Warren Buffett is the best investor in the world. Biography, books, utterances, the way "the oracle from Omaha"

Many people believe that Warren Buffett is the best investor in the world, and not without reason. A man known not only in the United States, but throughout the world, lives in the city of Omaha, Nebraska. He is 73 years old. It is the fifth largest state in the United States - at the end of 2012, amounting to 46.5 billion dollars. But with all this, a large fortune has not turned his head, he tries to live modestly. Warren reminds others that it is not money that has created a person, but a man - money, and encourages others to live easier. The billionaire also urges compatriots to follow their example: not to pursue brands, but to use those things that are convenient.

Why is Warren Buffett loved in the United States?

An important fact that characterizes him as a person is a voluntary refusal of 50% of his property (which is about 37 billion dollars). These funds, he did not hesitate to transfer money to American charity funds with a stroke of the pen. So he reacted to the call of Bill Gates in 2010 to wealthy Americans - to give half of his fortune to the country that made them rich. That was the largest and really impressive act of charity in the world , an example for all well-off people. The funds were mainly transferred to a fund run by the Gates spouses: Bill and the Mellinds. Without exaggeration, the whole country was deeply surprised by this act of a man previously known for its economy. It was a truly patriotic act, a lively response from Buffett's soul to the attack of American twin towers by terrorists.

He is really loved in his native Omaha, he, a billionaire with a world reputation, does not hide from people, he freely visits shops and other public places.

Once, when one of the Omaha schools faced significant financial sanctions and the threat of closure, an elderly couple of teachers from the same school came to the rescue. They transferred several million dollars to the account in question. Where did they get them? Educators were among the first shareholders of the company Buffett, then entrusted him with all of their savings - 25 thousand dollars.

Asked by a reporter how he understands what life success is, he answered that the most important thing is that loving people are around, and how much you have in the bank cell is already a second time. Warren Buffett really has such convictions. News, current events have little impact on his life values. Indeed, this clever, but willful and charismatic person is loved by the family and others.

Warren Buffett is a name known in business

Operations in the securities market most often are speculative. It is assumed, of course, buying stocks at low prices and selling at a higher rate. Many try to carry out two operations at once, at the same time as profitable as possible. But the hero of our article did not go into his enrichment by speculation, he, as experts say, is a "pure investor". His style is different: seven times measure, one cut. The businessman's tail is the purchase of shares of promising companies, which the market subjectively underestimates. This defect has the prospect of being corrected. Only the fact that Warren Buffett himself invested in this company, increases its reputation. He respects the companies - the objects of his investments. He owns the phrase, which must be heard by all investors. It says that it's better to buy a wonderful company by paying an honest price than to buy an honest company at a remarkable price. Principal in the morals of the business is Warren Buffett. His statements testify to this.

Securities he buys only from companies, only making sure that their real value is higher than the proposed one. And such shares are in his portfolio for at least ten years. Enterprises are working steadily, and the value of their shares is growing at this time. He is not interested in short-term speculation, unlike George Soros. Such a position, of course, is constructive: production gets a boost to development. Compatriots are sure: it stimulates the US economy by its activities Warren Buffett. Photos of this worthy person often publish newspapers and magazines. He willingly gives interviews. This businessman and philanthropist is loved in the country and there is - for that ... After all, he basically defends investment and criticizes speculation. He calls on other businessmen not to cross the line between these concepts, to be "for the whole country," and not just "for themselves."

Its principle is to invest in enterprises with impeccable management. Therefore, he studies not only their balance, but also the production structure, as well as the biographies of managers. This investor resembles an agronomist looking for the proper soil to plant a grain in it. His favorite investment option is when companies, thanks to investment, continue to develop consistently. Therefore, he chooses undervalued assets. Telling how to choose a company for investment, Buffett says with the words of his teacher Ben Graham that the meaning appears when comparing the price (the one that we pay) and the cost (of what we get).

If you consider Warren Buffett as an exchange investor, then his average annual income is only 24%. And this is in the area where it happens that lucky people "snatch" the jackpot in 500%! How many such devils with brilliant one-off deals have Warren seen? But luck for them is a lady inconsistent, and with the hero of our article she goes on arm for more than 50 years, without leaving him alone.

Buffett is sure that all the present is experienced by time, but speaks of this, as always, in an unconventional and figurative way, applying the following comparison: at low tide it becomes noticeable who bathed naked.

Why was he nicknamed the "Oracle of Omaha"?

Everything he did in life, literally everything, was successful. (The Buffett biography discussed in this article will convince you of this.) His predictions are amazingly coming true. Everything he said publicly, is carefully analyzed. On Wall Street, not less weight than the word of the President of the country, has what Warren Buffett will say. Quotations from his speech may even crush the company. So, one day speaking to his shareholders, he voiced his opinion that soon one of the major companies of the reinsurance market would collapse. Analysts, analyzing the debts of different companies to primary insurers, determined that this is the seventh-rated German insurance company Gerling Global Re in the world. Warren's statements were sufficient to ensure that the services of this really unprofitable company were no longer used by clients.

