Warren Buffett

Warren Buffett (born 1930) is America's most brilliant investor, compiling a year-after-year record of phenomenal returns for the shareholders of his holding company, Berkshire Hathaway, Inc.

For example, if someone had given him $10,000 to invest in 1956 he or she would be worth over $60 million by 1994. Buffett is one of the richest men in America, and he is a success story in the classic mold. As of 1995 Buffett, with a personal fortune of some $12 billion in Berkshire stock, was the second-wealthiest individual in America, right after his friend, Microsoft chairman Bill Gates.

Throughout it all Buffett has retained a seeming simplicity that goes along with his down-home, Midwestern roots. His associates, however, say his hayseed manner disguises a brilliant sophisticate. He shuns New York and Los Angeles, preferring to run his far-flung empire from modest offices in Omaha, Nebraska. The periodic insights into his success that he dispenses are usually witty and simple. However, each time Buffett—known in the financial world as the "Oracle of Omaha"—speaks, just about everyone, from the most accomplished professional prognosticator to the stock-playing hobbyist, pays attention.

Born in 1930 in Omaha, Nebraska, Buffett always "wanted to be very, very rich," as a Time article put it. The boy received an early, close-up look at the stock market: his father Howard was a broker, and young Warren, just nine years old, often visited the shop and charted stock performances. He chalked in stock prices on the big blackboard at his father's office, and at age 13 ran paper routes and published his own horse-racing tip sheet.

In 1942 Buffett's father was elected to the U.S. House of Representatives and the family moved to Fredricksburg, Virginia. Young Warren Buffett expanded his business interests by placing pinball machines in Washington, D.C. barbershops. At age 16, a prodigy in statistics and mathematics, he enrolled at the University of Pennsylvania. He stayed two years, moved to the University of Nebraska to finish up his degree, and emerged from college at age 20 with $9,800 in cash from his childhood businesses. Harvard Business School rejected him, but Columbia University's Graduate School of Business accepted his application.

Finds Niche

Columbia was a key turning point in Buffett's life, for it was there that he met Benjamin Graham, co-author with David Dodd of the landmark textbook Security Analysis. "I don't want to sound like a religious fanatic or anything, but it really did get me," Buffett was quoted as saying in the New York Times Magazine about Graham's writings.

Graham's philosophy has permeated most of Buffett's decision in the 40-plus years since they first met. Essentially, Graham's theory, called value investing, urges stock pickers to buy shares that are much cheaper than a company's net worth would indicate. That is, look for stocks that sell below their "intrinsic value," a measurement Graham calculated by subtracting a company's liabilities from its assets. Eventually, Graham theorized, the stock market will catch on to the true value of a company and its share price will rise; by that time, a savvy investor following Graham's principles already will be locked into the stock at a low price. It's a simple enough theory, but one that requires much research into companies to determine their net worth, their "book value," and other factors. It is research for which Buffett is eminently suited.

After graduate school, at his father's brokerage firm, Buffett would often travel to Lincoln, Nebraska and pore through company reports. As he told Forbes magazine, "I read from page to page. I didn't read brokers' reports or anything. I just looked at raw data. And I would get all excited about these things." Today, he conducts his business the same way. Buffett does not have a stock ticker in his office, nor a computer or calculator. According to numerous published reports, he spends about five to six hours each day reading annual reports and trade publications. Fortune magazine reported that in Omaha, Buffett "does what he pleases, leading an unhurried, unhassled, largely unscheduled life….He spends hours at a stretch in his office, reading, talking on the phone, and, in the December to March period, agonizing over his annual report, whose fame is one of the profound satisfactions in his life."

Buffett left Omaha and joined Graham's investment firm on Wall Street in 1954. There he was able to view his mentor's work first-hand. Over the next two years, Buffett got married, fathered two children, and made $140,000 by the time he was 25. Graham shut down his investment firm in 1956 and Buffett gladly left New York. When he returned to Omaha family members asked him for advice, so Buffett set up an investment partnership. As he told the New York Times Magazine, he said to his investors, "I'll run it like I run my own money, and I'll take part of the losses and part of the profits. And I won't tell you what I'm doing."

