In 1962, Warren Buffett, an unknown Omaha, Nebraska stock investor, purchased controlling shares of textile company Berkshire Hathaway. The company, founded in 1888, was already failing, but its $50 million balance sheet caught Buffett’s eye. Warren Buffet at 90 reflects on his life.
Like what you do
Buffett later admitted he hated the textile business. As CEO he dumped the textile mills and transformed Berkshire Hathaway into one of the world’s largest holding companies.
Today, Berkshire is the parent company to GEICO, Fruit of the Loom and Dairy Queen, among other iconic brands. As of Sept. 18, 2020, Berkshire Hathaway had a market capitalization of $521.57 billion, making it one of the largest publicly traded companies worldwide.
Warren Buffet at 90
At 90, Buffett has a net worth of $78.9 billion as of August 2020, making him the world’s seventh-wealthiest person. He was higher up on the wealthiest list before pledging a large portion of his fortune to charity.
Yet he still lives in Omaha, in the house he bought in 1958 for $31,500.
Despite Buffett’s great wealth, his folksy image and frugal lifestyle appeals to investors. Berkshire’s annual meetings in Omaha draw more than 20,000 people. Many of whom can probably not afford the stock’s $320,000/share price. But anyone can ask the “Oracle of Omaha” a question.
In 2004, Justin Fong, a 14-year old from California, asked Buffet what advice he would give a young person on how to be successful.
Buffett replied, “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.” Words to live by.
Buffett attributes his success to “value investing” — buying solid companies when they are out of favor, and down in price. Analytics may criticize his method, but it is hard to argue with the results. He has beaten the market average by something like 1000-1500 basis points per year, on average, over decades.
Buffett’s annual letters to Berkshire stockholders are scrutinized for hints to his current investment strategy. This year he recommended his stockholders purchase jewelry from Borsheims, an independent Omaha jewelry store, and car insurance from GEICO. Make of that what you will.
Buffett is a notable philanthropist, having pledged to give away 99% of his fortune to philanthropic causes, primarily via the Bill & Melinda Gates Foundation. He founded The Giving Pledge in 2009 with Bill Gates.
Some highlights of Buffett’s life:
1941—11-year old Buffet buys three shares of Cities Service Preferred stock
1949 – Graduates from the University of Nebraska, after transferring out of the University of Pennsylvania’s Wharton School
1949 –Harvard Business School rejects Buffett
1951 – Graduates from Columbia University School of Business
1952 – Marries Susan Thompson. The couple have three children before separating in 1977.
1962 – Becomes a millionaire after Berkshire Hathaway share purchase
1970 – Becomes chairman and largest shareholder of Berkshire
1990 – Becomes a billionaire when Berkshire Hathaway begins selling class A shares on May 29
2004 – Susan Buffett dies of a cerebral hemorrhage
2006 – Marries longtime companion Astrid Menks
You may be surprised to know Buffet:
Learned to play the ukulele to court Susan and still plays.
Remained close with Susan until her death. They signed their Christmas cards “Love Warren, Susan and Astrid.”
Plays bridge 12 hours a week, often with Bill Gates.
Is a dedicated, lifelong follower of Nebraska football and attends as many games as his schedule permits.
Loves Coca-Cola (he’s a shareholder) and agreed to have his likeness placed on Cherry Coke products in China.