Below you’ll find Ana DaSilva’s piece on Warren Buffet. We’re especially impressed with her focus on Buffet’s investment strategies & the impact it had on his success.
To build wealth, people invest their money in many different things. Investing allows people to put their money in something that has a potential chance to earn high rates of return. When people talk about investment in today’s business world, one famous and credible name comes to mind: Warren Buffet. Born in Omaha in 1930, Warren Edward Buffet is known as an American investor, philanthropist, and the Chief Executive Officer, President, and Chairman of Berkshire Hathaway. He is one of the most successful investors of all time and is considered the second wealthiest person in the United States. To understand his success, it is fundamental to analyze his career as an investor.
After Buffet graduated from college with a Bachelor of Science in business administration, in 1949 he attended Columbia Business School, where he had the privilege of attending classes taught by Benjamin Graham, who influenced him with his book, The Intelligent Investor. Graham taught Buffet details of his philosophy “value investing,” or buying stocks when they are undervalued and holding them for a long period of time. Buffet used to say “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.” This means that Buffet used to invest in companies and buy stocks at a lower price and hold them over months and even years, so he could make money from them. This strategy allowed Buffett to build his career as a prosperous investor.
With this knowledge, Buffet started on his path to success. After earning his master’s degree in 1951, he sold securities for Buffett-Falk & Company for three years, and then worked for his mentor (Graham) for two years as an analyst at Graham-Newman Corp with a starting salary of $12,000 a year. Using the techniques learned from Graham, Buffet founded the firm Buffet Partnership Ltd. in his hometown, in 1956. By this time, he had a large amount of personal savings. He was successful in identifying undervalued companies and investing his money in them. During the early 1960s he began accumulating shares of the textile company named Berkshire Hathaway and by 1965 he had taken control of the company. In the late 1960s, Buffett shifted Berkshire Hathaway from textiles to insurance. Initially, Buffet maintained Berkshire’s core business of textiles, but by 1967, he was expanding into the insurance industry and other investments. In the late 1970s, Berkshire acquired shares of GEICO and in 1985, the last textile operations were shut down. By that time, Buffett was a millionaire.
After becoming a millionaire, Buffet kept investing in companies that could generate high and sustainable profits. He invested in companies such as Coca Cola Co. and worked as a director in companies such as The Gillette Company. Nowadays, he is a billionaire and is considered a legend among investors.
Sources
https://en.wikipedia.org/wiki/Berkshire_Hathaway
http://www.therichest.com/business/economy/10-of-the-most-successful-investors-in-the-world/
http://economictimes.indiatimes.com/news/international/world-news/heres-why-warren-buffett-the-worlds-second-richest-man-doesnt-use-an-iphone/articleshow/58547442.cms
Written by Ana Da Silva