While he might have kept investors in the dark about his methods, Buffet's bottom-line returns were crystal clear: over the next 13 years Buffett Partnership Ltd. generated a 29.5 percent compounded annual return. He raised $105,000 from investors to start the partnership, and when he closed it 13 years later, the partnership was worth $105 million, and Buffett worth $25 million.

One of the investments along the way was Berkshire Hathaway, a textile manufacturer in Massachusetts. Buffett would create his multibillion-dollar empire around that business, although the textile company itself remains—in Buffett's opinion—one of the biggest investment mistakes he made. Sure, Berkshire Hathaway's stock price was cheap, satisfying a requirement of the Graham strategy. But the textile industry as a whole, and the company itself, was weak. In one of his much-anticipated annual reports, quoted in Fortune magazine, Buffett summed up part of his philosophy in the wake of that mistaken textile purchase: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." (He would shut down the textile mill in the mid-1980s.)

Buffett ended the lucrative partnership in 1969. As the New York Times Magazine reported, "The partnership's capital had grown so large that small investments were no longer reasonable, and he could find no big investments to his liking. In addition, the market was too speculative for his taste." He then focused on Berkshire Hathaway, buying up companies under its umbrella, investing "where and when he pleased," according to the Times.

Buffett's holdings, and his strategies, from the late 1960s on are clear. He first bought a series of insurance companies, which are considered excellent sources of cash. (People regularly pay insurance premiums; insurance companies usually pay claims on those insurance policies—if they have to pay them at all—years down the line. Therefore, there is usually a great amount of cash on hand for the company owners.) Buffett used that cash to buy a series of businesses, which have remained at the core of his investments.

His so-called "Sainted Seven Plus One" are sizeable, profitable companies that, according to the Wall Street Journal, "provide a steady stream of profits and capital to fund the investments that bring him renown." Among the eight core businesses are: the Buffalo News, World Books, Kirby vacuum cleaners, Fechheimer Brothers uniform company, and See's Candies. According to Money magazine, those businesses alone generated $173 million in cash in 1990, and the New York Times estimated in 1991 that their combined worth was approximately $1.6 billion. The cash generated by the eight companies is, in turn, invested in other corporations, which comprise the other core chunk of Berkshire Hathaway's holdings.

All of the companies in which Buffett invested are businesses he understands, underlining one of Buffett's main rules: "Stick to what you know." Forbes once quoted him as explaining why he had not invested in the immensely profitable computer company, Microsoft: "Bill Gates is a good friend, and I think he may be the smartest guy I ever met. But I don't know what those little things do."

Instead Buffett bought into what the New York Times Magazine called his "permanent holdings": The Washington Post, Geico (an insurance company), Capital Cities/ ABC, and Coca Cola. He bought $45 million of Geico stock, which by 1989, according to the New York Times, was worth $1.4 billion. His $10.6 million investment in the Washington Post group of publications ballooned to an investment worth $486 million 16 years later. When he purchased seven percent of Coca Cola for $1 billion in 1988, some said he had bought too high, too late. But Buffett predicted Coke's expansion into foreign markets and thought the company could grow. It did, more than doubling his investment.

Investments in the big, brand-name companies is an example of how Buffett's buying strategy has evolved from the teachings of his mentor, Graham. Buffett became interested in what he called "franchise" businesses, or companies that are well-managed, with an established product line, and which are not subject to low-cost competition. His strategy changed because the market changed. The companies that Graham liked—companies trading far below their actual value—are rarer.

