Meet Warren Buffett
Fool's School
What do you know about Warren Buffett, one of the world's richest people? Probably not enough.
Born and raised mostly in Omaha, Neb., Buffett was fascinated by the stock market from a very early age. He bought his first shares of stock at the age of 11, making mistakes and losing some money along the way, as every investor does. But he kept learning and applying what he learned. He had $9,000 in the bank when he graduated from high school. (Adjusted for inflation, that's more than $90,000 in today's dollars.)
Today Buffett heads up Berkshire Hathaway, a company he built with his partner, Charlie Munger. It has made many people very rich, and it is actually a collection of many smaller companies that Buffett bought in their entirety, such as Dairy Queen, GEICO, Fruit of the Loom, Benjamin Moore, See's Candies, Executive Jet, FlightSafety, Nebraska Furniture Mart, The Pampered Chef and the Buffalo News (a newspaper company).
He also owns big and small chunks of many other companies, having bought their stock. As of the end of 2006, for example, Berkshire Hathaway owned sizable portions of American Express, Coca-Cola, Procter & Gamble, The Washington Post, Anheuser-Busch, Johnson & Johnson and Wells Fargo.
How has Buffett done? Well, remember that the stock market on average has grown by about 10 percent per year, on average. Meanwhile, Buffett's company has grown by more than 21 percent per year, on average, since 1965, and is now worth more than $200 billion (a fifth of a trillion dollars). Ten thousand dollars invested with Buffett in 1965 has grown to be worth more than $36 million. Buffett is leaving most of his own tens of billions to charity.
Fortunately for us, Warren Buffett is not just a great investor, but also a great teacher, eager to help people be sensible about investing. You can learn from his many educational (and entertaining!) annual letters to shareholders at www.berkshirehathaway. com, and read about his amazing life and achievements in Roger Lowenstein's terrific biography, "Buffett: The Making of an American Capitalist" (Main Street Books, $19).
