Warren Buffett

Price is what you pay. Value is what you get.

Warren Buffett

Introduction

Warren Edward Buffett (born August 30, 1930) is an American investor, philanthropist, and the chairman and CEO of Berkshire Hathaway, a holding company that grew from a failing textile mill into a $900+ billion conglomerate. Known as the Oracle of Omaha, he turned $10,000 in 1950s savings into a personal fortune exceeding $140 billion (2025), making him one of the wealthiest humans ever. A disciple of Benjamin Graham’s value investing, Buffett buys “wonderful businesses at fair prices” and holds them “forever.” His annual Berkshire shareholder letters are bibles of capital allocation; his Pledge to give away 99% of his wealth reshaped modern philanthropy. At 95, he still eats Cherry Coke and Dairy Queen while outthinking Wall Street.

Early Life

Born in Omaha, Nebraska, during the Great Depression, Buffett was the second of three children of Howard Buffett (stockbroker and four-term congressman) and Leila Stahl. He sold chewing gum door-to-door at age 6, delivered Washington Post newspapers (2,000+ copies daily), and filed his first tax return at 13—deducting his bicycle as a business expense.

Obsessed with numbers, he memorized corporate statistics like baseball cards. At 10, a single Wall Street lunch with a Dutch broker ignited his lifelong passion. By 11, he bought his first stock (Cities Service Preferred, 3 shares each for himself and sister Doris).

Education

  • Wharton School (1947–49) – Left bored; “I knew more than the professors.”
  • University of Nebraska – B.S. in Business (1950, age 19)
  • Columbia Business School – M.S. in Economics (1951) under Benjamin Graham; only “A+” Graham ever gave
  • Rejected by Harvard Business School

Post-grad, he worked as a salesman at Buffett-Falk & Co. (his father’s firm) while taking Dale Carnegie public-speaking courses to overcome shyness.

Investment Career

Year Entity Milestone
1951–54 Graham-Newman Corp. Analyst; learned “cigar-butt” investing (cheap, dying companies)
1956 Buffett Partnership Ltd. Started with $105,100 (his $100 + family/friends); Omaha living room office
1962–65 Berkshire Hathaway Bought control of textile mill at $7.50/share; pivot to insurance
1967 First National Indemnity purchase; “float” became capital engine
1970s Stakes in Washington Post, GEICO (full control 1996)
1988 Coca-Cola $1B investment; still holds ~9%
1989 Partnership dissolved; all assets into Berkshire
2006 Iscar First non-U.S. acquisition ($4B, Israel)
2010 Burlington Northern $44B bet on American infrastructure
2016 Apple $1B → $170B position by 2025

Compound Annual Return (1965–2024): ~20% vs. S&P 500 ~10%.

Core Principles

Rule Quote
Circle of Competence “I’m no genius. I’m smart in spots… I stay around those spots.”
Margin of Safety Buy at 50¢ what’s worth $1
Economic Moat Durable competitive advantage (brand, cost, network)
Temperament > IQ “Investing is not a game where the 160-IQ guy beats the 130-IQ guy.”
Never Lose Money Rule #1: Never lose money. Rule #2: Never forget Rule #1.

Berkshire Hathaway Today

  • Subsidiaries: GEICO, Duracell, Dairy Queen, Fruit of the Loom, NetJets, BNSF Railway
  • Equity Portfolio: ~$400B (Apple 40%, Coca-Cola, AmEx, Occidental)
  • Cash Horde: $325B (2025) – “elephant gun” for crises
  • Class A Shares: ~$700,000 each; never split

Personal Life

  • 1952: Married Susan Thompson; three children: Susie, Howard, Peter
  • 1977: Susie moved to San Francisco to sing; introduced Warren to Astrid Menks (waitress)
  • 2004: Susan died; Warren married Astrid (2006) in 15-minute ceremony
  • Diet: Cherry Coke (5 cans/day), McDonald’s, See’s Candies; “I’m one-quarter Coca-Cola.”
  • Home: Same 1958 Omaha house bought for $31,500
  • Hobbies: Bridge (with Bill Gates), ukulele, Nebraska Cornhuskers football
  • Salary: $100,000/year; no stock options

Philanthropy

  • 2006 Giving Pledge: With Bill Gates, committed >99% of wealth
  • Gates Foundation: $50B+ in Berkshire stock (adjusted)
  • Family Foundations: Susan Thompson Buffett (reproductive health), Sherwood (education), Novo (arts), Howard G. Buffett (agriculture)
  • Donates annually in July; 2024 gift: $5.3B

Later Years (Ongoing)

At 95, Buffett:

  • Plays bridge online nightly
  • Reads 500 pages/day (annual reports, newspapers)
  • Hosts 30,000+ shareholders at Omaha “Woodstock for Capitalists”
  • Mentors Todd Combs and Ted Weschler (portfolio co-managers)
  • Designated successor: Greg Abel (CEO, Berkshire Energy)

Still drives a 2014 Cadillac XTS; flies NetJets but books commercial when possible.

Legacy

  • Value Investing: Graham → Buffett → Munger → global curriculum
  • Corporate Governance: No dividends, no spin; “owners, not renters”
  • Capital Allocation Textbook: $1 in 1964 → $30,000+ in Berkshire today
  • Cultural Icon: HBO’s Becoming Warren Buffett (2017); Snowball biography (2008)
  • Omaha Pilgrimage: Annual meeting streams worldwide

Critics cite underperformance vs. tech indices in 2010s and succession risk, yet Berkshire’s $1 trillion market cap (2024) and AAA credit (one of three U.S. firms) silence doubters.

Buffett proved that patience is alpha, integrity is wealth, and a cherry-flavored soda can compound into an empire. He turned Middle America into the world’s greatest classroom—one See’s peanut brittle at a time.