White Knight

Also in the 1980s, Buffett engaged in a series of transactions that are available only to someone with enormous wealth. He stepped in as a so-called "white knight" to help companies fend off hostile takeovers by other corporations. Buffett's strategy works like this: a company, such as Gillette, faces a takeover and needs an infusion of cash. Buffett invests in the company's "preferred stock." According to the Wall Street Journal, the preferred stock options are "not available to other investors. Typically [Buffett] gets preferred stock bearing a healthy dividend—assuring a modest return no matter what happens—and the ability to convert to common stock if the company's fortunes rise." In the case of Gillette, Buffett invested $600 million in 1989, and in converting the stock two years later, received 11 percent of the company, which was worth, at the time, $1.05 billion.

In 1991 Buffett stepped in as interim chairman of Solomon Brothers brokerage firm after that it was accused of making false bids at Treasury auctions. Buffett, who had invested $700 million of Berkshire Hathaway cash in Solomon Brothers, was its largest shareholder. He is credited with streamlining the company and, over his six-month tenure as interim chairman, helping to rebuild its reputation after the scandal.

But the shareholders are not complaining. Berkshire Hathaway stock was trading for $12 a share in 1965. As of December, 1994, a single share of the investment company was the most expensive traded on the New York Stock Exchange: it cost $19,900 a share. Buffett owns over 40 percent of Berkshire Hathaway, which accounts for his $8.3 billion net worth. (Incidentally, Buffett does his own taxes.) And in August 1995, Buffett brokered a spectacular deal when his Berkshire Hathaway arranged the $19 billion purchase of Cap Cities/ABC by the Walt Disney Company. While the brokerage already had a $345 million in investments, this one merger raised the value to $2.3 billion.

Those not fortunate enough to own Berkshire Hathaway often mimic Buffett's buys. Fortune reported that when the general public learns Buffett has bought a particular stock, the public also buys the stock, running up the price. That led the magazine to quip: "Now there are two ways to make a killing in the stock market. The first, goes the old saw, is to shoot your broker. The second, it seems, is to shadow Warren Buffett."

The strategy doesn't always work, as a 1995 Money article warned. "Awe-inspiring though Buffett's record is, he's had a few clunkers. The $322 million investment he made last spring in Salomon common stock is down roughly 26%, and an albeit tiny (for him) $38.7 million stake in [an aircraft leasing company] has plummeted 68% since 1990." Prior to that, Buffett had bought Disney low and sold it later for a small profit; but that company rose spectacularly after Buffett's sale. He bought a $358-million chunk of USAir only to see the investment sour. (He was later quoted in Fortune as telling a group of business students at Columbia, "Don't invest in airlines.") In his 1989 annual report, quoted in Fortune, Buffett candidly wrote, "It's no sin to miss a great opportunity outside one's area of competence. But I have passed on a couple of really big purchases that were served up to me on a platter and that I was fully capable of understanding. For Berkshire's shareholders, myself included, the cost of this thumb-sucking has been huge."

Aside from his business acumen and opinions, many people are interested in Buffett himself, asking: What's a billionaire like? He does not give frequent interviews, preferring to let his corporate report speak for him. He lives in the same Omaha home he bought in 1958 for $31,500. He lives in that home with his girlfriend and former housekeeper, Astrid Menks, 17 years his junior. His wife of 40-plus years lives in California and is friends with his girlfriend. (Mrs. Buffett is the second largest shareholder of Berkshire Hathaway and is slated to take over the company after Buffett's death.)

One of his few extravagances is his corporate jet, and playing bridge by computer with friends from around the country. According to the Wall Street Journal, he wears rumpled suits, although very expensive Italian ones, and drinks about five cherry Cokes a day. He says he is an agnostic. As Roger Lowenstein related in his unauthorized biography Buffett: The Making of an American Capitalist, the investor once promised his young daughter a $10,000 check if he didn't lose a certain number of pounds by a certain date. He lost the weight, and kept the cash.

