Warren Buffett is Born Warren Edward Buffett was born on August 30, 1930 to his father Howard, a stockbrokerturned-Congressman.

The only boy, he was the second of three children, and displayed an amazing aptitude for both money and business at a very early age. Acquaintances recount his uncanny ability to calculate columns of numbers off the top of his head - a feat Warren still amazes business colleagues with today. At only six years old, Buffett purchased 6-packs of Coca Cola from his grandfather's grocery store for twenty five cents and resold each of the bottles for a nickel, pocketing a five cent profit. While other children his age were playing hopscotch and jacks, Warren was making money. Five years later, Buffett took his step into the world of high finance. At eleven years old, he purchased three shares of Cities Service Preferred at $38 per share for both himself and his older sister, Doris. Shortly after buying the stock, it fell to just over $27 per share. A frightened but resilient Warren held his shares until they rebounded to $40. He promptly sold them - a mistake he would soon come to regret. Cities Service shot up to $200. The experience taught him one of the basic lessons of investing: patience is a virtue. Warren Buffett's Education In 1947, a seventeen year old Warren Buffett graduated from High School. It was never his intention to go to college; he had already made $5,000 delivering newspapers (this is equal to $42,610.81 in 2000). His father had other plans, and urged his son to attend the Wharton Business School at the University of Pennsylvania. Buffett stayed two years, complaining that he knew more than his professors. When Howard was defeated in the 1948 Congressional race, Warren returned home to Omaha and transferred to the University of Nebraska-Lincoln. Working full-time, he managed to graduate in only three years. Warren Buffett approached graduate studies with the same resistance he displayed a few years earlier. He was finally persuaded to apply to Harvard Business School, which, in the worst admission decision in history, rejected him as "too young". Slighted, Warren applied to Columbia where famed investors Ben Graham and David Dodd taught - an experience that would forever change his life. Ben Graham - Buffett's Mentor Ben Graham had become well known during the 1920's. At a time when the rest of the world was approaching the investment arena as a giant game of roulette, he searched for stocks that were so inexpensive they were almost completely devoid of risk. One of his best known calls was the Northern Pipe Line, an oil transportation company managed by the Rockefellers. The stock was trading at $65 a share, but after studying the balance sheet, Graham realized that the company had bond holdings worth $95 for every share. The value investor tried to convince management to sell the portfolio, but they refused. Shortly thereafter, he waged a proxy war and secured a spot on the Board of Directors. The company sold its bonds and paid a dividend in the amount of $70 per share.

When he was 40 years old, Ben Graham publishedSecurity Analysis, one of the greatest works ever penned on the stock market. At the time, it was risky; investing in equities had become a joke (theDow Jones had fallen from 381.17 to 41.22 over the course of three to four short years following the crash of 1929). It was around this time that Graham came up with the principle of "intrinsic" business value - a measure of a business's true worth that was completely and totally independent of the stock price. Using intrinsic value, investors could decide what a company was worth and make investment decisions accordingly. His subsequent book, The Intelligent Investor, which Warren celebrates as "the greatest book on investing ever written", introduced the world to Mr. Market - the best investment analogy in history. Through his simple yet profound investment principles, Ben Graham became an idyllic figure to the twenty-one year old Warren Buffett. Reading an old edition of Who's Who, Warren discovered his mentor was the Chairman of a small, unknown insurance company named GEICO. He hopped a train to Washington D.C. one Saturday morning to find the headquarters. When he got there, the doors were locked. Not to be stopped, Buffett relentlessly pounded on the door until a janitor came to open it for him. He asked if there was anyone in the building. As luck (or fate) would have it, there was. It turns out that there was a man still working on the sixth floor. Warren was escorted up to meet him and immediately began asking him questions about the company and its business practices; a conversation that stretched on for four hours. The man was none other than Lorimer Davidson, the Financial Vice President. The experience would be something that stayed with Buffett for the rest of his life. He eventually acquired the entire GEICO company through his corporation, Berkshire Hathaway.

