Most of us will be familiar with the name Warren Buffett – investment guru, mogul, philanthropist, but where did it all begin? Born in 1930 in Omaha, Nebraska, Buffet bought his first shares at the age of just 11. The price of those shares fell quickly but he held on to them until they rebounded. He sold on the shares before they reached their peak price and learned a key lesson of investing – investing requires patience. In his teenage years he earned money selling newspapers. His grandparents owned a grocery business and his father was a stockbroker and congressman. As a young stockbroker, he worked at his father’s brokerage and credits his father as being one of his greatest teachers.
Early in his career Warren Buffett was keen to focus on a company’s management, leadership and vision as an indicator of its success rather than purely looking at its balance sheet. He has gone on to be one of the most successful investors of our time and one of the wealthiest people in the world. For more than 50 years he has been at the helm of Berkshire Hathaway, a conglomerate with holdings in freight rail, major insurance companies, real estate, newspapers, utilities and names such as Coca Cola, Apple and Johnson & Johnson. The firm and its subsidiaries employ more than 367,000 people globally. Amidst succession concerns, two vice chairmen were recently announced, although Buffett’s departure is not expected any time soon. The company features within the top 10 of the S&P 500 Index.
Buffett is considered one of the most generous of America’s wealthy. Along with friends Bill and Melinda Gates, he set up the Giving Pledge in 2010 with the commitment of 40 of America’s wealthiest, to set a new standard of generosity. They plan to give more than half of their wealth away. Buffett himself has already donated more than 70% of his net worth over the last 10 years or so.
In February, the 87-year-old billionaire issued his annual letter to Berkshire Hathaway shareholders outlining his thoughts for the year ahead. Most noteworthy was the $116 billion war chest they have to spend on acquisitions, of which they did very little in 2017 due to high valuations in the market according to Mr. Buffett. President Trump’s new tax code has saved them close to $29bn in taxes, giving Buffett more firepower. Investors would be wise to keep an eye on Berkshire’s next moves and to where the Oracle allocates his cash pile.
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