"The Oracle of Omaha" known so for its ease to enter into businesses that rise like foam
Warren Buffett was born in Omaha on August 30, 1930, known for his loyalty to investment in value and for his personal simplicity, despite his immense fortune. His annual salary was around $ 100,000 a year, a figure that is low compared to high executive positions.
In his first years he learned from his father (broker) the operation of high finance.
I buy his first action at age 11 and still regret having started so late.
When he was 14 years old, he acquired a small farm from the savings of distributing newspapers. This probably aroused his interest in the media, where he later made several successful investments, including in the Washington Post.
He studied at the Nebraska school and then did a master's degree in economics at the columbia business school, where he met his tutor Benjamin Graham , with whom I work at Graham-Newman, learning his investment rules from his teacher.
From 1950 to 1956 Buffett increased his capital from $ 9,800 to $ 140,000, between these years in 1952 he married Susie Thompson with whom he later divorced in 1977, a divorce that affected his mood and was living as a vagabond at Doors of it for weeks, without barely a snack.
About 1952 he began working with Graham in an office, where they spent the days analyzing stock market reports. Although they both practiced the investing philosophy of value investing , there were some differences. While Graham relied heavily on a firm's balance sheet and income, Warren was also interested in other, more intangible elements such as the management team or brand.
In 1956 he founded Buffett Associates, Ltd . With its own dollars and another 7 partners, in which Buffett achieved a 251% profitability in 5 years, by 1972 the assets of Buffet Partnerships, Ltd. had grown by 1,156% compared to the Dow Jones, a 122, 9%.
In 1965 he acquired the Berkshire Hathaway textile company , which would later unify all his businesses, and soon began to invest in insurance companies.
In 1970 Buffet gives another turn of nut when converting its emporio; While the textiles contribute a meager $ 45,000, the banking and insurance divisions provide $ 2.6 and $ 2.1 million.
In 1976 he entered the insurer GEICO , another case similar to that of Berkshire ; A great company with a terrible management. Benjamin Graham died that same year. At the end of the 70s the fame of Buffet was such that the rumors of interest of the genius in some company fired its value almost automatically.
From 1969 to 2003, the Berkshire business had an average annual return of 22.2% annually.
Currently he still lives in the house I bought 50 years ago with 3 rooms located in Omaha, he says he has everything he needs, he does not have a driver and he walks in his car very humbly, he also does not have a cell phone or have a computer on his desk.
He is considered one of the biggest investors in the world, besides being the greater shareholder and Executive Director of Berkshire Hathaway . In 2017 he ranks second to Forbes magazine's list of the world's richest men behind Bill Gates and before the founder of amazon, Jeff Bezos with an estimated fortune of $ 75.6 billion.
Among the most important of your Investment Philosophy
- Do not do what others say, listen and draw your own conclusions, and do what you think best.
- Never invest in a business that you can not understand and is very complicated.
- Do not spend your money in unnecessary ways, spend on those things you really need.
- If you can not see a 50% drop in your investment without panicking, do not invest in the market.
- Buy companies with good profit history and market dominance.
- Always invest in the long term
- Look for companies with broad markets, strong brand image and loyal consumers.
Two rules
Rule 1
- Do not lose any of the money from your shareholders
Rule 2
- Do not forget rule number 1
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