At 8 years old he was already collecting every stock chart he could find, at 11 he bought his first stock, and at 95 he is the "greatest investor of all time". Warren Buffett is blowing out his candles, sitting on a fortune of over $141 billion.
On August 30, 1930, Warren Edward Buffett was born into a middle-class family in the US city of Omaha, Nebraska. His father, Howard Homan Buffett, was a Republican congressman and a stockbroker - who knows if that's where his love of investing came from.
Buffett is known to have started collecting stock charts at the age of 8 and at 11 he had already bought his first stock, from the company City Service Preferred. He began his career distributing copies of The Washington Post to earn money, and while studying at the University of Pennsylvania, he tried his hand at various businesses.
However, everything changed when he graduated with a degree in business administration from the University of Nebraska and earned a master's degree in economics from Columbia Business School, where he was a student of the legendary Benjamin Graham, father of value investing.
Buffett's beginnings as an investor
Fascinated by his teacher, Buffett wanted to go to Wall Street. He even asked his mentor for an unpaid job, but neither his father nor Graham wanted him to do it. Luckily for everyone, some time later, the father of the value investing reconsidered his decision and called up a young Buffett at the age of 22.
It was in 1952 when he began to work officially in the financial world. Led by Graham, analyzing company reports and applying the firm philosophy of value investing, albeit with some discrepancies. The mentor relied on rigorous analyses and Buffett included other less measurable elements, such as the management team and the brand.
Just four years later, in 1956, Warren Buffett returned to his native Omaha following Graham's retirement. It was there that he created Buffett Associates to manage and invest capital. He started with $300,000 and $100,000 of his own money to give it a jump-start.
A very revealing fact is that from the age of 20 to 26, from 1950 to 1956 when he founded the company, Buffett multiplied his capital from $9,800 to $140,000 thanks to his skills, which were already bearing fruit in his personal finances.
The legend was born in the sixties
It was just under five years since Buffett founded his firm. From the end of 1956 to 1961, the cumulative returns were already 251%, while in the same period the Dow Jones rose by 74.3%. The figures were starting to speak for themselves, and Warren, in his thirties, was beginning to attract the attention of the financial world.
In early 1962, the firm went from $300,000 to more than $7.2 million, of which one million belonged to the investor. It was also the year he raised the entry requirement for new investors to $100,000 and Charles Munger began collaborating with him to build one of the greatest financial success stories in history.
In 1965 he bought the textile company Berkshire Hathaway, under which years later he would unify all his companies. By 1972, a decade after Munger's collaboration, Buffett Partnerships' returns had already grown by 1,156%, compared to 123% for the Dow Jones.
Buffett, the billionaire
The 1970s began with an oil crisis that Buffett took advantage of to buy businesses at low prices, increase his stake and shape his philosophy based on “being fearful when others are greedy and greedy when others are fearful”. A vision that led him to appear for the first time on the Forbes list in 1979, when he had a net worth of over $620 million.
However, it wasn't until the 1980s that his fame went global. He took Berkshire Hathaway public and bought shares in Coca-Cola in 1988, one of the most iconic investments in its history. In fact, he bought 6.3% of the company for $1 billion, which today is worth 25 billion dollars, not counting what he earns from dividends.
By the 1990s, Buffett was already a legend established around the world. Berkshire Hathaway was unstoppable, and its letters to investors were considered true sources of wisdom for investors. Three decades in which he went from attracting attention to earning everyone's respect.
The future, our best investment
New century, new successes
A new century began with Buffett criticized for not investing in technology. The dotcom crisis ended up once again proving why he didn't do so. Buffett continued to earn, invest, and teach. But, his best investment was yet to come. We're talking about Apple.
In 2016, Warren, under fire again for his views on technology, shocked the world with a massive purchase of Apple shares. Not only that, but in 2018 he bought more again, investing more than $35 billion in total, which today has become 170 billion, thanks to the strong rise of the Palo Alto company.
After averaging a 20% annualized return from his early investing days to retirement, Buffett doubled the return of the S&P 500 over that same period, turning an investment of $100 50 years ago into $911,000 today. Nobody creates wealth like Warren Buffett.