Here Are 18 Brilliant Quotes From The Greatest Investor Of All Time

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MBA Without BachelorFor Managers Top British Online MBA in 18 Months Recognized Worldwidecollege.ch The Oracle of Omaha, Warren Buffett turns 82 years young today.
He may be one of the wealthiest people in the world. But he's also known as the billionaire next door. He comes off as humble and sometimes uses self-deprecating humor. Maybe it has something to do with the fact that he's lived in Omaha, Nebraska for most of his life. Buffett also uses extremely easy-to-understand language when referring to business and investments. Many of his most thoughtful quotes are found in his annual letters to Berkshire Hathaway shareholders, which are must reads. But some of his gems come from random interviews, speeches, and op-ed pieces. We compiled a few of the best quotes from the Oracle of Omaha. If we've missed any of your favorites, let us know in the comments.

Rules That Warren Buffett Lives By

By Stephanie Loiacono | Investopedia Tue, Feb 23, 2010 3:00 AM EST
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Warren Buffett is arguably the world's greatest stock investor. He's also a bit of a philosopher. He pares down his investment ideas into simple, memorable sound bites. Do you know what his homespun sayings really mean? Does his philosophy hold up in today's difficult environment? Find out below. "Rule No. 1: Never Lose Money. Rule No. 2: Never Forget Rule No. 1." Buffett personally lost about $23 billion in the financial crisis of 2008, and his company, Berkshire Hathaway, lost its revered AAA ratings. So how can he tell us to never lose money? He's referring to the mindset of a sensible investor. Don't be frivolous. Don't gamble. Don't go into an investment with a cavalier attitude that it's OK to lose. Be informed. Do your homework. Buffett invests only in companies he thoroughly researches and understands. He doesn't go into an investment prepared to lose, and neither should you. Buffett believes the most important quality for an investor is temperament, not intellect. A successful investor doesn't focus on being with or against the crowd. The stock market will swing up and down. But in good times and bad, Buffett stays focused on his goals. So should we. (This esteemed investor rarely changes his long-term investing strategy no matter what the market does.
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Think Like Warren Buffett

"If The Business Does Well, the Stock Eventually Follows" The Intelligent Investor by Benjamin Graham convinced Buffett that investing in a stock equates to owning a piece of the business. So when he searches for a stock to invest in, Buffett seeks out businesses that exhibit favorable long-term prospects. Does the company have a consistent operating history? Does it have a dominant business franchise? Is the business generating high and sustainable profit margins? If the company's share price is trading below expectations for its future growth, then it's a stock Buffett may want to own. Buffett never buys anything unless he can write down his reasons why he'll pay a specific price per share for a particular company. Do you do the same? "It's Far Better to Buy a Wonderful Company at a Fair Price Than a Fair Company at a Wonderful Price" Buffett is a value investor who likes to buy quality stocks at rock-bottom prices. His real goal is to build more and more operating power for Berkshire Hathaway by owning stocks that will generate solid profits and capital appreciation for years to come. When the markets reeled during the recent financial crisis, Buffett was stockpiling great long-term investments by investing billions in names like General Electric and Goldman Sachs. To pick stocks well, investors must set down criteria for uncovering good businesses, and stick to their discipline. You might, for example, seek companies that offer a durable product or service and also have solid operating earnings and the germ for future profits. You might establish a minimum market capitalization you're willing to accept, and a maximum P/E ratio or debt level. Finding the right company at the right price -- with a margin for safety against unknown market risk -- is the ultimate goal. Remember, the price you pay for a stock isn't the same as the value you get. Successful investors know the difference.
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"Our Favorite Holding Period Is Forever" How long should you hold a stock? Buffett says if you don't feel comfortable owning a stock for 10 years, you shouldn't own it for 10 minutes. Even during the period he called the "Financial Pearl Harbor," Buffett loyally held on to the bulk of his portfolio. Unless a company has suffered a sea change in prospects, such as impossible labor problems or product obsolescence, a long holding period will keep an investor from acting too human. That is, being too fearful or too greedy can cause investors to sell stocks at the bottom or buy at the peak -- and destroy portfolio appreciation for the long run. You may think the recent financial meltdown changed things, but don't be fooled: those unfussy sayings from the Oracle of Omaha still RULE!

