What's Special About: WARREN BUFFET?

Why Warren Buffett Is So Successful

 

Warren Buffett is an American investor, business magnate and philanthropist. Buffett is the CEO and Chairman of Berkshire Hathaway, the most successful investor of the 20th Century and he is consistently ranked among the world’s richest people.

Buffett has been consistently referenced for his investing prowess, his frugality and his amazing philanthropic work. He plans to give away ninety-nine per cent of his billions to charitable causes.

Warren Buffett’s Early Years

Even as a young boy Warren Buffett displayed skills in making and saving money. He would sell Coca-Cola, chewing gum and magazines door-to-door and he worked in his grandfather’s grocery store. In high school Buffett was making money through the sale of stamps and newspapers among other things. When completing his first ever income tax return, at the age of fourteen he took a $35 deduction for using his watch and bicycle on his paper route. At the age of fifteen Buffett pooled his resources with a friend to buy a pinball machine and place it in a Barbers. After a few months they owned several machines across several shops.

Warren Buffett’s estimated net worth is$73.3 Billion.

Buffett’s interest in investing in the stock market also started as a schoolboy when he would spend time in the client lounge of a regional stock brokerage office near his father’s office. At ten years of age he visited the New York Stock Exchange and at eleven he purchased three shares of Cities Service for himself and three for his sister. In high school, he invested in a business that his father purchased and also bought a farm that was worked by a tenant farmer.

At nineteen Buffett graduated from University with a Bachelor of Science degree in business administration before progressing to earn a Master’s in Economics from Columbia after being rejected by Harvard Business School. He chose the Columbia Business School after finding out that Benjamin Graham, a well respected investor worked there.

Warren Buffett’s Career

When Buffett graduated, Graham refused to hire him, saying that he should avoid a career on Wall Street. This was something that Buffett’s father agreed with and Buffett returned to his hometown of Omahato work for his father’s brokerage firm. Shortly after Buffett’s marriage, Graham had a change of heart and offered him a job in New York.

Once he had arrived in New York, Buffett had the opportunity to test and develop the theories he had learned from Graham during his studies. The centrepiece of these theories was ‘Value Investing‘ which involved looking for stocks that were selling at a large discount when compared to the value of their underlying assets. Buffett took on this concept and made it his own by looking beyond the numbers and considering the company’s management team and their competitive advantage in the marketplace.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett

Buffett launched Buffett Associates Limited in 1956 on his return to Omaha. By 1962 Buffett was already a millionaire and went on to enter into a collaboration with Charlie Munger. This partnership resulted in the two of them developing an investment philosophy based on Buffett’s broader view of value investing. They purchased Berkshire Hathaway, a struggling textile mill on this journey and what looked like a classic Graham style value move actually turned into a long term investment when the business showed signs of improvement.  They used the cash flow from the improving textile business to finance further investments with the original business surpassing the other holdings. Buffett closed the business in 1985 but chose to keep the now famous name.

Becoming a Billionaire

The Warren Buffett investment philosophyevolved to be based on the idea of purchasing stock in well run, undervalued companies with the intention of holding the securities indefinitely. Giants like Coca-Cola, American Express and the Gillette Company all met his criteria and remained in the Berkshire Hathaway portfolio for many years. In several cases he bought the companies outright and let their management teams carry on running the companies. Companies that are in this category include See’s Candies, Fruit of the Loom, GEICO Auto Insurance and Dairy Queen.

Buffett became a billionaire when Berkshire Hathaway began selling class A shares in the middle of 1990 with the market closing at $7,175 per share. His reputation remained solid until technology stocks increased in popularity. As a self-confessed technophobe, Buffett opted out of the incredible rise of technology stocks during the latter part of the 1990’s and decided to continue to only invest in companies that met is criteria. Buffett was heavily criticised for this but many of the Wall Street experts responsible for this criticism went bankrupt when the dotcom bubble burst and Buffett’s profits doubled.

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” –Warren Buffett

Frugality and Philanthropy

Even though Warren Buffett is one of the wealthiest people on the planet he has remained extremely frugal. He continues to live in the house that he purchased in 1958 for $31,000, he eats at local diners and still opts for simplistic, wholesome meals. He really didn’t want to buy a corporate jet and when he finally did, he named it ‘Indefensible’.

Running parallel to this frugality is Buffett’s philanthropic nature. In 2006, he made the stunning announcement that he was going to donate the vast majority of his wealth to the Bill & Melinda Gates Foundation which aims to conquer global health issues. Buffett’s total donation to the foundation numbers around the $37 Billion mark and he his donating the rest to three charities run by his children along with a donation to honour his first wife.

Conclusion

Warren Buffett is the best example of how finding a winning strategy and continuing to use and develop that strategy, (as long as it keeps winning) can generate extraordinary results.

Still, perhaps the most remarkable part of Warren Buffett’s fortune is that he plans to give most of it away. He is going to leave a legacy that will have a positive impact on the world and that is bigger than any car, home or jet that money can buy.

Adapted from:Entrepreneurs

Which President was The Shoemaker's Son?

Sing your own song!
Dance your own dance!
Give the world a gift of you!
Do something that comes out of you!
Give the world a gift of you, bring forth treasures from your heart!

So many had been incapacitated trying to prove a point to men, trying to assert themselves, when they could express themselves, the gift of their life expressed daily which will result in true joy and fulfilment.
If only we would shred inferiority complex, which is simple, in about two decades, the next generation will be free of it. And people will express their creativity. There will be amazing shoemakers, musicians, painters, engineers, carpenters, ...gifted men emerging across the world! There will be all form of creativity, innovations... nobody will be competing unhealthily with another, but simply doing their best, just joyful and living fulfilled.

There is no joy in unhealthy compettion, the joy is not in coming first, the joy is in doing it!
Its not outside the act, it is intrinsic to the act!

When Abraham Lincoln became the President of America, his father was a shoemaker. Naturally egoistic people were very offended that a shoemaker's son should become the president of America. They were aristocrats, super-rich, who thought that it was their birthright to be in the highest position.

On the first day, when he was going to give his inaugural address to the Senate, just as he was going to stand up, one ugly aristocrat stood up and he said "Mr. Lincoln although by some accident you have become the president of country, don't forget that you used to come with your father to my house to prepare shoes for our family. And there are many senators who are wearing the shoes made by your father"

He was thinking he can humiliate him.

Abraham Lincoln said something which should be remembered by everyone. He said "I am very grateful to you for reminding me of my father just before I give my address to the Senate. My father was so beautiful, and such a creative artist-there was no other man who could make such beautiful shoes. I know perfectly well that whatever I do, I will never be such a great president as he was a great creator. I can not surpass him.

But by the ways, I want to remind all you aristocrats that if the shoes made by my father are pinching you, I have also learned the art with him. I am not great shoemaker, but at least I can correct your shoes. You just inform me, I will come to your house".

There was a great silence in the Senate, senator understood that it was impossible to humiliate this person. Only small people, suffering from inferiority, can be humiliated; the greatest of human beings are beyond humiliations.

Although, he was the President of America, he was ready to make another pair if there was a complaint.
The man looked silly. Lincoln insisted, "You have to speak! Why have you become dumb? You wanted to make me a fool, and now, look all around: you have made a fool of yourself"

The whole Senate was dumbstruck, but soon laughter turned into sincere applause.

Remember, no one can hurt us without our consent.
It is not what happens to us that hurts us, it is our response that hurts us. There are people out there whose only job is to hurt others. Don't give them a reason to have so much work on their hands.