Warren Buffet
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Table of Contents
Warren Buffett
Frugal Billionaire
Philanthropic Activities
Fundraising
Finance
Implications
Works Cited
Warren Buffett
Frugal Billionaire
Warren Buffett a successful business man from Omaha Nebraska grew up with an uncanny ability to calculate numbers that have helped him succeed (Kennon 1). The great success that Buffett has had has led him to reach out and support a great number of people as well as charitable organizations. He has developed a command over investing that has led to the nickname the “Oracle of Omaha” due to his ability to pick stocks that others would question their growth potential. Buffetts financial wizardry has always led others to ask for stock tips something he has not done since his time as a stock analyst in the 1950s. His life, philanthropic activities, fundraising, and success as chief executive officer of Berkshire Hathaway are the things that have fueled Buffetts success.
Growing up Buffett was always on the lookout for ways to turn a profit. He made his first stock purchase at the age of eleven and learned his first lesson about investing and that was that patience is a virtue (Kennon 1). Graduating from college while working full time in just three years his greatest difficulty was finding that he knew more about business and investing then his instructors did. Against his personal feelings, he listened to his father and decided to pursue a masters degree only to be turned away from Harvard because he was too young. He then applied and began his masters at Colombia where famed investor Ben Graham was teaching, Graham quickly became Buffetts mentor. The only student to receive an A+ in Grahams class Buffett was determined to work on Wall Street. Both Graham and his father dissuaded him from Wall Street; Graham even rejected Buffetts offer to work with no pay at his firm (Kennon 2). Working in the brokerage house that his father owned he met and married the woman he later referred to as the “the sunshine and rain in his garden” (Kennon 4). In the 50s he finally got his chance to work for his idol Graham. This is when Buffetts investment style began to diverge from that of his mentor. In 1956, Buffett began making his move from that of stock analyst to investment mogul. These events led him to the understanding of investment and making a difference in the world that others will likely never attain.
Philanthropic Activities
True to form, Buffett has always found ways to donate ranging from allowing stockholders to choose foundations they would like to support to the most recent pledging nearly 85% of his assets to the four Buffett family foundations and the Bill and Melinda Gates foundation (Sloan 1). He has found a way to not only make the largest donation in history, he has sculpted it in such a fashion that even the most savvy investors are impressed with the fashion of his donation. Buffetts initial plan was to have his assets dispersed to these charities after his death, which he has now changed to donating nearly 5% of the gift per year (Sloan 2). The Gates foundation was the ideal group to allow the grant to distribute the donation without negatively impacting the stock price by having huge numbers of shares put into the market at once (Sloan 2). This method of dispersing the funds also allows Buffett to maintain control over Berkshire Hathaway by converting less of his A shares to B shares, which do not have as much voting stake, thus reducing his ownership stake more gradually (Sloan 2). Currently Berkshire Hathaway has so few shares outstanding that with the conversion of his A shares to B shares that it will begin trading on the Standard & Poors 500. This will create additional demand for the stock and will further drive the price of this stock, further increasing the value of the donation that he has pledged (Sloan 3). Again, this is one of the many reasons so many look to Buffet because even in his philanthropy he finds ways to further increase his contributions.
Fundraising
Having his father represent Nebraska in Congress (Kennon 1) Buffet sees the importance of quality representatives in the government. Buffett backs democrats ranging from governorships to presidential campaigns. In 2003 he supported Arnold Schwarzeneggers bid for California and is currently involved with Hillary Clintons bid for the presidency in 2008 (Tse 1). Six hundred people turned out and spent $4600 per plate in part to support Clinton, while others likely went to hear Buffetts insights into the economy and political views. Recently a Californian who has his own investment firm paid over $650,000 to have the opportunity to have lunch with Buffett and ask questions of the “Oracle” which is a indicator of how valuable his opinions and concepts are to the country. These two most recent fundraising efforts hauled in over 1.65 million dollars for two causes, which Buffett believes in and because of this, others take notice and do what they can to make a difference in the U.S.
Finance
Buffett has seen his company grow from a stock par value of $5 to a stock that is trading over $110,000 this is due in part to his unique style of turning companies around. Buffett buys them out, puts a management team together, and gives them control over how to rectify the mismanagement that led to the position that was causing investors to shy away. One of the first companies that Buffett turned around was the insurance company that his mentor had invested in during his early years which was Geico. Buffett