"He is a standard bearer for long-term investing, the perfect antidote to the get-rich-quick schemers of Wall Street," the Wall Street Journal said of Buffett. Forbes opined that "He has not the psychological need for the constant wheeling and dealing, buying and selling that afflicts so many successful business and financial people." His philosophy—as well as his enormous wealth—allows him to be pickier and choosier. As he stated in his 1989 annual report, "We do not wish to join with managers who lack admirable qualities, no matter how attractive the prospects of their business. We've never succeeded in making a good deal with a bad person."

Which leads to the obvious question he is often asked: How do you succeed in the stock market? Throughout the years Buffett has offered bits of advice, such as: 1) If you buy into a great business, stick with it no matter how high the stock price goes; 2) avoid staggering debt; 3) think long term and don't hop in and out of the market; 4) in a bidding war between companies, buy stock in the side you think will lose; 5) easy does it (meaning, avoid businesses with big problems), and 6) concentrate on a small number of stocks.

Buffett has already made preparations for his money when he dies. He intends to set up a philanthropic foundation which, given the 23 percent annual rate of return he has averaged throughout his career, could generate a multibillion-dollar legacy to put the Ford and Rockefeller foundations to shame. He wants the fund's trustees to focus on halting population growth and nuclear proliferation. His three children will not make out that well; Buffett has said he plans to leave them "only" about $5 million apiece. He was quoted in Esquire as saying, "I think kids should have enough money to be able to do what they want to do, to learn what they want to do, but not enough money to do nothing."

Further Reading

Lowenstein, Roger, Buffett: The Making of an American Capitalist (unauthorized biography), Random House, 1995.

Business Week, May 10, 1993, p. 30; July 18, 1994, p. 46.

Economist, May 23, 1992, p. 86.

Esquire, October 1988, p. 103.

Forbes, March 19, 1990, p. 92; October 18, 1993, p. 40, p. 112.

Fortune, April 11, 1988, p. 26; April 9, 1990, p. 95; January 11, 1993, p. 101; November 29, 1993, p. 10; April 18, 1994, p. 14; July 25, 1994, p. 17.

Money, November 1990, p. 72; August 1991, p. 70; April 1995, p. 106.

New York Times, March 26, 1992, p. D1.

New York Times Magazine, April 1, 1990, part 2, p. 16.

Time, August 21, 1995.

U.S. News & World Report, June 20, 1994, p. 58.

Wall Street Journal, November 8, 1991, p. A1. □

BUFFETT, WARREN

An extremely high-profile investor with rare job qualifications in the late 1990s—expansive patience and discomfort with technology, despite his close friendship with Microsoft mogul Bill Gates—Warren Buffett's investment success in the final decades of the 20th century knew no peer or rival. Worth about $30 billion, Buffett is one of the world's richest men, second in the United States only to Gates, and one of the very few of his class to attain such fortune solely on the strength of stock investments. The chairman of Omaha, Nebraska-based Berkshire Hathaway, Buffett has been known to refer to his annual stockholders' meeting as a "Woodstock weekend for capitalists." Accordingly, the event draws investors from around the world who flock to hear his sermon. Buffett's awe-inspiring success and cult-like status spawned a potpourri of investment-related Web sites, magazine stories, and books, many offering advice on how to "invest like Warren Buffett." The fawning, sometimes almost worshipful attitude of some of Buffett's followers earned him the affectionate nickname, the "Sage of Omaha."

A standard story within the investment world perhaps best illustrates the reasoning behind the Buffett legend: if one invested just $10,000 into Berkshire Hathaway in 1965, when Buffett first assumed control, by the end of the century one would have turned that initial investment into $50 million. By way of comparison, if the same investor had sunk that $10,000 into the Standard & Poor's 500 stock index in 1965, by the end of 1999 it would have been worth less than $500,000. Thus it's easy to see why so much of the investment world strains to hear every word and scrutinize every move of Warren Buffett.

