WARREN BUFFETT

Warren Buffett is a famous American investor who’s worth over 66 billion dollars. He attributes his ability to accumulate so much wealth to his mentor and Columbia College Professor, Benjamin Graham. Warren claims that Graham’s books, The Intelligent Investor and Security Analysis, are the primary sources of learning that he continues to reference even today. Buffett’s the third wealthiest person in the world. He’s the owner and CEO of Berkshire Hathaway and he has pledged to give away 99 percent of his wealth to charity upon death.

WARREN BUFFETT’S CHILDHOOD

While it is true that Warren Buffett has become a very successful investor in today’s society, he has actually invested in many things throughout his life. His desire to be an investor started in childhood. That desire has never truly gone away at any point in his life.

Born in Omaha in 1930, Buffett was the son of a member of the United States House of Representatives. He worked at a grocery store run by one of his relatives for a good period of time. He even sold assorted products as a door to door salesman.

Warren Buffett - Cashier
Warren Buffett - Pinball Machine

He used some of the money that he earned to fund a bank account. He also used some of his money to buy different items that he could invest in with the intention of earning money. One of the most notable examples came from how he bought a pinball machine to place in a public spot in town. He eventually used the money from that venture to buy more pinball machines to place in more spots so he could earn even more money.

In fact, Buffett even invested in shares while growing up. He bought three shares in Cities Services Preferred when he was eleven. He had a minor profit in his investment but sold his shares before they experienced massive price increases

WARREN BUFFETT’S EDUCATION

It is estimated that he had earned about five thousand dollars from his work when he graduated from high school. He did not have an interest in going to college but he did anyway, spending two years at the University of Pennsylvania’s Wharton Business School and then two years at the University of Nebraska at Lincoln.

Part of his education came from a major influence in his life. This influence came from Ben Graham, a prominent investor who created the concept of intrinsic business value. This refers to how the real worth of a business is often separate from the stock value that comes with it. His belief was that intrinsic value could be used to guide decisions in investments rather than stock numbers. This was a critical point of Buffett’s development in terms of how he was able to get into so many different investments after a while.

Buffett went to the Columbia Business School after graduating from Nebraska. He went to Columbia after hearing that Graham taught there. Interestingly enough, this came not too long after Buffett had tried to get into the Harvard Business School. He was rejected from Harvard because admissions assumed he was too young to attend it.

Buffett had studied many of Graham’s works including the Intelligent Investor, a book that Buffett continues to herald to this day as a book that was critical to his education as an investor. It includes one of the most important analogies that Buffett continues to follow to this very day in his investments.

Part of this education from Graham included his support of a value about investing that Graham introduced in this book. His Mr. Market analogy states that stock quotes are simply quotes given out by a business partner that is often going to keep on trying to sell stock and will keep on doing so until the point where that stock ends up being lower in value than what was originally offered or what the business in question might actually be worth.

The final part of Buffett’s education came from a visit with Lormier Davidson, the financial vice president of Geico in the late 1940s. Buffett went to the Geico offices in the hopes of meeting Graham because he was the chairman of that company at the time.

However, Graham was not there but Buffett was able to talk with Davidson for several hours about business practices, how to find a profitable group and what a company should do in order to be more successful. This is a critical part of Buffett’s education. Ironically enough, Geico would be a part of Buffett’s business career thanks to how he bought out that company.

WARREN BUFFETT’S BUSINESS CAREER

The business career of Warren Buffett started out relatively small in the early 1950s but this was primarily from Buffett’s lesson in patience with investing after his early experience with Cities Services Preferred. He started out by buying a small Sinclair Texaco station in the area while he was working as a night class professor at the University of Nebraska in Omaha. He did not make any money off of his Sinclair Texaco investment.

He eventually received a call from Graham asking if he was interested in working for him. He eventually got into a partnership with Graham. However, Buffett had some differences between him and Graham.

Buffett was more interested in seeing how a company manages itself and how it might be better than other companies when thinking about who to invest in. This is different from the emphasis on numbers that Graham had been using.

Buffett’s money would eventually grow while working alongside Graham. It got to the point where Buffett had made more than $100,000 from 1950 to 1956. This was much higher than the nearly $10,000 that he had at the start of that time.