-Lincoln, where he received a bachelor’s degree in business administration in 1949. Then there was an unsuccessful attempt to continue his studies at Harvard, after which the future billionaire successfully became a student at Columbia University Business School, where at that time the famous economist Benjamin Graham, the founder of the concept of value investing, taught. By 1951, Warren had acquired a master’s degree in economics. In addition, he was a free student at the New York Institute of Finance. WARREN BUFFETT’S BUSINESS

Upon completion of his studies, the future financial tycoon worked at his father’s company, Buffett-Falk & Co., then at Graham-Newman Corp. his mentor Benjamin Graham. He later called acquaintance with his book “The Intelligent Investor” the most useful experience of those years.

In 1956, in partnership with friends and seven relatives, he founded the investment firm Buffett Associates. His investment decisions were almost always correct and consistently brought dividends to all shareholders. In 1962, he began buying up securities of the Berkshire Hathaway textile factory, which was close to bankruptcy, and after 3 years he became the holder of 49 percent of the shares and at the same time its director. Subsequently, thanks to re-profiling and wise investments, the company acquired the status of one of the leaders in the financial market, and its value was estimated at $360 billion. The meeting of shareholders of The Berkshire Hathaway annually attracts about 20 thousand guests, for which it received the humorous nickname in the press “Woodstock for capitalists”

Today, Warren Buffett’s investment portfolio includes shares of many well-known international corporations: Coca-Cola, American Express, McDonald’s, PetroChina, Iscar Metalworking, Kia Motors and others. In 2009, he became the owner of the transcontinental railroad BNSF Railway. In 2010, the billionaire committed the most generous and unprecedented act in history – he donated more than half of his capital, about $37 billion, to charity.

In 2011, Warren invested more than $10 billion in IBM, buying about 6 percent of the shares of this major software developer. According to Forbes, the legendary entrepreneur’s daily earnings averaged $37 million in 2013. WARREN BUFFETT’S PERSONAL LIFE In 1949, young Warren was infatuated with a girl whose boyfriend played a miniature ukulele guitar. In an attempt to compete with his rival, he also acquired one of these musical instruments and learned to play it. And although he failed to win the beauty’s heart then, his love for playing the ukulele became a part of his life.

At age 22, he married Susan Thompson. The couple raised three children – Susie, Howard and Peter, but after 25 years of marriage they began to live separately, although they did not officially divorce. In 2004, Susan died of cancer, and 2 years later the financier remarried his longtime friend Astrid Menks. He was then 76 years old, and his bride was 60. The oligarch is unpretentious in everyday life, conservative, loves to play bridge, allegedly spending at least 12 hours a week on this activity. He is a devoted fan of Nebraska football, where he was named an honorary assistant coach. The head of the financial empire lives in the central district of his hometown in a house purchased back in 1958 for $31.5 thousand. In addition, he owns a $4 million home in Laguna Beach, California. In 1989, he bought a personal jet for $6.7 million, but later called this acquisition an unjustified waste of money.

After his son’s adopted daughter, his beloved granddaughter Nicole, starred in Jamey Johnson’s documentary The One Percent, which chronicled the brutal financial stratification of society, Warren disowned her relationship and withdrew financial assistance. In April 2012, one of the most famous investors in the world fell ill with prostate cancer. Doctors successfully completed the treatment of this serious disease in September of the same year. WARREN BUFFETT TODAY In 2015, in partnership with Alessandro Proto, the Italian billionaire and alleged inspiration for the protagonist of E. L. James’ erotic bestseller Fifty Shades of Grey, he purchased the Aegean island of St. Thomas for €15 million. The money guru believes that there are plenty of opportunities in Greece, so many people will be willing to invest in local land and real estate. Both businessmen intend to engage in luxury real estate there.

Until recently, the legendary investor was in no hurry to invest money in enterprises specializing in the development of advanced technologies. He invested in transport, insurance businesses and many industries. However, at the beginning of 2016, he already owned 10 million shares of Apple with a total value of $1 billion, and in August he increased his stake in the American IT corporation to 15 million ($1.6 billion).

Career:

In parallel with his studies, Warren Buffett established the financial agency Buffett-Falk & Co, where he worked from 1951 to 1954 as a simple salesman. From 1954 to 1956, he sold the office and worked for Graham-Newman Corp. as a securities analyst. In 1957, he created Buffett Associates and came up with a new rule: before buying a company, you should find out everything, right down to the biography of the founders and managers.

Six years earlier, in 1951, Buffett bought Geico, an insurance company whose directors included Benjamin Graham, and incorporated it into Buffett Associates. Meanwhile, the office’s portfolio shows incredible liquidity (+1,122% over 10 years versus +122% for Dow Jones), and Warren Buffett has a new postulate: the best time to sell shares is never, and capital investments are everything! In 1954 Buffett forms a partnership with his mentor, Graham, but despite their success, they part as enemies in 1957. The reason was Graham’s excessive rigidity in business and rejection of simple human relationships.