Equally famous as his astronomical investment success was his notorious sourness toward the new economy and dot-com mania. Buffett and his legions of followers are well known for eschewing the trendy and faddish in stock investment. Buffett in large part built his reputation by attracting like-minded investors, who were in it for the long term rather than for quick speculative profits. His method ignores macroeconomic trends and Wall-Street tips and wisdom, focusing instead on companies that boast significant market share and growth potential, but with low earnings and depressed valuation. In short, he looks for solid, strong companies that will put together sound earnings over the long term. The naysayers who view this strategy as quaint, or as a fossil of a bygone age in an era of tip-and rumor-based day trading, more often than not end up coming to see his moves as conventional market wisdom.

While his favored established firms' stocks tumbled in the late 1990s, the dot-com mania swept the markets, producing a surge of new investment hot-shots and poking holes in the aura of mystique that surrounded the Buffett legend. By 2000, however, dot-coms were in trouble, and once gain Buffett came out ahead of the pack. The question of whether or when the Internet players will build themselves into the kind of companies that Buffett, or the thousands upon thousands of would-be Buffetts, would choose as their investment vehicles remains to be seen.

THE SAGE'S STORY

Born in Omaha in 1933, Warren Edward Buffett showed a very early affinity for remembering and calculating numbers. According to a profile in the online magazine Salon, the young Buffett was marking the board at his father's brokerage and purchasing his first stock at age 11. Within three years, Buffett used his paper route savings to dive into real estate, purchasing 40 acres of farmland and leasing it to a tenant farmer.

He came across the highly regarded investment tome The Intelligent Investor, by Benjamin Graham, as a senior at the University of Nebraska, and was strongly influenced by the investment principles therein. Graham was a famous skeptic of Wall Street trends, encouraging so-called value investors to seek out "cigar butts"—those firms that Wall Street had all but abandoned but which could still be lit up for a few good puffs of stock activity. Buffett's first investment success came in 1951, when he threw $10,282 into the auto insurance firm Geico. Just a year later, he pulled out for $15,259. In 1952, the 21-year-old Buffett began offering his own classes on investing, selling his course via an advertisement in a local Omaha newspaper.

After a few years working and studying with Graham, Buffett began to feel constrained by the former's strict rules of value investment. Instead of picking up nearly lifeless companies cheaply, Buffett began to experiment with buying stocks of still vigorous but undervalued companies. In 1956 Buffett began an investment partnership on the seed money provided by himself, his sister, his neighbor, and his lawyer. The following year, a local couple who had attended his class invested $100,000 into the partnership. Buffett's earliest believers, known as the Berkshire Bunch, amassed enormous fortunes over the years by putting money behind the young investment guru's ideas. In Omaha alone, according to Forbes, more than 30 families accumulated at least $100 million in Berkshire Hathaway stock.

In 1962, Buffett began purchasing shares of Berkshire Hathaway, a struggling textile manufacturer in New Bedford, Massachusetts. Three years later he controlled the entire company. Berkshire's book value per share registered nearly 25 percent compound annual gains through the rest of the century, according to Credit Suisse First Boston Corp. By the end of the 1960s, finding good bargains few and far between, Buffett dissolved the investment partnership, returning his investors' money. From this point, he concentrated on Berkshire, which at first functioned primarily as a textile company with a small investment operation. Before long, however, investments were Berkshire's bread and butter and Buffett returned to his practice of picking up depressed companies. There were many such firms by the early and mid-1970s, after the 1960s stock rally gave out and inflation set in, making cheap stocks plentiful.

Buffett's bold moves and foresight helped him weather the tough economic climate of the late 1970s, and despite the tremendous market crash in 1987, Berkshire finished that year in much better shape than the year before. His head-scratching investments in companies such as Coca-Cola proved ingenious, with their brand-name recognition and untapped international potential. By 1993, Berkshire's $8.3 billion placed it at the very top of the Forbes 100 list.

Once viewed basically as an investment fund, acquisitions of insurance firms, such as Geico and General Reinsurance, through the 1990s transformed Berkshire Hathaway primarily into an insurance company in which the investment portfolio happened to be managed by one of the world's most famous investors. By the end of the 1990s, insurance accounted for more than 70 percent of Berkshire's revenues. Buffett came to believe that his company's greatest strength lay in purchasing companies outright rather than simply picking established stocks at the right stages of their valuations.

