Key points in this article:
- Born in a privileged family, Buffet’s family had a good connection to access to the stockbrokers of that time.
- He made his fortune through a hedge fund and got a job with Benjamin Graham whose idea still works today in value investing.
- Could have hands-on insider trading, and had a top-tier private jet membership which made him go anywhere anytime.
- Buffet owns a home in Orange County worth millions and his old house would cost around 250k in today’s inflation.
- All the shares of Berkshire Hathaway that he gave to his children would be worth 50 million dollar today.
Warren Buffet’s Investment Journey
Warren Buffett, a well-known stock investor, had a unique style of choosing stocks. As of 2022, he is known as the world’s seventh richest person and holds a high amount of share of Berkshire Hathaway. Nowadays it’s a cliche to say that Buffett is one of the richest people in the world and a well-known philanthropist. He is in charge of the growth of a conglomerate with holdings in the media, insurance, energy, and food and beverage industries.
Early Life and Education
Since as a result of growing up in a family of businesspeople, he acquired a great understanding of business and investing. The book called “One Thousand Ways To Make $1000” served as his inspiration when he was as early as seven. Then he started to work with how other young kids on the block did–– selling chew gums and coca cola. When he graduated from the University of Nebraska with an honours degree in business administration, he already had a good knowledge of investments. Later, he enrolled at Columbia Business School and graduated with a master’s degree in economics.
Working as a paperboy, he sold his horse racing tip sheet. He bought a pinball machine for $25, and with its profit, he bought more devices in the next few months. Before he sold the business for $1,200, Buffett had machines in three different places. When he was 20, he had already saved ten grand.
An Eventful Career
In 1954, Benjamin Graham’s partnership hired him. Buffet started running a few more collaborations, and by the end of the decade, he was on the list of a millionaire. He merged all the partnerships into one, put his money into Berkshire Hathaway, and changed the company’s focus from textiles to insurance.
After buying a 12% stake in Salomon Inc in 1988, Buffett started buying shares in the Coca-Cola Company. He spent $1.02 billion to buy up to 7% of the company. It turned out to be one of the best investments Buffet had made. By April 2006, he had made more than two billion.
One of the most significant ideas that Warren Buffet possessed was his philosophy on investment. He would go with the idea of “put all the eggs in one basket and watch it closely.” At first, he would go with Benjamin Graham’s theory and sell stock as soon as it was profitable. During this journey, Buffet realized that stock prices would soar far above when Graham unloaded them. It was as if they jumped off the train early before reaching its destination. Holding right and holding tight was the main principle of Buffet. When Graham sold the same stock for 16 million profit, Warren Buffet held it until 1.4 billion profit.