Immediately after this, Buffett forms six investment partnerships, where he puts at the forefront a new theory: with people you need to be extremely flexible and play by their rules.

Of course, talking about the honesty of the richest man in the world is not entirely correct. In 1965, he approached the owner of the unprofitable Berkshire Hataway factory with a proposal to “unwind” the business in a couple of years. He agreed, and Buffett set a condition: he and CEO Seabury Stanton must buy back the company’s shares. Starting at 7.60 per share, they bought more and more, bringing the price to 14.86 (the real cost of the securities was $ 19), until Buffett acquired a controlling stake. At the next meeting of directors, he removed Stanton from participation in the company’s affairs and offered to sell his stake for pennies. Buffett’s postulate: whoever owns a controlling stake owns everything. When he talks about maximizing the retention of shares, Buffett is not lying. Having purchased a stake in the Washington Post Company in 1973, he still holds it. The portfolio includes ABC Capital (1979), Salomon Inc (1987) and Coca-Cola (1988).

But the investor does not believe in high technology out of principle, and swears that he will never invest money either in Microsoft Inc (Bill Gates is offended), or in microprocessors or conductors. A catchphrase comes to the rescue: I don’t invest in what I don’t understand, and I can’t predict success in 10-20 years.

Warren Edward Buffett Warren Buffett became a billionaire in 1990 when he took Berkshire Hataway to an IPO. After a series of high-profile mergers, scandals and corporate raids (capital allows), his investment company became the most valuable in the world, showing a capitalization of $328 billion.

By 2007, the price of just one share of Buffett’s Berkshire Hathaway was $140,000.

During the 2007-2008 crisis, after spreading information about losses of $77 billion and talking about “historical justice” (and seriously lowering the price of his shares), Buffett bought a controlling stake in the leading investment bank Goldman Sachs for $10 billion. Also, the brainchild of the great financier received the right to purchase a stake in General Electric with a total value of $3 billion. In the same year, Buffett was named the richest person on the planet. In 2009, Buffett bought BNSF Railway, the second largest transcontinental railroad in North America. It is laid across 28 states in the central region and the west coast of the United States, and also partially extends into Canada. The total length of the Class I road is 52.3 thousand kilometers, its fleet includes 7 thousand locomotives, and all enterprises employ more than 40 thousand employees. The company’s office is located in Texas, and its purchase cost Buffett $26 billion.

And while the American media were writing about this, the investor suddenly bought a 5.5% stake in IBM (10 years earlier he swore that he would not invest in hi-tech) and the Media General corporation, which manages 63 newspapers in the southeastern United States. Another legendary phrase came to the rescue: when talking about one thing, try to do something else! It is no coincidence that in the 2nd quarter of 2014, when there was talk of an imminent fall in Asian and European indices, Berkshire Hathaway showed a net profit of $6.7 billion.

Perhaps Buffett’s secret is that he never changed his simple rules:

1. Don’t lose money. Approaching investments like a casino is unacceptable. Always do your homework before investing your money. Invest only in companies that you have researched and whose business you understand thoroughly.

2. Never forget rule #1.

3. A successful investor does not focus on the majority opinion or opposing that opinion.

4. Never invest in something you don’t understand. Buffett is famous for not investing in technology because he believes he doesn’t understand it. The only exception is Apple stock.

5. If a company has a good growing business, then its share price will eventually rise as well. Buffett agrees with Graham that by buying a share of a company, an investor becomes a part owner of it and should therefore be confident in its long-term growth. And to do this, he must check how stable the operating activities are, what operating profit and cash flow the company generates, whether it is a leader in its segment and how professional its management is. If a company’s capitalization is smaller than the business it is involved in, Buffett will definitely pay attention to it.

6. The market may be wrong.

7. It is better to buy an excellent company at a fair price than an average one at a discount.

8. Favorite investment period is eternity. How long should you keep a stock in your investment portfolio? Buffett believes that if you’re not sure you want to own a stock for ten years, don’t buy it for even ten minutes.

9. Sometimes the best thing to do is to do nothing. In other words, don’t be afraid to walk away from unsuitable investments.

Warren Buffett often finds investment ideas in everyday life. One famous example is Coca-Cola. A big fan of soda, Buffett was loyal to Pepsi for a long time – right up until he tried cherry cola. He remembered donating soda cans as a child—almost all of them Coca-Cola. After all, ask anyone to name a soda brand without thinking twice. In most cases, the answer will be Coca-Cola.