Warren Buffett

Warren Edward Buffett (born August 30, 1930) is a wealthy American investor and businessman. Nicknamed the "Oracle of Omaha", Buffett has amassed an enormous fortune from astute investments, particularly his company Berkshire Hathaway, of which he holds more than 31% as of 2005. With an estimated net worth of $40 billion as of 2005, he is ranked by Forbes as the second-richest person in the world, behind Bill Gates.

Timeline

1945:

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Warren is making $175 monthly delivering Washington Post newspapers. At fourteen years old, he invests $1,200 of his savings into 40 acres (0.2 km²) of farmland.

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1947:

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In his senior year of high school, Warren and a friend purchase a used pinball machine at a cost of $25. Buffett begins to think about the potential profit, and places it in a nearby barber shop. Within months, he owns three machines in three different locations. The business is sold later in the year for $1,200 to a war veteran.

Related Topics:
Pinball machine - War veteran

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Warren has earned over $5,000 delivering newspapers.

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His father presses him to attend college, a suggestion Warren does not take well. Nevertheless, that year, he enrolls as a freshman at the Wharton School of Finance and Commerce in Pennsylvania. Buffett hates it, complaining he knows more than the teachers.

Related Topics:
Wharton School of Finance and Commerce - Pennsylvania

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1949:

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Classmates return to find that Warren is no longer enrolled at Wharton. He has transferred to the University of Nebraska.

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He is offered a job at J.C. Penney after college, but turns it down. He graduates from college in only three years by taking his last three credits over the summer. His savings have reached $9,800.

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1950:

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Buffett applies for admission to Harvard Business School and is turned down. He eventually enrolls at Columbia after learning that Ben Graham and David Dodd, two well-known securities analysts, are professors.

Related Topics:
Harvard Business School - Columbia

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1951:

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Warren discovers Graham is on the Board of GEICO insurance.

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He takes a train to Washington, D.C., and knocks on the door of its headquarters until a janitor lets him in. After asking if anyone is working, he finds a man on the sixth floor, who turns out to be the Financial Vice President of the company. They talk for hours while Warren questions him on the business and insurance in general.

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Buffett graduates and wants to go to work on Wall Street. Both his father and Graham urge him not to. Warren offers to work for Ben Graham for free but Graham refuses.

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Warren returns home and begins dating Susan Thompson.

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Buffett purchases a Texaco gas station as a side investment. It doesn't work out as well as he hopes. Meanwhile, he is working as a stockbroker.

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Buffett takes a Dale Carnegie public speaking course. Using what he learns, he feels confident enough to teach a night class at the University of Nebraska, "Investment Principles". The average age of the students he teaches are more than twice his own (he was only 21 at the time).

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1952:

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Warren and Susan Thompson get married in April. They rent an apartment for $65 a month, and have their first child, named Susie.

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1954:

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Benjamin Graham calls Warren and offers him a job at his partnership. Buffett's starting salary is $12,000 a year.

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1956:

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Graham retires and folds up his partnership. Since leaving college six years earlier, Warren's personal savings have grown from $9,800 to over $140,000.

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The Buffett family returns home to Omaha. On May 1st, Warren creates Buffett Associates, Ltd. Seven family members and friends put in a total of $105,000. Buffett himself invests only $100.

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Over the course of the year, Buffet creates two additional partnerships, eventually bringing the number under his management to three.

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1957:

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Buffett adds two more partnerships to his collection. He is now managing five investment partnerships from his home.

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With Susan about to have her third child, Warren purchases a five-bedroom, stucco house on Farnam Street for $31,500.

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1958:

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The third year of the partnership completed, Buffett doubles the partner's money.

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1959:

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Warren is introduced to Charlie Munger, the man who will eventually become the Vice Chairman of Berkshire Hathaway, and an integral part of the company's success. The two get along immediately.

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1960:

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Warren asks one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.

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1961:

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With the partnerships now worth millions, Buffett made his first $1 million dollar investment in a windmill manufacturing company.

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1962:

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Buffett returns to New York with Susie for a few weeks to raise capital from his old acquaintances. During the trip, he picks up a few partners and several hundred thousand dollars. The Buffett Partnership, which had begun with $105,000, by this time is worth $7.2 million. Warren and Susie personally own over $1 million of the assets.

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Buffett merges all of the partnerships into one entity known simply as Buffett Partnerships, Ltd. The operations are moved to Kiewit plaza, a functional but less-than-grand office, (where they remain to this day). The minimum investment is raised from $25,000 to $100,000.

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Buffett consults Munger on Dempster, the windmill manufacturing company. Munger recommends Harry Bottle to Warren; a move that would turn out to be very profitable. Bottle cut costs, laid off workers, and caused the company to generate cash.

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Warren discovers a textile manufacturing firm, Berkshire Hathaway, that is selling for under $8 per share. He begins to buy the stock.

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1963:

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Buffett sells Dempster for three times the amount he invested. The almost worthless company had built a portfolio of stocks worth over $2 million alone during the time of Buffett's investment. The Buffett partnerships becomes the largest shareholder of Berkshire Hathaway.

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1964:

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Due to a fraud scandal, American Express shares fall to $35. While the world is selling the stock, Buffett begins to buy shares en masse.

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1965:

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Warren's father, Howard, dies. Buffett begins to purchase shares in Walt Disney Co. after meeting with Walt personally. Warren invested $4 million . The American Express shares are selling for more than double the price Warren paid for the them. Buffett arranges a business coup - taking control of Berkshire Hathaway at the board meeting and naming a new President, Ken Chace, to run the company.

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1966:

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Warren's personal investment in the partnership reaches $6,849,936.

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1967:

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Berkshire pays out its first and only dividend of 10 cents. In October, Warren writes to his partners and tells them he finds no bargains in the roaring stock market of the '60s. His partnership is now worth $65 million. Buffett is worth, personally, more than $10 million. He briefly considers leaving investing and pursuing other interests. American Express hits over $180 per share, making the partnership $20 million in profit on a $13 million investment. Berkshire Hathaway acquires National Indemnity Insurance at Buffett's direction. It pays $8.6 million.

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1968:

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The Buffett Partnership earns more than $40 million, bringing the total value to $104 million.

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1969:

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Following his most successful year, Buffett closes the partnership and liquidates its assets to his partners. Among the assets paid out are shares of Berkshire Hathaway. Warren's personal stake now stands at $25 million. He is only 39 years old.

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1970:

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The Buffett Partnership is now completely dissolved and divested of its assets. Warren now owns 29% of the stock outstanding in Berkshire Hathaway. He names himself chairman and begins writing the annual letter to shareholders. Berkshire Hathaway makes $45,000 from textile operations, and $4.7 million in insurance, banking, and investments. Warren's side investments are making more than the actual company itself.

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1971:

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Warren, at his wife's request, purchases a $150,000 summer home at Laguna Beach.

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1973:

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Stock prices begin to drop; Warren is euphoric. At his direction, Berkshire borrows money by issuing notes at 8%. Berkshire begins to acquire stock in the Washington Post Company.

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1974:

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Due to falling stock prices, the value of Berkshire's stock portfolio began to fall. Warren's personal wealth was cut by over 50%. The U.S. Securities and Exchange Commission opens a formal investigation into Warren Buffett and one of Berkshire's mergers. Nothing ever comes of it.

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1975:

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1976:

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1977:

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