Warren Buffett
In terms of money, the most successful investor is without doubt Warren Buffett. Worth an estimated $62.0 billion (as of March 2008), he the world’s richest person, surpassing his good friend Bill Gates, founder of Microsoft and the Mexican multimonopolist Carlos Slim Helú.
Buffett bought his first share aged 11, with moderate success. He discovered passive income when he and a friend started buying and installing pinball machines. With the returns from this early enterprise he bought a piece of farmland to rent to farmers.
Aged 20, Warren Buffett went to Columbia Business School to receive class from Benjamin Graham, whose book The Intelligent Investor is the basis for Buffett’s investing strategy. Some time after graduating, he was offered a job at Grahams’ partnership. Two years later this partnership was closed.
Warren Buffett then started Buffett Associates, Ltd. After he closed this partnership 11 years later, it had earned an astonishing return of 2610.6%. Some years before, Buffett Associates had focused its attention on a textile company named Berkshire Hathaway. Buffett remained involved in the company and eventually became its CEO.
Berkshire Hathaway transformed into a holding company and started acquiring businesses that were managed well and had a ‘moat’, a big competitive advantage. Even today, all companies acquired need be understandable by even a fool, thus they are often in insurance, retail, media or production. Buffett said that although it is a great company, he would never buy an interest in Microsoft because he can’t predict where it will be 10 years from now.
Buffett now is a multibillionaire, but he still lives in a $700,000 house he bought half a century ago in Omaha, Nebraska. His CEO salary is just $100,000 but he has a corporate jet he calls “The Indefensible”.
Opposed to heritage, Warren Buffett has pledged to donate all of his Berkshire stock to the Bill & Melinda Gates Foundation. Each of his childrens’ charities received $1 billion.
Based on our first article, Warren Buffett, the great investor.
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