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.