Thursday, April 30, 2009

Warren Buffett Biography

Warren Edward Buffett (born August 30, 1930 in Omaha, Nebraska, United States) is an American investor, businessman, and philanthropist. He is one of the world's most successful investors and the largest shareholder and CEO of Berkshire Hathaway.

For a list of books on Warren Buffett click here

He is constantly ranked by Forbes as the second richest person in the world after Bill Gates with an estimated net worth of approximately $37.0 billion.

Buffet is often called the "Oracle of Omaha” or the "Sage of Omaha"and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.

Buffet is also a notable philanthropist, having pledged to give away 85% of his fortune to the Gates Foundation. He also serves as a member of the board of trustees at Grinnell College.

In 1999, Buffett was named the top money manager of the twentieth century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton, and in 2007, he was listed among Time's 100 Most Influential People in the world.


Buffett first enrolled at The Wharton School, University of Pennsylvania, (1947–1949) where he joined the Alpha Sigma Phi Fraternity. His father and uncles were Alpha Sigma Phi brothers from the chapter in Nebraska. In 1950 he transferred to the University of Nebraska where he received a B.S. in Economics.

Buffett then enrolled at Columbia Business School after learning that Benjamin Graham, (the author of The Intelligent Investor), and David Dodd, two well-known securities analysts, taught there. He then received a M.S. in Economics, Columbia University, in 1951.

Buffett has said: I’m 15 percent Fisher and 85 percent Benjamin Graham.

Buffett was employed from 1951–1954 at Buffett-Falk & Co., he taught an “Investment Principles" night class at the University of Nebraska Omaha, worked as an Investment Salesman, from 1954–1956 was at Graham-Newman Corp., New York as a Securities Analyst, from 1956–1969 formed and worked at Buffett Partnership, Ltd., Omaha as a General Partner and from 1970–Present at Berkshire Hathaway Inc, Omaha has been its Chairman, CEO.

Personal Life

In 1952 Buffett married Susan Thompson, and their marriage has produced three children. The couple began living separately in 1977, although they remained married until her death in July 2004.

In 2006, on his seventy-sixth birthday, he married his never-married longtime-companion, Astrid Menks, who was then sixty years old. She had lived with him since his wife's departure in 1977 to San Francisco.

A Millionaire

In 1962, Buffett became a millionaire, because of Buffett's partnerships, which in January 1962, had in excess of $7,178,500, of which over $1,025,000 belonged to Buffett. Buffett merged all his partnerships into one partnership.

Buffett discovered a textile manufacturing firm, Berkshire Hathaway and Buffett's partnerships began purchasing shares at $7.60 per share. In 1965, when Buffett's partnerships paid $14.86 per share while the company had working capital (current assets minus current liabilities) of $19 per share.

This did not include the value of fixed assets (factory and equipment). Buffett took control of Berkshire Hathaway at the board meeting and named a new president, Ken Chace, to run the company. In 1966, Buffett closed the partnership to new money.

In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn and Co, a privately owned Baltimore department store. In 1967, Berkshire paid out its first and only dividend of 10 cents.

In 1969, following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.

In 1970, as chairman of Berkshire Hathaway, Buffett began writing his now-famous annual letters to shareholders.

Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.

In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006.

The largest contribution would go to the Bill and Melinda Gates Foundation.

In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business.

In 2008, Buffett became the richest man in the world dethroning Bill Gates, worth $62 billion according to Forbes, and $58 billion according to Yahoo, Bill Gates had been number 1 on the Forbes list for 13 consecutive years.

Berkshire Hathaway Acquisitions

In 1973, Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.

In 1974, the SEC opened a formal investigation into Warren Buffett and Berkshire's acquisition of WESCO, due to possible conflict of interest. No charges were brought.

In 1977, Berkshire indirectly purchased the Buffalo Evening News for $32.5 million. Antitrust charges were started by its rival, the Buffalo Courier-Express. Both papers lost money, until the Courier-Express folded in 1982.

In 1979, Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett's net worth neared $140 million. Berkshire Hathaway chairman Warren Buffett helped financed the merger between Capital Cities and ABC in return for a 25 percent stake in the combined company.

In 1987, Berkshire Hathaway purchased 12% stake in Salomon Inc., making it the largest shareholder and Buffett the director.

In 1988, Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.

In 1998, he acquired General Re, (in a rare move, for stock).

In 2009, Warren Buffett invested $2.6 billion as a part of Swiss Re's raising equity captal. Berkshire Hathaway already owns a 3% stake, with rights to own more than 20%.

Berkshire Hathaway’s Common Stock Holdings

This includes outstanding stock as reported in the last SEC EDGAR filing (Form 13F), and the latest annual report.

American Express Co. (13.1%)
Anheuser-Busch Cos. (4.8%)
Bank of America
Burlington Northern Santa Fe Corporation (17.5%)
Carmax (10%)
The Coca-Cola Company (8.6%)
Comdisco (38%)
ConocoPhillips (5.6%)
Costco Wholesale
Diageo PLC
General Electric
Goldman Sachs
The Home Depot
H&R Block Inc. (sold out in 2007)
Ingersoll Rand
Iron Mountain
Johnson & Johnson (2.2%)
Kraft Foods (8.1%)
Lexmark International (sold out in 2006)
Lowe's Companies
M&T Bank (6.1%)
MidAmerican (83.7%)
Moody’s Corporation (19.1%)
Mueller Industries (sold out in 2006)
NRG Energy
Norfolk Southern Corp.
Outback Steakhouse
PetroChina (sold out in 2007)
Pier 1 Imports (sold out in 2007)
Posco (4.5%)
Procter & Gamble Co. (3.3%)
Sanofi-Aventis (1.3%)
Sealed Air (sold out in 2006)
Shaw Communications
SunTrust Banks
Tesco (2.9%)
Torchmark (3.2%)
Tyco International (sold out in 2008)
UnitedHealth Group
Union Pacific Railroad
United Parcel Service
USG (19.0%)
U.S. Bancorp (4.4%)
Wal-Mart Stores Inc. (0.5%)
The Washington Post Company (18.2%)
Wells Fargo (9.2%)
Wesco Financial Corporation (80%)
White Mountains Insurance (sold out in 2008)

For a list of books on Warren Buffett click here


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