It takes 20 years to build a reputation and five minutes to ruin it....
For somebody born during the so-called first great depression and, subsequently, raised in a healthy, value-based yet progressive environment, to pick up an interest in the stock market - when the ideal virtue, and hence, the choice would have been to work hard to earn your bread- would have gone down as just an aberration if the person who did that hadn't turned out to be one of the most successful businessmen whose life itself became the master-book on investing. He was named the top money manager of the 20th Century (Survey by the Carson Group, ahead of Peter Lynch and John Templeton) in 1999.
This write-up is not in the least trying to say what hasn't been already said, talked or written about Warren Edward Buffet. Rather, it is -more or less- a celebration of the personality that Buffet is. Such are the achievements, accomplishments, and successes (I'm already running out of nouns, adjectives won't stand a chance!) of this very simple genius who, in the final analysis, will also have earned recognition as one of the most outstanding human beings this planet has ever seen. Not for his shrewd investments, not for being the torch-bearer of the bulls in the face of the raging bears, and not even for chartering his own path of success and showing the path to millions of others. What will stand out though will be his approach toward life: extract the maximum out of life - not by short-cuts (it is quite ironic that most tend to think investing in stocks to be a short-cut to making a quick-buck as opposed to Buffet, who always treated it as a business) by thinking, working-hard, not being afraid to take decisions for both, self as well as common good, staying rooted to the core values of life, and at the end of it all, giving back to the world in his own way.
Any amount of praise is less for Warren Buffet, so one is better off talking about something else. But one is tempted to at least say, 'Thank you Mr. Buffet for being such a great example: of wisdom, vision, simplicity, and humility."
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.
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.,
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.
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.
"I always knew I was going to be rich. I don't think I ever doubted it for a minute."
"I'm 15 percent Fisher and 85 percent Benjamin Graham."
"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."
"The basic ideas of investing are to look at stocks as business, use the market's fluctuations to your advantage, and seek a margin of safety. A hundred years from now they will still be the cornerstones of investing."
"Someone's sitting in the shade today because someone planted a tree a long time ago."
"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. "
"You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing. "
"If past history was all there was to the game, the richest people would be librarians."
"Bridge is such a sensational game that I wouldn't mind being in jail if I had three cellmates who were decent players and who were willing to keep the game going twenty-four hours a day."