Think Like Warren Buffett

February 26 2009| Filed Under Business Leader, Buy and Hold, Money Management, Trading Psychology, Value Investing, Warren Buffett Back in 1999, Robert G. Hagstrom wrote a book about the legendary investor Warren Buffett, entitled "The Warren Buffett Portfolio". What's so great about the book, and what makes it different from the countless other books and articles written about the "Oracle of Omaha" is that it offers the reader valuable insight into how Buffett actually thinks about investments. In other words, the book delves into the psychological mindset that has made Buffett so fabulously wealthy. (For more on Warren Buffett and his current holdings, check out Coattail Investor.) Although investors could benefit from reading the entire book, we've selected a bite-sized sampling of the tips and suggestions regarding the investor mindset and ways that an investor can improve their stock selection that will help you get inside Buffett's head. 1. Think of Stocks as a Business Many investors think of stocks and the stock market in general as nothing more than little pieces of paper being traded back and forth among investors, which might help prevent investors from becoming too emotional over a given position

but it doesn't necessarily allow them to make the best possible investment decisions. That's why Buffett has stated he believes stockholders should think of themselves as "part owners" of the business in which they are investing. By thinking that way, both Hagstrom and Buffett argue that investors will tend to avoid making off-thecuff investment decisions, and become more focused on the longer term. Furthermore, longer-term "owners" also tend to analyze situations in greater detail and then put a great eal of thought into buy and sell decisions. Hagstrom says this increased thought and analysis tends to lead to improved investment returns. (To read more about Buffett's ideologies, check out Warren Buffett: How He Does It and What Is Warren Buffett's Investing Style?) 2. Increase the Size of Your Investment While it rarely - if ever - makes sense for investors to "put all of their eggs in one basket," putting all your eggs in too many baskets may not be a good thing either. Buffett contends that over-diversification can hamper returns as much as a lack of diversification. That's why he doesn't invest in mutual funds. It's also why he prefers to make significant investments in just a handful of companies. (To learn more about diversification, read Introduction To Diversification, The Importance Of Diversification and The Dangers Of Over-Diversification.) Buffett is a firm believer that an investor must first do his or her homework before investing in any security. But after that due diligence process is completed, an investor should feel comfortable enough to dedicate a sizable portion of assets to that stock. They should also feel comfortable in winnowing down their overall investment portfolio to a handful of good companies with excellent growth prospects. Buffett's stance on taking time to properly allocate your funds is furthered with his comment that it's not just about the best company, but how you feel about the company. If the best business you own presents the least financial risk and has the most favorable long-term prospects, why would you put money into your 20th favorite business rather than add money to the top choices? 3. Reduce Portfolio Turnover

Rapidly trading in and out of stocks can potentially make an individual a lot of money, but according to Buffett this trader is actually hampering his or her investment returns. That's because portfolioturnover increases the amount of taxes that must be paid on capital gains and boosts the total amount of commission dollars that must be paid in a given year. The "Oracle" contends that what makes sense in business also makes sense in stocks: An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business. Investors must think long term. By having that mindset, they can avoid paying huge commission fees and lofty short-term capital gains taxes. They'll also be more apt to ride out any short-term fluctuations in the business, and to ultimately reap the rewards of increased earnings and/ordividends over time. 4. Develop Alternative Benchmarks While stock prices may be the ultimate barometer of the success or failure of a given investment choice, Buffett does not focus on this metric. Instead, he analyzes and pores over the underlying economics of a given business or group of businesses. If a company is doing what it takes to grow itself on a profitable basis, then the share price will ultimately take care of itself. Successful investors must look at the companies they own and study their true earnings potential. If the fundamentals are solid and the company is enhancing shareholder value by generating consistentbottom-line growth, the share price, in the long term, should reflect that. (To learn how to judge fundamentals on your own, see What Are Fundamentals?) 5. Learn to Think in Probabilities Bridge is a card game in which the most successful players are able to judge mathematical probabilities to beat their opponents. Perhaps not surprisingly, Buffett loves and actively plays the game, and he takes the strategies beyond the game into the investing world. Buffett suggests that investors focus on the economics of the companies they own (in other words the underlying businesses), and then try to weigh the probability

