Berkshire Hathaway. Sounds like a person doesn’t it? Well, it is actually the investment vehicle of the billionaire himself, Warren Buffet. Known as the “Oracle of Omaha”, Warren Buffett is the fourth richest man in the world and one of the most iconic investors in our times. Investing itself is nothing short of a daunting task let alone finding a lucrative place to invest in. Hence, today we bring to you the teachings of the guru himself and the things we can learn from his life.
Who is Warren Buffett?
Warren Edward Buffett was born on August 30, 1930, in Omaha, Nebraska. An only son with an obvious knack for all things finance and business. From a young age, Warren Buffett displayed interest and talent in these areas. At only 11 years old he made his first investment, buying three shares of Cities Service Preferred at $38 per share. By the age of 13, Buffett was running his own businesses as a paperboy and selling his own horseracing tip sheet. That same year, he filed his first tax return, claiming his bike as a $35 tax deduction. Pretty amazing right? The following years, he went on to make business ventures and learning for ways to earn money. At the age of 16, Warren Buffett had enrolled in the University of Pennsylvania. He stayed there for two years.
then moved to the University of Nebraska to finish up his degree. When he emerged from college at age 20 he had nearly $10,000 saved up from his childhood businesses.
Boy genius to say the least.
Without a doubt, Warren Buffett had natural talent. He paired that talent with further education and teachable experiences to stand where he is today. Although, it was by no means an easy or trivial task. After years of hard work and taking calculative risks, he is now worth $71.6 billion. He formed Buffett Partnership Ltd. in 1956, and by 1965 he had assumed control of Berkshire Hathaway.
Warren Buffett has made numerous investments throughout his life, but some are seen to be more lucrative and prominent from the rest. Below we have listed down some of his and Berkshire Hathaways’ best investments of all time. And just for fun, we added how much of the following companies Berkshire Hathaway actually owns!
- USG Corporation: 31% of the company-owned
- American Express: 17.9% of the company-owned
- Moody’s Corporation: 12.9% of the company-owned
- Wells Fargo: 9.8% of the company-owned
- Delta Airlines: 9.6% of the company-owned
- Coca Cola: 9.4% of the company-owned
- Bank of New York Mellon: 8.8% of the company-owned
- Southwest Airlines: 8.7% of the company-owned
- United Continental: 8.1% of the company-owned
- Apple: 5.4% of the company-owned
- JP Morgan and Chase: 1.5% of the company-owned
Now that we have established that Warren Buffett is the man to go-to for all things investments, why not explore some advice from the man himself. It is safe to say that following his practices and tips in the whole investment process can be of help to a lot. Even so, throughout the years, Buffett has not always made the best investments and has deemed them as teachable moments. Not only for himself but for all in this sector as well.
Invest in what you know and nothing more
One of the easiest ways to make an avoidable mistake is getting involved in investments that are overly complex. And so, only when you are sure about the internal works of a business and if you know enough about the sector, then only take the risk.
“Never invest in a business you cannot understand.” – Warren Buffet
Now, this does not always imply that you cannot invest in several areas of the market but merely to engage with caution.
Buy stock and expect to have it forever
“If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” – Warren Buffet
You need to be committed to anything you do in life and the same goes for an investment. Warren Buffett clearly embraces a buy-and-hold mentality. He has held some of his positions for a number of decades.
Another very strong quote, Buffett says “The stock market is designed to transfer money from the active to the patient.”
News can also be noise sometimes
Pay no heed to all the headlines and news articles that bombard your screens and faces. Most of it is just noise. This is because it might be blown way out of proportion. The business tycoon himself says not to let any of the noise sway you from making a good financial decision.
Of course, not all news is just to generate hype but can actually turn a good investment into a bad one and that’s where the step with caution stuff comes into play. Do your research, ask around, be sure of yourself, and then make a calculated decision.
Keep business quality your top priority
Identifying high-quality businesses can be nothing short of a tedious and lengthy task. Warren Buffett’s investment philosophy has evolved over the last 50 years to mainly focus on investing in high-quality companies with promising long-term opportunities for continued growth.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett
Only to listen to those you trust
Warren Buffett emphasizes the importance of only investing in trustworthy, competent management teams. He is careful in selecting his business partners and managers. He believes that their opinions are of utmost importance but only if they can be trusted.
The finance and investment world is filled with colorful characters and it can certainly be hard to distinguish good from the bad. But before you make partnerships or relationships with anyone be very careful and cautious. If you are even a tad bit unsure of anyone, back out immediately.
Not Only An Investor But Much More
We’ve talked about Warren Buffett only from a corporate angle but we haven’t even gotten to all the other endeavours in this man’s life. As Bill Gates has before, Warren Buffet has supported him immensely in these trying times. Not only a good friend to many, but the billionaire investor has also donated $37 billion worth of Berkshire Hathaway stock to date. As we can see, there is a lot to unfold and learn from this man. We hope we were able to entice some interest to you about the Oracle of Omaha and that we could illuminate some of the remarkable accomplishments in this life.