Warren Buffett: A Whale among Whales
A net worth of $87 billion and a reputation as the greatest investor of his generation – combined with a down-to-earth humility, folksy personality, and a taste for McDonald’s and Coca-Cola products – has earned one man the moniker of “The Oracle of Omaha.” That man, of course, is the one and only Warren Buffett.
As a teenager delivering newspapers, Warren Buffett made more money than his teachers; now, as the 88-years-young Chairman and CEO of Berkshire Hathaway, Mr. Buffett’s letters to Berkshire’s shareholders are widely read and treated as gospel. When Warren and his friend and Vice-Chairman Charlie Munger speak at annual shareholders’ meetings to 20,000 people, they are treated more like rock stars than financiers.
Besides turning Omaha-headquartered Berkshire Hathaway from a humble textile manufacturing firm into a multinational conglomerate holding company, Warren Buffett unintentionally created a template for long-term value investing that legions of upstarts follow to this day. It’s no exaggeration to call Warren a whale among whales, as he is revered and followed even by investors who are themselves of substantial means and renown.
Although Warren Buffett is known for not making stock recommendations, he does provide investing insights indirectly through Berkshire Hathaway’s holdings, which include GEICO, Kraft-Heinz, American Express, Wells Fargo, Coca-Cola, Bank of America, and Apple. Famously, Mr. Buffett’s focus is not on technical analysis but on buying “wonderful companies at a fair price,” thus stressing the importance of deep fundamental analysis.
The result of this approach has been a monumentally successful investment over the years: since 1965, Berkshire Hathaway has averaged an annual growth in book value of 19.0% to the company’s shareholders, handily beating the S&P 500’s 9.7% annual book-value growth (assuming full dividend reinvestment) during the same period. It’s a testament to the power of ultra-long-term investing in fundamentally sound companies, which is the cornerstone of Warren Buffett’s investment strategy.
And yet, the world’s third-richest man is strikingly humble. Known for his frugal habits, Warren Buffett still enjoys his daily McDonald’s breakfast (for which he never spends more than $3.17) and insists on using a flip phone. Amazingly, Warren’s home in Nebraska is valued at a mere .001% of his net worth.
Warren Buffett’s humility is matched by his profound generosity, which has been well-documented. In 2006, Mr. Buffett stunned the financial community by announcing that he intended to give away the majority of his fortune to charity instead of his children. In a span of ten years, Warren gave away the unfathomable sum of $27.54 billion to charitable causes.
To make the understatement of the century, Warren Buffett has come a long way since he purchased his first stock shares (Cities Service Preferred, $38 per share) at age 11. In addition to his financial and philanthropic achievements, Mr. Buffett did the impossible: he made value investing cool. Taking Benjamin Graham’s value-investing, fundamentals-focused principles and presenting them in a folksy, relatable way has helped countless retail investors build wealth and achieve their financial objectives over time.
So, hats off to the Oracle. Amid a market full of sharks, Warren Buffett’s longevity, good sense, and generosity have made him the undisputed King of the Whales.