WARREN BUFFETT -- EVERYTHING YOU WANT TO KNOW!

On March 5, 2008, Forbes Magazine named Warren Buffett “The World’s Richest Man.” For those who may have heard the name, but aren’t familiar with who he is, Warren Buffett is an American investor, businessman, and philanthropist. He is the CEO and largest shareholder of Berkshire Hathaway and has an estimated net worth of $62 billion.

Nicknamed the “Oracle of Omaha,” Warren Buffett is praised around the world for his investment strategy known as “value investing.” He is also considered quite a frugal individual and despite his wealth, his annual salary from Berkshire Hathaway is only $100,000 (making him the lowest paid executive among the 200 largest companies in the country) and he still lives in the same house in Omaha that he purchased in 1958 for $31,500 (today it is valued at about $700,000).

One of the many things Mr. Buffett is known for is his philanthrophy. He announced a few years ago that he would bequest a sizeable portion of his fortune to charity, with approximately 83% of it earmarked for the Bill & Melinda Gates Foundation.

JUST WHO IS WARREN BUFFETT?

The man who is an icon for the world’s wannabe investors and hailed by many of his contemporaries as an incredibly brilliant man is a mere mortal like you and I. He is one of the few individuals on the Forbes Magazine Richest People List — if not the only one — who made his fortune by investing. In fact, Buffett is regarded as one of the world’s greatest stock market investors and he is the largest shareholder and CEO of Berkshire Hathaway.

At 77 years old, Americans look to Mr. Buffett for advice, predictions, and business savvy. He remains a down-to-earth individual with an incredibly astute, basic, street-smart approach to life that doesn’t involve any magical formulas. When you listen to what he has to say, it just all makes sense. Common sense.

Buffett is a man who doesn’t seem to take himself so seriously. In a recent interview with CNBC aboard his private jet while he was returning from a business trip to visit some factories in Asia that his company holds, he told the reporter that he was there to “cut the ribbons” to open the factory. He knows he is not the best person to set up factory operations, work out schedules, or coordinate logistics. So he sticks to what he does and knows best and let’s the people he hires to work for him take care of the rest.

Warren Buffett’s personality is undoubtedly the anti-thesis of Donald Trump, who seeks out publicity and continually praises himself for his success, taste, and style. He seems to be the good-natured grandfather with the sage advice. It makes one want to sit on his knee and listen well…very well.

Come meet Warren Buffett….

WARREN BUFFETT'S BIOGRAPHY

Warren Buffett graduated from Woodrow Wilson High School in Washington, DC in 1947.

He then attended The Wharton School, University of Pennsylvania from 1947 to 1949 as an undergraduate and was initiated into Alpha Sigma Phi Fraternity — his father and uncles were Alpha Sigma Phi brothers as well although from the Nebraska chapter.

In 1950, Buffett graduated from the University of Nebraska with a Bachelor of Science. He then enrolled at Columbia University’s Columbia Business School because he heard that Benjamin Graham and David Dodd — two of his mentors who were well-known securities analysts — taught there. In 1951 at the age of 21, Buffett graduated from Columbia University with a Master of Science in Economics.

Upon graduating, Buffett began working as a stock broker and then later took a Dale Carnegie public speaking course. Feeling quite confident in his education and his abilities, Buffett decided to teach a night class at the University of Nebraska entitled “Investment Principles.” Funnily enough, the majority of his students were much older than he was.

WARREN BUFFETT'S MENTORS

BENJAMIN GRAHAM

When it comes to giving credit for his success, Warren Buffett is quick to give kudos to the man who was perhaps his most influential mentor: Benjamin Graham. Graham was an investor and professor, whom many consider to be “The Father of Value Investing.”

Graham was born in London and moved to New York City with his family as a baby. He attended Columbia University and later taught there. Warren Buffett moved to New York to study under Graham, and upon graduation, offered to work for Graham’s firm for free just to be near his mentor. Graham refused, saying he reserved the spots in his firm for Jewish graduates who could not get work at “gentile” firms. And so Buffett moved back to Nebraska. But Graham’s teachings were always with him. Buffett is often quick to say, “I’m 15 percent Fisher [referring to Philip Arthur Fisher - a stock investor best known as the author of Common Stocks and Uncommon Profits] and 85 percent Benjamin Graham.”

Buffett summarized Graham’s ideology as follows: “The basic ideas of investing are to look at stocks as business, use market fluctuations to your advantage, and seek a margin of safety.”

Graham saw investing as a discipline, and as a discipline, smart investing encompasses research, training, and experience. Acccording to Graham, investing lies somewhere between an art and a science. Speculating, on the other hand, was pure, irrational gambling.

