Early Years
Buffet
was born in 1930 in Omaha, Nebraska. His father was a U.S.
Representative (Howard Buffet) while his mother (Leila) was a
home-maker. He had his schooling from Rose Hill Elementary School
(Omaha) and, Alice Deal Junior High School and Woodrow Wilson High
School (both in Washington D.C.), after the family had to move to the
capital: necessitated by his father's election to the United States
Congress. He then graduated with a Bachelor of Science in business
administration from the University of Nebraska-Lincoln, at the age of
nineteen, and earned a Master of Science in economics from Columbia (in
1951) besides attending the New York Institute of Finance.
He
was believed to have been great at math and would, perhaps, have made a
very good mathematician or an engineer even. But, may be because they
had a premonition or they had come to know of, and appreciated, his
investment in a pin-ball machine or whatever the reason was, the people
at the Woodrow Wilson High School had so accurately predicted that he
would be a stock-broker one day! That he has always been more of an
investor and less of a broker (a role he has performed to
near-perfection, the instances of which this write-up may not warrant)
is beyond question.
The Spark
Although
it would be improper to even suggest that any one thing or event in his
life acted as the spark that fired Buffet's imagination and drove him
toward investing, we could still look at some defining aspects of his
early life that prepared the foundation of the future-Warren Buffet
thought process. One can easily guess that the business acumen was in
his blood - his father owned and ran a brokerage firm, and there's every
chance that his father's countenance as a businessman would have had an
impact on the young Warren; so much so that, apart from his DNA, he
possessed business insights that were similar to those of his father's.
But, that would still not go down as the 'spark,; definitely not for
Warren Buffet at least. Thus we can safely presume that it was his basic
fabric that made him the successful entrepreneur that he ultimately
turned out to be.
If
it wasn't the case then how would you explain the son of a successful
businessman who was also a representative in the Congress to boot,
starting to work, earn, save, and invest, at such an early (even by the
progressive U.S. standards) and succeed.
The Saga of the 'Sage of Omaha'
It
will be very difficult, almost impossible, for most commoners to
comprehend as to what made a young bloke, at the very tender age of ten,
start looking for work outside. Especially, when there wasn't any
manifest need for doing so. Presuming that the family had imbibed in him
the virtues of hard-work, frugality and, consequently, saving, how
would you explain the kid employing his savings to buy a machine
(pinball) and placing it in a nearby barber shop so children and
enthusiasts coming to the shop could pay to play with it?
Assuming
that -ok, he did what he did to earn some money, but one would still
expect him, being so young, to spend that money on food, confectionary
or some other form of merriment as opposed to re-investing it in buying
more pinball machines and placing them in many other barber shops. If
the entrepreneur in him was well and truly on his way to success and
glory (in a way) while he was still in junior high, one should not be
surprised to know that he filed his first income-tax return at the age
of 14, and bought shares of a listed company (Cities Service Preferred)
-3 each for himself and his sister-, and bought a farm when he barely 15
years of age.
Career of the 'Wizard of Omaha'
To
be sure, his interest in the stock market had originated from the time
he spent in the customers' lounge of a regional stock brokerage near the
office of his father's own brokerage company. But his actual learning
of the field, and his eventual mastery over his investment decisions,
were shaped at the Columbia Business School, where two security analysts
(one of whom was his favorite author on the subject of investing)
taught.
Although
he was employed, upon his father's and Ben Graham's urging, with a few
companies that dealt in the financial market, Buffet's
entrepreneurialism did not stop at buying and installing pinball
machines at barber shops and buying a handful of shares of a company.
Power by his ingenuity and complemented by the wealth of knowledge of
the financial world he gained at Columbia Business School and the New
York Finance Institute, he went on to make gold of almost everything he
did or laid his hands on.
For
starters, he worked as an investment salesman from 1951-54 at
Buffett-Falk & Co., Omaha. ; then, from 1954- 1956, as a securities
analyst at Graham-Newman Corp., New York. He became a general partner at
Buffet Partnership Ltd., (Omaha) in 1956, in which capacity he remained
until 1970, when he became the Chairman of Berkshire Hathaway Inc.
One
must not forget the hard-work that Buffet put in to become the
efficient stock-broker, and eventually, the shrewd investor, he was so
destined to become. He took a pubic-speaking course from Dale Carnegie
while he was still working as a stock broker in Omaha (after returning
from New York). The skills he picked through this course helped him
teach investment principles during night classes at the University of
Nebraska as well as sell his investment ideas to potential participants
in the partnership, the eventual success of which has become part of
investment folk-lore.
So
what started as just another activity in the life of a kid eventually
turned out to be an epoch-making saga, the likes of which there were
barely few precedents, if any. He went on to forge partnerships
(starting with the Buffet Partnership involving anybody and everybody -
from doctors to lay people- who believed in his wisdom and business
acumen, before converting it into one big business partnership called
Berkshire Hathaway), acquire companies, pick-up stakes in various
industries by studying them, identifying potential, investing and
staying invested long enough for the investment to grow and yield
results that he had already a vision of. He had interests in the textile
industry, in department stores, and a maps company, and anything and
everything that promised returns in the long run. Of course, along the
way, he did invest in handful of duds, but those were mere aberrations
than anything else. Such was the quality and success of the partnership
that he closed it for people who were just bringing in capital. He
directed that potential partners had to bring much more than just
capital. In fact, capital wasn't the criteria at all. Wisdom, ideas, or a
specialty service - it could be anything but just capital.
His
successful entrepreneurship that started just when the second Great War
was nearing its end has been the subject of much debate, argument,
appreciation, and a lot more. Only he could have fired the imagination
of people, both writers & businessmen alike, to such an extent that
they were compelled to write as many as 47 books with him as the
protagonist (well, that's how I'd like to view it); only he could have
himself written the annual reports of the company and used the ideas of
those reports to also write a book called 'The Essays of Warren Buffet.,
Lifestyle
For
a man who became a self-made millionaire at 32, and a billionaire after
another two decades or so, Buffet lifestyle does not offer much for
enthusiasts by way of indulgence or possession. He has stayed in the
same 5-bedroom house in Omaha that he bought 50 years ago despite being
one of the richest men in the world during this period, although he also
owns a $4 million house in Laguna Beach, California. He still drives
his own automobile (a Cadillac DTS), and reportedly does not carry a
cell phone nor does he have a computer at his desk, and wears
tailor-made suits from the Chinese label Trands. His only know breakaway
from his famed frugality has been the purchase of a $6.7 million
private jet, which also was against his belief of CEOs avoiding
extravagances and strongly advocating use of public transport.
Philanthropy
His
heavy inclination towards stems from the two approaches life through:
He doesn't believe in dynastic wealth, and there was nothing material he
wanted out of his wealth i.e. he thinks the utility of the immense
wealth he has created would be a big naught if it weren't put to use for
common good of the people of this world with whom he shared a wonderful
life. Therefore, it isn't any surprise that he decided long ago to
pledge 99 percent of his wealth for charity and development purposes -
AIDS & medical research, nuclear threat initiative, etc., - making
it the largest charitable donation in history. In fact, a god chunk of
that is pledged to the Bill & Melinda Gates Foundation, which is to
receive 5% of the total donation on an annualized basis, starting 2006.
There is a decent list of his philanthropic activities and it is neither
feasible nor fair (since a brief mention would make little sense to the
reader) to talk about all of them here. Suffice it to say, he has truly
given back to the world that has given him so much.
Apart
from donating, Buffet also encourages people to donate to charities as
well as involve themselves in development work, by participating in
events that have his name-stamp on them.
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