Who is Warren Buffett and why are investors obsessed with him.

Ask anyone who they think the most successful and prominent investor of the modern era is and you'll likely get the same answer. Warren Buffett!  As one of the top 5 wealthiest people in the world, Buffett has an incredible track record for investing in successful companies. So much so that he's long been nicknamed the Oracle of Omaha. Alluding to his ability to seemingly predict which companies would do well over time. But who exactly is Warren Buffett? Yes most of us know that he's the CEO of Berkshire Hathaway, but how did he get to where he is today and why are investors so infatuated with him? 

Well as someone who spent a lot of time wondering what a Berkshire Hathaway was before university, I thought it would be an interesting topic to cover these questions So that beginners can better understand Buffett's fervent following. So let's explore who Warren Buffett is and how he came to be known as the most successful investor in the world.

Warren Edward Buffett was born August 30th 1930 in Omaha, Nebraska amidst the Great Depression. In the worst stock market crash in US history. During which time his father Howard Buffett actually started his own investment firm. As a child, Warren had an aptitude for numbers and a genuine love for reading. Which led him to go through every piece of literature at his father's office instilling in him at a young age, a deep understanding of the value of money and compounding. 

Now like most children Buffett enjoyed playing games in the competition, but this manifested in Buffett as a love for entrepreneurship, And the challenge of turning money into more money. Which led him to carry out a number of ventures through his childhood. Early on his pursuits while certainly ambitious for any child were more conventional starting at the age of 7. Warren went door to door selling Coca Cola and bubblegum to supplement his allowance and later shifted to delivering papers and even selling magazine subscriptions. But Buffett bought his first stock at the early age of 11 and in his teens, he started pursuing larger ventures. Investing his savings in farmland and even starting a business placing pinball machines in barber shops.

 By the time he was 17 as a young adult, Buffett knew where his passions lay and after finishing college he went on to study under Benjamin Graham the father of value investing himself at Columbia University. Value investing refers to the practice of using fundamental research to identify top stocks. And Buffett had read a book by Graham and David Dodd another prominent investor at Columbia. After failing to get into Harvard, Buffett wrote a letter to Dodd asking that he be admitted to study under the two famous investors. To which dodd obliged allowing Buffett to learn about stock analysis from some of the brightest minds in the field. In fact, Buffett went on to work for and develop a close professional relationship with Graham. And it was from this mentor that Buffett actually picked up his famous two rules of investing. Rule number one: Never lose money and Rule number two: Never forget rule number one.

Outside of investments, Buffett dedicated time after graduating to take a Dale Carnegie public speaking course. Well probably not viewed with the same esteem as his degree, it's here where Buffett mastered his communication skills and became a captivating speaker. In fact, Buffett himself attributes much of his success, to this course and if you visit his office in Omaha you'll see that, it's the Dale Carnegie certificate not his Columbia master's degree hung proudly on his wall. 

Now equipped with the education to launch his career, Buffett took some time to work for his father's and Graham's companies before starting his own partnerships. And with his entrepreneurial capabilities and success growing money he quickly started accumulating wealth, becoming a millionaire by the time he was 32. But up until this point Buffett had made most of his money, employing a cigar butt investment approach. Whereby he purchased troubled companies at a deep discount, with the hope of getting one last puff out of them. Well, this was certainly working for him. Buffett's business partner and friend Charlie Munger would eventually move him away from this technique, convincing him to shift from buying fair companies at a great price to great companies at a fair price. But not before Buffett carried out what he now calls one of his worst investments of his career: A failing textile business in America known as Berkshire Hathaway. 

You see before becoming the holding company we know today, Berkshire was a struggling firm in a dying industry. And while Buffett had purchased shares hoping for a rebound, he eventually realized that the industry in North America was going extinct. As fate would have it, Buffett had a dispute with management over a 12.5 cent difference between what he said he'd sell his shares for and what management was offering him. So in a moment of spite, he bought the company and took over as CEO. He eventually shifted the business to insurance. And using the money the company had put aside for insurance claims, Buffett began acquiring businesses and growing the holding. Investing in a wide range of operations including a chocolate company in California, a mattress Mart in Nebraska and other more well-known names like coca-cola, American Express and The Washington Post.

 Warren's approach involved finding quality companies with a competitive product or service run by a competent management. And his method proved more than successful.l Berkshire Hathaway went on to become one of the largest companies in the world making Warren Buffett the wealthiest man alive in 2008. And his success brought Buffett a cult-like following, annual meetings for Berkshire shareholders turned from a boring formality to what people today described as a Woodstock for investors with people literally travelling from around the world to attend. Buffett's annual letter to shareholders and another formality of public firms accumulated a hoard of readers and to this day are read by millions of investors who don't even own Berkshire shares.