PHILIP ARTHUR FISHER

Buffett’s other primary mentor was Philip Arthur Fisher, a stock investor who wrote “Common Stocks and Uncommon Profits.” It was published in 1958 and remains in print to this day.

Mr. Fisher’s claim to fame is as a pioneer in the field of growth investing — an investment strategy where one invests in companies that exhibit signs of above-average growth, even if the share price appears high with regard to price-to-earning or price-to-book ratios. It is in direct contrast to “value investing.”

His book, ”Common Stocks and Uncommon Profits,” focuses on a buy-and-hold approach to investing and his method for identifying stocks that have a strong potential for long-term growth. FIsher is also known for advising his disciples to limit the number of stocks in their portfolio and to limit turnover even further. ”If the job has been correctly done when a common stock is purchased,” he wrote, ”the time to sell is almost never.” Fisher’s most well-known “buy” was investing in Motorola back in 1955 when it was still manufacturing radios and holding on to it until his death in 2004.

WARREN BUFFETT'S PERSONAL INFORMATION

Warren Buffett and his wife, Susie, decided to live apart in 1977 when she moved to San Francisco. They never divorced and often traveled together to family events. Susie also served on the board of Berkshire Hathaway and held 2.2 percent of the company.

Warren was so distraught when Susie left, that she contacted her friend, Astrid Menks, and asked her to cook for him. Astrid is an attractive blonde and she soon became Warren’s companion and housekeeper.

In 2003, Susie was diagnosed with mouth cancer, and one year later, while traveling with Warren to visit friends in Wyoming, she suffered a stroke. Warren was at her side in the hospital when she died.

Warren and Astrid lived together for 25 years are were married two years after Susie died.

FORBES' RICHEST MAN IN THE WORLD

Dateline March 5, 2008. Forbes Magazine publishes its list of the richest people in the world and Warren Buffett, age 77, is newly ranked as number one — beating out his good friend Bill Gates who held the top spot for 13 years. Gates is now considered the world’s third richest person, behind Mexican telecom tycoon Carlos Slim Helu.

With an estimated net worth of US$62 billion, Mr. Buffett, also known as the “Oracle of Omaha,” is now in the top spot. Not too shabby for a self-made man who only makes $100,000 as Chairman and CEO of Berkshire Hathaway and continues to live in the original house he purchased in 1958 in Nebraska.

Some attribute Buffett’s rise to the top of Forbes’ richest list due to the fact that his Berkshire stock is up 22% in the past 12 months. His net worth is $10 billion richer this year than last.

The key to Buffett’s success has been his uncanny ability to invest well. His investment philosophy is now legendary and has been termed “value investing.”

WARREN BUFFETT, THE PHILANTHROPHIST

As the world’s richest man according to Forbes Magazine, Warren Buffett’s fortune is estimated to be about $62 million. And while he has three children and a new wife, the reality is that a large majority of his fortune will be given to charity.

In 2006, Buffett made his plans public for how his fortune will be distributed. Approximately 83% of it will be going to the Bill & Melinda Gates Foundation. He began this bequest with an initial gift of approximately 10 million Berkshire Hathaway Class B shares (worth approximately $30.7 billion at the time of the gift), resulting in the largest charitable donation of all time. Plans call for the Bill & Melinda Gates Foundation to receive 5% of the total donation each year in July.

Forbes has written that in inflation-adjusted dollars, Mr. Buffett will ultimately give away more money than John D. Rockefeller or Andrew Carnegie. For the record books, Carnegie brought universal access for the poor to books via libraries, and Rockefeller used his bilions to fund the research that led to the eradication of polio. The Gates’ Foundation’s ambition is to eradicate the 20 leading diseases in the world during Bill or Melinda’s lifetime.

Mr. Buffett also has plans to donate additional Berkshire Hathaway stock to the Susan Thompson Buffett Foundation (in honor of his late wife) and to other foundations which his children Susie Buffett, Howard Graham Buffett, and Peter Buffett head. The bulk of the estate of his wife, Susan, who died in 2004 while the couple was separated, which was valued at $2.6 billion, went to that foundation upon her death.

While many might expect a billionaire to bequest his fortune to his children, Mr. Buffett has been quoted as saying that “I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.” His beliefs are in strong opposition to the transfer of huge fortunes from one generation to the next.

In 1997, Mr. Buffett was quoted as saying, “I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when my wife and I die.”

BOOKS ABOUT WARREN BUFFETT

The world is so fascinated with this man who is today “The World’s Richest Man” that there are countless books written about him.

“Warren Buffett Speaks: Wit and Wisdom From The World’s Greatest Investor” by Janet Lowe is a collection of quotes, writings, and favorite sayings from the man who is considered the world’s most successful inventor. This book reveals the personality and philosophy of one of the world’s most compelling figures.