Buffett's attraction to the insurance industry was fairly logical. Since policyholders pay their premiums up front, while the firms pay out claims later, the company can be used as a strong investment catalyst. With a constant stream of revenue coming in, the insurers have a gap of time in which they have a good deal of money to invest before the claims are actually paid. This was Berkshire's strength, using the premium money to invest in Buffett's favored brands of under-valued stock.

His methods of investing and strategizing were extremely out of fashion and against the grain in the dot-com explosion of the late 1990s. The year 1999 saw Buffett's first down year in a decade, with Berkshire's per-share book value under-performing the S&P 500 index for the first time in 20 years. At the time, the judgmental pronounced his insistence on investing in firmly established, proven businesses out of date for the much-heralded, dot-com-heavy new economy. In 2000, however, Buffett appeared to have the last laugh, as reality weighed down the dot-com mania and the high-tech stock bubble burst. Buffett's portfolio, meanwhile, bounced back as investors ran to established companies, and once again pundits and analysts were praising the far-sighted wisdom of Buffett.

Buffett is a committed stickler for rigorous balance-sheet scrutiny, teasing out the elements that will produce long-term profitability. While he eyes technology stocks with a degree of skepticism, Internet stocks, at least as of the early 2000s, were almost completely off the menu for Buffett. Given his commitment to balance sheets and sound predictability, it's not difficult to ascertain why. Buffett refuses to throw money into a company unless he actually can visualize the company's numbers a decade or so down the road. With regards to the Internet, Buffett admits his vision is extremely cloudy at best.

FURTHER READING:

Atlas, Riva. "Warren Buffetted." Institutional Investor. January, 2000.

Bary, Andrew. "What's Wrong, Warren?" Barron's. December 27, 1999.

"For the Buffett Faithful, Time Paid Off." Forbes. October 12, 1998.

Kadleck, Daniel. "Berkshire's Buffett-ing." Time. October 25, 1999.

Kanter, Larry. "Salon Brilliant Careers: Warren Buffett." Salon.com . August 31, 1999. Available from www.salon.com people.

Kover, Amy. "Warren Buffett: Revivalist." Fortune. May 29, 2000.

Lenzer, Robert. "The Berkshire Bunch." Forbes. October 12, 1998.

SEE ALSO: Gates, William (Bill); Volatility

Warren Buffett
1930-

Chairman and ceo of berkshire hathaway inc.

The Oracle of Omaha

Without a doubt Warren Edward Buffett is the greatest stock investor in modern times, and perhaps the most prescient oracle in the history of the stock market. If an individual had invested $10,000 in Berk-shire Hathaway when Buffett purchased a controlling interest in 1965, by 1999 that individual's portfolio would have been worth $51 million. Had that same individual invested $10,000 in the Standard & Poor's 500-stock index, their portfolio would have been worth a mere $497,431. Yet, Buffett has not added a major position to the stock portfolio of Berkshire Hathaway since amassing 4.3 percent of McDonald's Corporation in 1995. During the second half of the 1990s he transformed what had previously been a sideline at Berkshire Hathaway into a main focus: the acquisition of entire companies. Between 1996 and 1999 Berkshire Hathaway, located in Omaha, Nebraska, spent $27.3 billion to purchase seven companies in industries as diverse as aviation, fast food, and home furnishings. The effect was immediate and dramatic. The shift in emphasis transformed Berkshire Hathaway from a closed-end fund to a bona fide operating company. In 1996 the stock portfolio of Berkshire Hathaway accounted for 76 percent of the company's $29.9 billion in assets; only three years later the assets in stocks plummeted to 32 percent while total assets quadrupled to $124 billion.

