Warren Edward Buffett (born August 30, 1930) is a wealthy American investor and businessman.
Nicknamed the "Oracle of Omaha", Buffett has amassed a substantial fortune from astute investments through his company Berkshire Hathaway, of which he holds 38%. With an estimated net worth of $44 billion as of 2005, he is ranked by Forbes as the second-richest person in the world.
$44 billion as of 2005.
Buffett was born in Omaha, Nebraska. His father Howard Buffett was a stockbroker and member of Congress. Buffett was educated at the University of Nebraska (transferring there from the Wharton School of Finance and Commerce at the University of Pennsylvania) and took a masters in economics at Columbia University, studying under Benjamin Graham. He went on to work for Graham at Graham-Newman where he followed Graham's value investing rules. Buffett returned to Omaha in 1957 and started his own investment partnership, putting in his own money and raising additional investments from friends and family. By 1969, he had returned an average of almost 30% a year, in a market where 7% to 11% is the norm and anything more is outstanding. Under Buffett's direction, Berkshire has outperformed market benchmarks such as the S&P 500 and the Dow Jones Industrial Average for over forty years.
He married Susan Thompson in 1952. They separated in 1977 but remained married. She was a significant stockholder in Berkshire Hathaway and a board member. Mrs. Buffett died on Thursday, July 29, 2004 from a stroke. Buffett lives with Astrid Menks; his late wife largely resided in San Francisco in recent years. He has three children. Mr. Buffett has stated that virtually all of his fortune will pass to his Buffett Foundation. Opposed in principle to the transfer of great fortunes from one generation to the next.
How Warren Buffet got Rich
One of his earliest investments was in American Express. Among the companies he invested in was Berkshire Hathaway, a New Bedford textile company. Buffett eventually liquidated the textile business but kept the name and turned the shell of the company into a investment business, notably in the insurance field, which generated a steady cash flow for further investment.
Buffett customarily focuses his investments in undervalued companies with good long-term growth potential. Identifying such companies is the difficult part. The actual value generated is more by the companies he owns than stock market investments, although his stock ownership in companies such as Coca-Cola, of which Berkshire Hathaway is the largest single shareholder, and Gillette attracts more attention. Buffett famously avoids high-tech companies, not because they are inherently less desirable, but because he prefers businesses he understands.
Buffett, through Berkshire Hathaway, also owns insurance companies like Geico and General Re that generate a large free cash flow. These companies are a source of funds that he then allocates to Berkshire Hathaway's subsidiaries and uses to acquire new companies.