that certain events will or will not transpire, much like a Bridge player checking the probabilities of his opponents' hands. He adds that by focusing on the economic aspect of the equation and not the stock price, an investor will be more accurate in his or her ability to judge probability. Thinking in probabilities has its advantages. For example, an investor that ponders the probability that a company will report a certain rate of earnings growth over a period of five or 10 years is much more apt to ride out short-term fluctuations in the share price. By extension, this means that his investment returns are likely to be superior and that he will also realize fewer transaction and/or capital gains costs. 6. Recognize the Psychological Aspects of Investing Very simply, this means that individuals must understand that there is a psychological mindset that the successful investor tends to have. More specifically, the successful investor will focus on probabilities and economic issues and let decisions be ruled by rational, as opposed to emotional, thinking. More than anything, investors' own emotions can be their worst enemy. Buffett contends that the key to overcoming emotions is being able to "retain your belief in the real fundamentals of the business and to not get too concerned about the stock market." Investors should realize that there is a certain psychological mindset that they should have if they want to be successful and try to implement that mindset. (To learn more about investor behaviors, read Understanding Investor Behavior, When Fear And Greed Take Over and Master Your Trading Mindtraps.) 7. Ignore Market Forecasts There is an old saying that the Dow "climbs a wall of worry". In other words, in spite of the negativity in the marketplace, and those who perpetually contend that a recession is "just around the corner", the markets have fared quite well over time. Therefore, doomsayers should be ignored. On the other side of the coin, there are just as many eternal optimists who argue that the stock market is headed perpetually higher. These should be ignored as well.

In all this confusion, Buffett suggests that investors should focus their efforts of isolating and investing in shares that are not currently being accurately valued by the market. The logic here is that as the stock market begins to realize the company's intrinsic value (through higher prices and greater demand), the investor will stand to make a lot of money. 8. Wait for the Fat Pitch Hagstrom's book uses the model of legendary baseball player Ted Williams as an example of a wise investor. Williams would wait for a specific pitch (in an area of the plate where he knew he had a high probability of making contact with the ball) before swinging. It is said that this discipline enabled Williams to have a higher lifetime batting average than the average player. Buffett, in the same way, suggests that all investors act as if they owned a lifetime decision card with only 20 investment choice punches in it. The logic is that this should prevent them from making mediocre investment choices and hopefully, by extension, enhance the overall returns of their respective portfolios. Bottom Line "The Warren Buffett Portfolio" is a timeless book that offers valuable insight into the psychological mindset of the legendary investor Warren Buffett. Of course, if learning how to invest like Warren Buffett were as easy as reading a book, everyone would be rich! But if you take that time and effort to implement some of Buffett's proven strategies, you could be on your way to better stock selection and greater returns.

Achievements:

Warren Buffet is mainly famous for being the third richest man in the world, but his main achievements are probably as an investor and a philanthropist. Unlike, for example, Bill Gates, Buffet never had a product or invention to make him rich. He started early as an investor, working as a stockbroker while still very young, and even lectured on the best way to invest. Having made his first million, he quickly increased this by taking over and merging several firms, and by 1990 had become a billionaire. Today he is worth well over 30 billion dollars. Despite his wealth he has always lived modestly and not spent much money on himself. In recent years, Buffet has become even more famous for giving money away than for making it. He plans to give most of his fortune to the Bill and Melinda Gates foundation for relieving poverty, and has donated to many other causes. He does not plan to leave too much money to his children as he wants them to remain independent.