At the beginning of the new century, analysts were perplexed: why does Buffett not invest in the development of modern technology? Journalists even scoffed at the old-fashioned billionaire who does not use either a computer or a calculator (Warren determines the benefits from his childhood by multiplying two- and three-digit figures in his mind). However, after a couple of years the index of the technological market of NASDAQ began to decrease systematically, the companies-investors suffered significant losses. What did Warren Buffett say? Quotations it on this occasion laconic - "And I warned you ..."

In 2006, the famous investor predicted a catastrophe in the US real estate market. To do this, he used his "own" indicator - house prices should not grow much faster than costs. The events of 2007-2008 - housing, bought out under the mortgage by citizens, became massively alienated from them for debts.

Worried about the US budget deficit, in 2003 and 2004, Twice predicted the fall of the US dollar, investing some of its funds in other currencies.

The first steps in business

His father was the owner of a brokerage company and a congressman. However, since childhood, Warren tried to earn his money and do his own thing. His first deal was speculative: the boy bought a few cans of "Coca-Cola" from his grandfather's store and sold them home twice as much. So began the way of Warren Buffett in business. At the age of 11 he first tried to play on courses, first buying, and then selling three shares. Then he hurried to sell the shares because of the minimum profit. However, their price soon increased six-fold. There was no need to hurry. This served as a lesson for Warren.

Since the age of thirteen, he worked at the post office, delivering the Washington Post newspaper. The work was piece-rate and, having developed his system, he began to earn more than the post office chief. At the age of 15-17, together with a friend, they bought and installed in the city three used slot machines. By the age of 17, he had the means of $ 5,000, which, in terms of the inflation index, amounted to more than $ 40,000. Warren was "charged" to make money and become a millionaire by the age of 30. But his father convinced him of the need to get an education. The University of the District of Columbia reduced it to a prominent theoretician of the financial market and investment Graham, who was able to interest his slender theory of the young man. Tao Warren Buffett was found! Now he knew what he would do in life - to invest.

The financial market is the vocation of Warren Buffett

Upon graduation, Warren began working as a manager in his father's company. At the age of 22 he married Suzanne Thompson. Two years later he organized a company on the shares of friends and acquaintances. Then he had experience in the company of his teacher Ben Graham - investment fund "Graham-Newman", located on Wall Street. At this stage, he already has a fortune of 140 thousand US dollars. Despite the opening prospects, Warren makes the decision - to build their own business. He returns to Omaha and, having managed to raise funds from friends and relatives, establishes his company-fund "Buffett Associates". Since the beginning of the 60's, the shares of this company in the first 5 years have grown by 251%, while on average the American stock market has "risen" by 74%. The next 5 years, this gap is further increased: 156% of Warren's invested companies and 122% - in the rest of the market. A childhood dream comes true - it becomes a millionaire. Warren Buffett has established himself as a subtle specialist in mergers and acquisitions. He has major investments in America's insurance business.

The second stage of his activity began in 1969, when he invested all the funds raised by the Buffett Associates fund (which is $ 102 million) in the ruined textile company Berkshire Hathaway, thereby giving it a push to develop. An experienced analyst noted, based on an assessment of assets, that the real price of one share was $ 20, while it was sold for 8. But the textile business was not an end point, but an intermediate base for the following investments. The profit from the sale of products was sent to them in the purchase of securities of insurance companies. America at that time formed its insurance market, and significant government benefits were a guarantee of high profitability of the insurance business. A wise and far-reaching strategy was chosen by Warren Buffett. His biography as an investor on a national scale began precisely at this stage, when the five largest US insurance companies became his property.

In the future, an investment mechanism was launched, based on the redistribution of insurance premiums of customers to these companies. For a portion of the funds received "in advance", bankrupt "hard" companies were buying up. Having received a financial support, almost immediately they went out to profit. Thus, thanks to the profits of skillfully invested enterprises, another source of funding was received by Warren Buffett. His biography testifies: having exchanged the fifth decade, he became the owner of a 28-billion fortune.

The largest investment of the Oracle from Omaha

His investments are more than convincing. Investing in companies that are undervalued by the market has had a striking effect. The shares of Coca-Cola, bought by him for 1.3 billion dollars, rose in price to 13.4 billion dollars; Gillette - from 0.6 billion dollars - up to 4.6 billion dollars; And $ 0.01 billion invested in the Washington Post, $ 1 billion.

The billionaire also has a 4.3% stake in McDonalds.

Note that this person invests in something that he has known since childhood and that is close to him as a person. Let us recall (we have already talked about this) about the first commercial experience of the six-year Warren selling to parents six cans of Coca-Cola, bought from his grandfather. Moreover, every day the Oracle drinks five jars of "Cherry Coke". Or the Washington Post: did not it bring the young Buffett on a bicycle, getting the first decent income in her life? Namely, hamburgers are the favorite food of a brilliant investor.

