Warren Buffett - The Oracle Of Omaha

October 20, 2009 | scorpion

"Rule No.1 is never lose money. Rule No.2 is never forget rule number one." The simple rule has been Warren Buffett’s mantra ever since he started out in the investment and trading business. As a student of the great Benjamin Graham, Buffett has taken that mantra to a new level.

Biography

Born in 1930 in Omaha, Nebraska, Warren Buffett attended the University of Nebraska and graduated with a Bachelor of Science. He was strongly influenced by Benjamin Graham’s book ‘The Intelligent Investor’ and went to Columbia University in order to get his Master’s of Science in business in 1951. When he returned to Omaha he founded his own investment firm. From 1951 to 1954 he worked as an investment salesman for Buffett-Falk & Company. He maintained a close friendship with his mentor, Graham, and he became a securities analyst with Graham’s firm from 1954 to 1956. Buffett helped Graham analyze so many companies during his time working for Graham that he was able to form his own approach to successful stock investing.

Buffett returned to Omaha once again and at the age of 25 started a family investment partnership with $100,000. Between 1956 and 1969 the company had a thirty-fold gain in the value per share of the investment stock. The partnership was dissolved and Buffett when on to successfully turn around the Berkshire Hathaway textile company in New Bedford, Massachusetts, a company he acquired in 1965. He changed the company’s financial foundations and used the business as a holding company for future investments.

When the market collapsed in 1973 through 1974, Buffett was able to use the textile company to purchase others as he had hoped. One of the company’s he invested in includes The Washington Post. Today Berkshire Hathaway is a major holding company with assets and sale totaling $240 billion and $100 billion respectively.

Claim to Fame

Buffett is considered one of the most successful investors in history thanks to his mentoring by Benjamin Graham and his careful buying and selling of company stock. He is also announced that he would be pledging $44 billion of his holdings to the Bill and Melinda Gates Foundation as well as four other charity organizations that were launched by his family.

Why was he successful?

In addition to following the advice of his mentor and friend Benjamin Graham, Buffett has taken the time to develop his investing method into one that includes patience, discipline, and looking for a company with value to invest in. He looks for businesses that have but are not limited to the following: very little debt with a decent return on their capitol; understandable products or services; cash flow shows their profit; they have the freedom to price thanks to franchises; they are easy to run; they have predictable earnings; and the management is based on owner-oriented principles.

Publications

Warren Buffett has not published any books or articles. However, interested parties can access his annual shareholder letters and annual reports through the Berkshire Hathaway website. Additionally, the following publications cover Buffett’s financial career and investing principles:

* "Buffett: The Making of an American Capitalist" by Roger Lowenstein (1996).

* "Warren Buffett Speaks: Wit And Wisdom From The World's Greatest Investor" (1997)

* "The Warren Buffett Way" by Robert G. Hagstrom (2005)

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