 Warren Buffett effectively became one of the most influential investors nay, people, of the modern era. But while Buffett's investment performance certainly played a big role in this fame, the truth is that it's not just the size of Buffett's wallet that's led so many people to follow his every move. One thing investors love about Buffett is that he's continually sharing his wisdom in his letters and public addresses. Buffett frequently provides guidance. Encouraging investors to focus on their circle of competence and teaching investment principles, using analogies and metaphors that he's now famous for. In the past, he's explained the idea of investing in companies with moats: something that protects operations from other businesses.

 And he frequently uses baseball, one of his favourite pastimes to explain the virtue of patience. Arguing that's better to wait for the right pitch even if the crowd is shouting, swinging your bum. Now to be sure Buffett doesn't have a perfect track record. But I think this makes Buffett even more human to his audience. Whereas most billionaires feel untouchable there's a lot of  Buffett that makes him relatable. To this day he lives in the same house he bought back in 1958 in his hometown of Omaha. A modest city, well separated from the high life enjoyed by other billionaires. As CEO of Berkshire Buffett only takes a salary of $100,000 a year. A lot to be sure, but pennies compared to the average CEO and despite his tremendous wealth, Buffett lives frugally driving himself around and eating McDonald's every day for breakfast to keep his meal cost below $4.

 There are also a lot of quirks about Buffett that many people find endearing. He can play the ukulele and has serenaded his investors in the past. He plays bridge with Bill Gates, he absolutely loves coca-cola and it was just this year in 2020 that he finally upgraded from a flip phone. But past the superficial points, Buffett has demonstrated admirable values and a desire to do good with his wealth. An impression left in him by his late wife Susan Buffett. Susan was an involved human rights activists and heavily influenced Buffett's political and ethical views. As a result, he's long advocated for investors rights, speaking out against the MAL practices of Wall Street. And often couraging investors to use index funds to avoid the high fees of the industry.

 Taking his point further by betting that hedge funds could not beat the S&P 500 over a 10-year period. I bet he won. In 2017 he's also spoken out against gender inequality and even argued for the wealthy to pay higher taxes. In fact, wealth distribution has been a big focus of Buffett's over the last few decades. And using his status he started a number of great initiatives every year. for example,

 Buffett holds a luncheon auction where wealthy individuals and business leaders paid millions just to meet and dine with Buffett himself, with all proceeds going to charity. But his most notable of philanthropy Esther is easily The Giving Pledge in 2006. After the passing of his first wife and not understanding why a single man should have the amount of wealth that he had accumulated, Buffett promised to give away 99% of his assets which today stands at an estimated 75.5 billion dollars. With funds going primarily to the Bill and Melinda Gates Foundation. A charity with a number of different focuses. After becoming the wealthiest man in the world Buffett gave it all away and passed his own contribution. 

Buffett encouraged other wealthy Americans to follow his lead and pledged 50% of their own wealth to charitable causes. Over 300 people including Bill Gates, Mark Zuckerberg and Elon Musk have taken this movement earned Buffett the Presidential Medal of Freedom in 2011 and the lasting respect of many people around the world. 

So that's who Warren Buffett is. One of the wealthiest men alive, a builder of a Fortune 500 company, that today is worth roughly half a trillion dollars and philanthropist. It's easy to see why so many people around the world adore him and why investors hang on to every word he says. Of course, there are those who criticize Buffett, particularly around his promotion of monopolies as good investments. And he's by no means a perfect person that people should worship. albeit, some do. But no one can deny his impressive achievements and the impact he's had on the world. So next time you hear about Buffett, hopefully, you'll have a better understanding of why he's not just seen as another billionaire. but perhaps, the greatest of all time.

 With a lifetime of investing experience,  from the people who helped Buffett get to where he is today to his investment successes and failures.  If you want to hear a few more stories about the Oracle's investment success, I encourage you to listen to Buffett by Roger Lowenstein on Blinkist. 

They have a great app that summarizes the key insights of thousands of books, letting you read or listen to their top ideas in short clips. The Buffett book is a quick one that highlights a few of Buffett's investment stories and other key moments in his life. You'll also find the intelligent investor on there which is a book by Benjamin Graham, that Buffett himself has called by far the best book on investing ever written. And hey if you'd like to go past the link of summary, the intelligent investor id available through Blinkist's new audiobook feature. members pay a reduced price. But even if you aren't an investment enthusiast there are a bunch of other topics you'll find on the platform including science, history even philosophy. So while not everyone can read as much as  the Oracle himself. I just read and read and read. I probably read 5 to 6 hours a day there's thankfully Blinkist.

Thank you so much for reading and lf you have any feedback or want to suggest what I should cover in future, let me know in the comments below.