The principles of investing Warren Buffett - thoughtful and successful, which is tested by practice, have long become well-known. They are organically consistent with his life principles.

Somehow in the working order, gradually, in the management process, created Warren Buffett's Essays on Investments, in which he developed the ideas of Ben Graham. Initially, these were his business letters to the shareholders of a diversified corporation, grown from a textile company Berkshire Hathaway (and still carrying this name). The reason for the publication of this book is purely practical: a reasonable formulation by the author of the ideas of the financial market and the destruction of myths existing there. The nature of investment and building a business is delicately disclosed. The author emphasizes that meaningful investments are impossible without proper audit of accounting documents, analysis of the company's economic life.

Buying the company, Buffett appoints its CEO, determines the order of payment. This is the only thing that he does, the investor. Operational management of the company Oracle from Omaha did not concern. The management structure did not change. The director appointed by him, stimulated by the opportunity to participate in the option of the company's shares, raised the capitalization himself.

Life principles of a great investor

First, the Oracle from Omaha believes that wealth is a state of mind. If a person associates himself with wealth, then he will become rich.

However, he does not associate a person's success with a bank account. It is important that he does what he likes and there are people around him who love him. He also recommends that people learn to spend less than earn, not to get involved in consumer loans. He recommends spending time with people, better than you, as it will mobilize you for further progress. The last of the principles of the Oracle says that those who want to receive more must also give more.

He is devoted to his company to the point that 99% of his capital holds in her shares. By the way, his associate Charlie Manger, following his example, also invested 90% of his fortune in the company's shares. This, according to Warren, is the best guarantee of unanimity and unity of shareholders of the company Berkshire Hathaway with its managers, necessary for effective leadership of it. In 2004, after the death of Susan Buffett's wife, Warren's best friend Bill Gates entered the board of directors.

It should be noted the peculiarity of this company. For more than 40 years of its history, none of the shares of Berkshire Hathaway has been sold. During this time, the cost of each share rose from $ 8 (remember, when buying a textile company) to 90.5 thousand dollars. The shareholders of this company, not least thanks to the charisma of its leader, are not isolated businessmen, but an elite club, single, monolithic, charged to work together.

He does not like computers. In the house he does not have any. The only weakness of the Oracle from Omaha is private jet planes.

Thrift or greed?

He, in spite of his wealth, did not go to live in the "state of millionaires" - California, he did not erect imaginary real estate. Although the funds allow him to build himself almost a city. The house of Warren Buffett at Farnham Street was bought by him in the 50s in his native Omaha for 34 thousand dollars. He basically does not receive dividends from the corporation that he owns (Berkshire Hathaway). He lives on a salary, he drives a second-hand Lincoln. He dines in the same dining room where he ate, still being a clerk.

He dresses in ordinary stores. Once, to the question of a malicious journalist about the cost of his costumes, he answered so that he laughed the whole of America. As it follows from his answer, the costumes are very expensive, they just look cheap on it.

Surprising associates of the tight-nosedness of this person even in relation to native children. When the son of Howard wanted to farm and came to his father with a request that he buy a farm for him, he set a condition: he buys - in his name, and the son rents his farm, while paying him a rent. Suzy's daughter once appealed to him, asking for a small sum to pick up the car from the airport's paid parking. Of course, he gave the money, but at the same time asked his daughter to write a receipt for the received $ 20.

Warren Buffett loves cartoons. Loved - "Duck stories" with Scrooge McDuck - the main character. It's not even a cartoon. The key phrase "Duck Goose": "The Saved Dollar is a Dollar's Dollar" Walt Disney noticed and "stole" from the main character of our article.

A mistake still was

Is the writer Warren Buffett? He did not write purposefully. But he worked so creatively that his letters to shareholders, collected and systematized, published, readable and of value.

Only once - in 2005 the forecast of the great financier did not come true. He bet on the fall of the dollar. On the contrary, it was growth. The prototype of Scrooge McDuck lost about $ 900 million on this, which, however, was blocked by the profit of the company he led to $ 2 billion. But this is unconvincing, but still - an excuse: in 2005 same year, "flew", putting on the same, Bill Gates and Soros.

Why did it happen so? Responding to journalists on this question, Buffett with his usual humor said that if in physics mechanical movements obey Newton's laws, then in the society human madness is not subject to measurement.

In addition to his will, he became a writer Warren Buffett. His books are in demand, he has the talent to write simply about the complex, probably the matter of intellect and experience.

Will of the Oracle

In a will after death for his family, he leaves a small percentage. Virtually the whole state - 99% will go to the Warren Buffett Foundation. The fund is managed by Allen Greenberg, the former son-in-law of a genius investor. If during the life of the father-in, he contributes to this fund only a small percentage of his fortune - $ 10 million, then, you can imagine what a solid company he will suddenly turn into after his death. Another question: what will the Berkshire Hathaway company, led by the charisma of the Oracle from Omaha, become after this mournful event? However, for compatriots, the Oracle from Omaha leaves an optimistic forecast, indicating that in the future the stock market will grow.