Now Warren Buffett 71 years old. He has achieved a lot in his life: he has become a well-known portfolio manager, was ranked among the top five richest people in America by Forbes Magazine, earned the title of a great investor and achieved a great degree of influence on Wall Street.
Warren Buffett took his first investment steps under the direction of Ben Graham, working for his Wall Street investment fund, Graham Newman. Over the five years of work there, Buffett managed to turn the original 10,000 dollars into 140,000 and learn the philosophy of a “wise investor”. Subsequently, these two events had a huge impact on his life.
The first entailed Graham’s offer to become his successor, and the second allowed him to become the most successful investor who created his capital by investing in stocks. The investment principle of Warren Buffett is the purchase of shares in undervalued companies. At the same time, he uses fundamental analysis in the choice of investment strategies, thus, by buying undervalued stocks, he acquires the successful business that is behind these securities.
A good example of such an investment is the purchase in 1962 of shares in the textile company The Berkshire Hathaway. At that time, the company incurred losses, and no one wanted to buy its shares even at a price two times lower than the value of net assets. For three years, Warren Buffett became the owner of a 49% stake in the company and was elected its director. To date, Buffett has not sold a single share, although their price has risen from the original $ 8 per share (as of 1962) to $ 43,500. It is worth noting that now Warren Buffett owns a 42.7% stake in this company – the rest were lost during the liquidation of the Buffett Partnershop Ltd mutual investment fund, which was opened by Buffett and liquidated by him. The fund was created immediately after completion of work at the Graham Newman Investment Fund and was the first independent project of Warren Buffett. The shares of The Berkshire Hathaway were one of the assets of the fund, and at the time of liquidation, the shareholders were asked to take either shares or money. Thus, the percentage of shares in a textile factory owned by Buffett was reduced to 29%.
As already mentioned, at the moment, Warren Buffett owns 42.7% of The Berkshire Hathaway shares. The Berkshire Hathaway portfolio currently includes American Express, Gillette, McDonald’s, Walt Disney, Wells Fargo Bank, General Ree, Coca-Cola and others. Investor’s favorite saying: “Our favorite time to sell shares is never”