A Misunderstood Giant

The conventional wisdom is that Berkshire Hathaway stock will bring a premium because of Buffett's reputation as a latter-day King Midas. Certainly there is something to be said for Buffett's reputation. Yet, according to Alice Schroeder, a PaineWebber Insurance analyst who published a comprehensive study of Berkshire Hathaway, it is "possibly the most talked about and the least understood company in the world." Schroeder asserts, for instance, that despite the so-called Buffett premium, Berkshire stock is actually undervalued, trading far below its real value, which she has estimated to be between $91,000 and $97,000 per A share. In 1999 the A shares of Berkshire Hathaway stock traded at about $70,000. Schroeder explains the devaluation of Berkshire Hathaway stock by pointing out that the stock market misperceives the company as little more than the sum of the stocks in its portfolio and so tends to overreact to news about the seven stocks that form the core of Berkshire Hathaway's holdings: Coca-Cola, Gillette, American Express, Freddie Mac, Wells Fargo, Walt Disney, and the Washington Post Company. Despite changes that the company has undergone, Buffet remains true to his conservative precepts of investing. He prefers, as he puts it, a sure thing today to the next big thing, no matter how spectacular its potential might be. He will not, for example, invest in Internet stocks because no one can predict their performance over the next ten years. "I can't do it myself," he says, "and if I don't know, I don't invest."

When I Paint My Masterpiece

Buffett is all business almost all of the time. His tastes are simple, his habits frugal. Unlike the new generation of corporate leaders, such as Bill Gates or Jeff Bezos, Buffett neither spends money nor gives it away. He just makes it. He is an entrepreneur, not a philanthropist. Furthermore, in an era when most CEOs at least pay lip service to shareholder rights, Buffett is a throwback to an age when a corporate mogul was a corporate mogul and did as he pleased with his company. "Berkshire is the company I wanted to create," Buffett has said. "It's not the company that Alfred P. Sloan wanted to create. It fits me. I run it with our investors and managers in mind, but it is designed to fit me.… The problem I've got with doing anything else except what I'm doing," he admits, "is that there is nothing remotely as fun as running Berkshire.… Berkshire is my painting, so it should look the way I want it to when it's done."

Sources:

Anthony Bianco, "The Warren Buffett You Don't Know," Business Week (5 July 1999): 55-66.

Robert G. Hagstrom & Peter Lynch, The Warren Buffett Way: Investment Strategies of the World's Greatest Investor (New York: John Wiley & Sons, 1997).

Roger Lowenstein, Buffett: The Making of An American Capitalist (New York: Doubleday, 1996).

Allan Sloan, "Buffett Takes it All With Him," Newsweek, 134 (27 November 1999): 53.

Theodore Spencer, "The Investors of the Century," Fortune, 140 (20 December 1999): 154-158.

Warren Edward Buffett , 1930–, American financial executive, b. Omaha, Nebr., studied at Wharton School of Finance (1947–49), grad. Univ. of Nebraska (B.S., 1950), Columbia (M.S., 1951). After working as an investment salesman and securities analyst, he was partner (1956–69) in the investment firm Buffett Partnership, Ltd. In 1965, he acquired the textile manufacturer Berkshire Hathaway and became (1970) chairman and CEO. Through judicious investments and acquisitions of insurance, manufacturing, service, and other firms, Buffett has transformed Berkshire Hathaway into a large conglomerate, and his investments have made him one of the wealthiest people in the world. In 2006 he announced that he would donate the vast majority of his wealth to charity, with some $31 billion, the largest gift, ultimately going to the Bill and Melinda Gates Foundation . He has coauthored Warren Buffett Speaks (with J. C. Lowe, 1997) and Thoughts of Chairman Buffett (with S. Reynolds, 1998). His father, Howard Homan Buffett, 1903–64, an investment banker, was a U.S. congressman from Nebraska (1943–49, 1951–53).

Bibliography: See biographies by R. Lowenstein (1995) and A. Schroeder (2008); studies by A. Kirkpatrick (1992), R. G. Hagstrom (1995), and M. Buffett and D. Clark (1997).