Warren Buffett Biography

Known as the "Oracle of Omaha," Warren Buffett is an investment guru and one of the richest and most respected businessmen in the world.

Synopsis

Businessman and investor Warren Buffett was born on August 30,1930, in Omaha, Nebraska. Investing by age 11, Buffett was running a small business at 13. Buffett later started the firm Buffett Partnership in Omaha, with huge success. In 2006, Buffett announced that he would give his entire fortune away to charity (est. $62 bil.), the largest act of charitable giving in United States history.

Early Life

Businessman and investor. Born Warren Edward Buffett on August 30,1930, in Omaha, Nebraska. Buffett's father Howard worked as stockbroker and served as U.S. Congressman. His mother, Leila Stahl Buffett, was a homemaker. Buffett was the second of three children and the only boy.

Buffett demonstrated a knack for financial and business matters early on in his childhood. Friends and acquaintances have said the young boy was a mathematical prodigy, and was able to add large columns of numbers in his head-a talent he still occasionally shows off to friends and business associates.

Warren often visited his father's stockbrokerage shop as a child, and chalked in the stock prices on the blackboard in the office. At 11 years old he made his first investment; he bought three shares of Cities Service Preferred at $38 per share. The stock quickly dropped to only $27, but Buffett held on tenaciously until they reached $40. He sold his shares at a small profit, but regretted the decision when Cities Service shot up to nearly $200 a share. He later cited this experience as an early lesson in patience in investing.

First Entrepreneurial Venture

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.

In 1942, Buffett's father was elected to the U.S. House of Representatives, and his family moved to Fredricksburg, Virginia, to be closer to the congressman's new post. Buffett attended Woodrow Wilson High School in Washington, D.C., where he continued plotting new ways to make money. During his high school tenure, he and a friend purchased a used pinball machine for $25. They installed it in a Washington, D.C. barbershop and, within a few months, the profits of the machine allowed Buffett and his friend to buy other machines. Buffett owned three machines in three different locations before he sold the business to a War Veteran for $1,200.

Higher Education

Buffett enrolled at the University of Pennsylvania at the age of 16 to study business. He stayed two years, moved to the University of Nebraska to finish up his degree, and emerged from college at age 20 with nearly $10,000 from his childhood businesses.

Buffett attended Columbia University for his advanced degree and in 1956, shortly after graduation, he formed the firm Buffett Partnership in his hometown of Omaha. His investment successes, particularly in buying undervalued companies whose stocks shortly began to rise, made him extremely rich and gained him the sobriquet, "Oracle of Omaha." Other notable career succeses include helping rescue Salomon Brothers from corporate raiders (1987) and taking charge of the New York City house (1992) in the wake of an insider trading scandal.

Record-Breaking Donation

In June 2006, Buffett made an announcement that he would be giving his entire fortune away to charity, committing 85 percent of it to the Bill and Melinda Gates Foundation. This donation became the largest act of charitable giving in United States history.

The majority of Buffett's considerable fortune was amassed through Berkshire Hathaway, a company for which he is the largest shareholder and CEO. Once ranked as Forbes' wealthiest man in 2008, his net worth was estimated at roughly $58.2 billion in 2014.

Now in his eighties, Buffett recently announced that he is battling prostate cancer. He will begin treatment in July 2012 and expects to be able to fulfill his usual responsibilities at Berkshire Hathaway. "I feel great ... and my energy level is 100 percent," Buffett said in a statement.

Business career

Buffett was employed from 1951 to 1954 at Buffett-Falk & Co., Omaha as an investment salesman; from 1954 to 1956 at Graham-Newman Corp., New York as a securities analyst; from 1956 to 1969 at Buffett Partnership, Ltd., Omaha as a general partner; and from 1970 – present at Berkshire Hathaway Inc, Omaha as its Chairman, CEO.

In 1950, at the age of 20, Buffett had made and saved $9,800 (nearly $94,000 inflation adjusted for the 2012 USD). In April 1952, Buffett discovered Graham was on the board of GEICOinsurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett's lifelong friend and a lasting influence and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes. Buffett graduated from Columbia and wanted to work on Wall Street, however, both his father and Ben Graham urged him not to. He offered to work for Graham for free, but Graham refused.

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha. The average age of his students was more than twice his own. During this time he also purchased a Sinclair Texaco gas station as a side investment. However, this did not turn out to be a successful business venture.

As a billionaire

Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share. In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG's board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General's office agreed to a settlement in which AIG would pay a fine of $1.6 billion. In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing 'corporate governance concessions'.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation. In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

In Recent Years

In February 2013, Buffett purchased HJ Heinz with private equity group 3G Capital for $28 billion. 3G, a U.S.-Brazilian company, also owns Burger King and a portion of Anheuser-Busch InBev. According to TIME magazine, Buffett has praised Heinz for making "great-tasting products" and for good management over the past several years.

Buffett is rated No. 14 on Forbes magazine's "World's Most Powerful People" list.