The names of Henry Ford, John D. Rockefeller, Cornelius Vanderbilt, J.P. Morgan and Andrew Carnegie conjure up images of financial success, wealth and a legacy of intelligent business and fruitful investments. These gentlemen are considered to be amongst the most influential personalities in the world of finance, and rightly so, due to their place in history and the road they paved for many to come. You would be hard-pressed to find any aspect of finance or even modern culture that has not been influenced in some way by the work of these men.
As times change, so do business challenges and finance rules and conditions. In the same manner that these men forged an enduring legacy, new names stand out in our generation as role models to emulate and strategist to follow. When we think about success in modern times, we must give credit to today’s contemporary titans on finance, and one of those names is the “Oracle of Omaha”, the gentleman we know as Warren Buffet.
Warren Edward Buffett was born in Nebraska on August of 1930. Second of three children and only son to Howard Buffett and Leila Stahl Buffett, young Warren showed a keen interest for business at an early age. He began by working as a paperboy and buying 6-packs of soda cans and selling them by the unit at a profit. It is said that at 11 years old he made his first investment after visiting the New York Stock exchange and buying three shares of City Services Preferred. The Stock quickly fell to $27 a share, but he held on and sold when they reached $40, only two more dollars than what he had originally invested. Later the shares shot up to over $200, teaching Buffet a lesson in patience in investing.
His job at running a paper route would eventually give him enough money to buy a few acres of land and rent them for a profit at age 14, but it wasn’t until after his father was elected to the U.S. House of Representatives and the family moved to Virginia, that Buffett started his own business with a friend during high school. The boys bought an old pinball machine and installed at a local barbershop. The profits allowed them to buy more machines and after a few months they had them installed at different locations. Buffet sold the business for $1,200 eventually.
Education wasn’t really his priority.
Only after being convinced by his father, did Buffet enroll in college for a short while and left the University of Pennsylvania, unimpressed after only two years there. He did graduate from the University of Nebraska and once again with his father’s encouragement applied to Harvard Business School but was rejected supposedly for being too young. He was accepted in Columbia where he studied under the widely recognized Benjamin Graham who became his most profound mentor and influence. After graduating, Buffet returned to Omaha to work in his father’s brokerage firm and married, but was eventually hired by his tutor Graham and moved to New York with his family.
The beginning of a career.
Buffet moved to different cities and by 1957 he operated three different partnerships. He returned to Omaha and bought the house where he still lives today. He was extremely successful identifying undervalued companies and thus making sound investments for the long term. In the early 60’s he bought Berkshire Hathaway, a textile-manufacturing firm that eventually became the American multinational conglomerate holding company that is today.
Buffett has remained true to his philosophy of investing in companies that are well managed and posses what he calls an “intrinsic value”, meaning that the value of their goods or services seems underappreciated in his eyes. This has been the case of companies like Coca-Cola, Gillette and American express, brands that continue today as being part of Berkshire Hathaway’s portfolio.
Personal life and legacy.
One of the most well known quirks about Warren Buffet is his frugality. Despite being a one of the most powerful men alive and having a net worth of $65.9 Billion, he lives in the same house he bought in 1958, doesn’t indulge in lavish eccentricities and mostly dines in local restaurants. He has commented about not leaving his children his large fortune but just enough money to secure their future in a comfortable way allowing them to pursue their goals with financial stability yet not believing they can simply do nothing. He has instead chosen to donate 85% of his wealth to the Bill & Melinda Gates Foundation, one of the largest transparent charities in the world. Buffet is not shy to donating to charities and has been doing it for over 40 years through the Susan Thompson Buffett Foundation, renamed after his late wife.