Warren Buffett Time Line 1930 August 30th, Warren Buffett born in Nebraska, Omaha USA 1943 Filed his first income tax return at the mere age of 13, deducting his bicycle as a work expense for $35 1945 Spent $25 to purchase a used pinball machine. Owned three more machines from profits within months 1949 Initiated into the Alpha Sigma Fraternity while pursuing his undergraduation at Wharton Business School at the University of Pennsylvania 1950 Enrolled at Columbia Business School when he learnt that two famous analysts, Benjamin Graham and David Dodd taught there

1951 Graduated from Columbia and tried to work with Graham for free but was rejected. Worked as a stockbroker for sometime and also took night classes for students in the University of Nebraska 1952 Got married to Susan Thompson 1954 Had their first child Howard Graham Buffett. Entered a partnership with Benjamin Graham and worked for a salary of $12,000 p.a. 1956 Graham retires, ends partnership. Buffet saves over $140,000 and returns to Omaha and starts an investment partnership, Buffett Associates, Ltd. 1960 Business grew; buffet had seven partnerships operating the entire year. 11 doctors agree to invest $10,000 each into his partnership. 1962 Buffetts partnership had in excess of $7,178,500 out of which $1,025,000 belonged to Buffett. Merges all partnerships into one. Discovers Berkshire Hathaway 1965 Buffetts partnerships begin to purchase Berkshire shares aggressively. Takes control of Berkshire Hathaway and names a new President (Ken Chace) to run the company. 1967 Berkshire pays out its first and only dividend of 10 cents. 1969 Buffet liquidates partnership and transfers the assets to his partners, including the shares of Berkshire 1973 Berkshire begins to acquire stocks in Washington Post Company 1979 Berkshire acquires stocks in ABC. Buffetts net worth rocketed to $140 million. The year ended at $1310 in share trading sending his net worth to $620 million, placing him on the Forbes 400 for the first time

1988 Buys stock in Coca-Cola for $1.02 billion, which turns out to be one of the most lucrative investments 2004 Susan, his wife, dies 2006 Buffet announced to give away 80% of his total fortune to five foundations, the largest contribution going to Bill and Melinda Gates Foundation 2007 Buffett announced he is looking for a younger successor to run his business. Lou Simpson was chosen by Buffett for the role, though he is only six years younger! 2008 Forbes announces Buffett as the richest man in the world

Warren Buffett He is a known as the most successful investor who single-handedly turned the fortune of his small company and made it a giant investment vehicle. Forbes lists him as one of the richest man in the world and is often referred to as Oracle of Omaha. Warren Buffetts life is an extraordinary story of determination, will power and the right vision of success. For the billionaire that he is, Buffett leads a very simple lifestyle, lives in a house he bought ages back and dresses up in normal clothes instead of big brand names. He contributed a huge sum of his fortune to the Bill and Melinda Gates Foundation in order to improve living conditions of poor people. Warren Buffett was born on August 30th, 1930 in Omaha, Nebraska. Since a very young age, he displayed a keen interest and extraordinary talent in numbers and at the mere age of 11, he started buying shares in the stock market. Buffett brought three shares of Cities Service at $38 for himself and his older sister. The shares rebounded to $40 after falling to almost $27 and that was the time he sold them. However, after some time, the value rose to $200. He learnt one of the most important lessons of investment through this experience Patience is a Virtue.

He graduated from high school but never wanted to go to college as such. On persistence from his father, he enrolled himself into the Wharton Business School. He stayed there for two years and then moved back home and got transferred to the University of Nebraska, teaching students twice his age. He tried to get into Harvard Business School, but got rejected because they thought he was too young! He moved to do a Masters in Economics at Columbia University and there he found his mentor Benjamin Graham. After working here and there for sometime, he was offered to work for Benjamin Graham as a security analyst. His fortune rose to $140,000. Thereafter, he began his own company, Buffet Partnership and increased his capital wealth to $300,000 by the end of the year. At that time, Berkshire Hathaway was a small textile company in which he had invested. This company was liquidated after sometime but the name was retained and was turned into an investment business. Buffett became the chairman of the company and with time and persistence he tuned the small textile company into a giant investment vehicle that it is today. Buffett leads a very simple life considering his status. He absolutely loves Coca-Cola and burgers and is an ardent player of the game Bridge. Buffett is a very generous man and has donated huge sums of his fortune to many helpful foundations, the biggest sum going to the Bill and Melinda Gates Foundation. Checkout his time line as given below.