”The Warren Buffett Way” by Robert G. Hagstrom outlines his incredible career and offers examples of how his investment techniques and methods evolved. It also provides insight and the philosophy which Mr. Buffett uses to consistently make money as an investor.

“The New Buffettology: The Proven Techniques For Investing Successfully In Changing Markets That Have Made Warren Buffett the World’s Most Famous Investor” by Mary Buffett and David Clark highlights Buffett’s “selective contrarian investment strategy” for exploiting down stocks which is a strategy that has made him the world’s richest man.

WEIRD FACTS ABOUT WARREN BUFFETT

Warren Buffett is NOT your typical wealthy individual. Despite his net worth of $62 billion, he lives a rather frugal existence and has been dubbed “The Forrest Gump of Omaha” by Vanity Fair Magazine.

STILL LIVING IN HIS ORIGINAL HOUSE

Even though Mr. Buffett could afford a house anywhere in America — or the world for that matter – he continues to live in the same house that he bought in 1958 for $31,500 in the central Dundee neighborhood of Omaha.

HIS ONE EXTRAVAGANCE

Buffett has been known to criticize the extravagance of other CEOs, yet the only time he succumbed to the freedom of being able to spend as much money as he wanted, was when he used $9.7 million of Berkshire Hathaway’s funds on a business jet in 1989. He jokingly named it “The Indispensible” in a nod to his past criticisms of similar purchases by other CEOs.

DAILY READS

Buffett generally reads a total of six newspapers a day — The Wall Street Journal, Financial Times, The New York Times, USA Today, the Omaha World-Herald, and the American Banker.

DAILY DIET

Some might say that Warren Buffett can dine on caviar and drink champagne any time he likes. But he is a meat and potatoes man, usually preferring beef for lunch and dinner. His drink of choice: Coca-Cola. Constantly. It must be convenient that Coca-Cola happens to be a Berkshire Hathaway holding company.

FAVORITE INDULGENCE

Warren Buffett’s favorite indulgence is a Dusty Sundae — vanilla ice cream with lots of Hershey’s Chocolate Syrup with malted milk powder heaped on top.

WARREN BUFFETT'S "INDISPENSIBLE"

For the world’s richest man, Warren Buffett has remained relatively humble. While other CEOs and billionaires live in fancy houses — with a number of them around the world – drive nice cars, and spend quite liberally, Mr. Buffett is known to be frugal.

His only homage to his “Richest Man In The World Status” is the private plane — a Gulfstream IV-SP jet — he purchased for the company, which he now calls “Indispensible.”

Word has it, that while Buffett often mocked the private jets of other corporations, in 1986 he did finally buy a small used plane for Berkshire Hathaway and then later, traded that one in for a more expensive model — at a cost of $9.7 million.

Poking fun at himself in the company’s annual report, he wrote, “Whether Berkshire will get its money’s worth from the plane is an open question, but I will work at achieving some business triumph that I can (no matter how dubiously) attribute to it.”

Luxury private air travel has since become a passion for Buffett. In 1995, he purchased a one-quarter share of a Hawker for personal use. His wife, who frequently travels aboard it, nicknamed the new plane “The Richly Deserved.” Not one to be outdone, Buffett decided to name his corporate jet, “The Indispensable.”

FAMOUS WARREN BUFFETT QUOTES

Warren Buffett is perhaps one of the most quoted men in financial circles. Mr. Buffett offers a no-nonsense approach to investing and life in general. Here are some of his most famous quotes:

“A public opinion poll is no substitute for thought.”

“If past history was all there was to the game, the richest people would be librarians.”

“Risk comes from not knowing what you’re doing.”

“Only when the tide goes out do you discover who’s been swimming naked.”

“Look at market fluctuations as your friend rather than your enemy; profit from the folly rather than participate in it.”

“Chains of habit are too light to be felt until they are too heavy to be broken.”

“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

“If a business does well, the stock eventually follows.”

“In the business world, the rear-view mirror is always clearer than the windshield.”

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

“Let blockheads read what blockheads wrote.”

“Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

“Our favorite holding period is forever.”

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

“Risk is a part of God’s game, alike for men and nations.”

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”

“The first rule is not to lose. The second rule is not to forget the first rule.”

“The investor of today does not profit from yesterday’s growth.”

“The only time to buy these is on a day with no “y” in it.”

“The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves — and the better the teacher, the better the student body.”

“There seems to be some perverse human characteristic that likes to make easy things difficult.”

“Time is the friend of the wonderful company, the enemy of the mediocre.”

“We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’”

“We enjoy the proces far more than the proceeds.”

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

“When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”

“Wide diversification is only required when investors do not understand what they are doing.”

“You only have to do a very few things right in your life so long as you don’t do too many things wrong.”