Warren Buffett: A Closer Look

WARREN BUFFETT: A CLOSER LOOK.

Over the past thirty-five years, Warren Buffett has emerged as arguably the greatest investor in American history. If you had invested $1,000 in Berkshire Hathaway when he took control in 1965, your holdings would be worth more than $5.5 million today. The second-richest man in the world, Buffett still lives in the same house he bought three decades ago for $31,500, drives an older Lincoln Towncar with vanity plates "THRIFTY", and appropriately drinks countless cans of Coca-Cola.( A firm he holds substantial stakes in.)

Warren Buffett has been investing in stocks since the age of 11; he purchased three shares of Cities Service at $38 per share for both himself and his older sister, Doris. Shortly after buying the stock, it fell to just over $27 per share. Warren although frighten of losing

his money decided to keep his shares until they rebounded to $40. He promptly sold them - a mistake he would soon come to regret. Cities Service shot up to $200. This experience has taught warren buffet a lesson that he still uses to day when investing other stocks: patience is a virtue.

Another aspect of warren buffett is to rely on his "gut" instinct. He doesn't believe in having long drawn out meetings if any at all. He doesn't Micro Manage his managers. He allows them to run the business in there best interest. Mr. Buffett doe not want a phone call when ever there is a decision to be made. He allows the managers to do there job and learn from their mistakes. Warren Buffett hangs in for the "long haul" in all his business ventures.

Warren Buffett is now 75 and shows no signs of slowing down; however over the past few years he has "allowed $40 billion in cash to accumulate at Berkshire because he hasn't found many attractive investments over the last couple of years. Some investors doubt that share holders would stay patient if anyone other than Mr. Buffett had such a large cash horde." When asked about a successor Mr. Buffett has said, his job will be split into three pieces: a CEO in charge of operations, a chief of investments and a chairman. During the 1990's, Berkshire Hathaway stock catapulted as high as $80,000 per share.

Resources

Class handout : Warren

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