Known as the "Oracle of Omaha," Warren Buffett is an
investment guru and one of the richest and most respected
businessmen in the world. (biography.com)
Warren Edward Buffett (born August 30, 1930) is an
American business magnate, investor and philanthropist.
Buffett is the chairman, CEO and largest shareholder of
Berkshire Hathaway, and consistently ranked among the
world's wealthiest people. He was ranked as the world's
wealthiest person in 2008 and as the third wealthiest in
2011. In 2012 Time named Buffett one of the world's most
influential people
He is indeed a very complex man who has little concern
for being in the spotlight. Lets take a quick look at each of
his unique above in hopes of gaining greater insight into a
man we should know more about.
Wealth
The 78-year-old Warren Buffett happens to be the richest
man on the planet. He has seen his fortune swell to an
estimated $62 billion, up $10 billion from a year ago. As of
February of 2008, this tidy bundle puts him ahead of his
good friend, bridge partner, and Microsoft co-founder Bill
Gates who was the richest man in the world for 13 straight
years.
Frugality
Buffetts current salary as CEO is a mere $100,000 per
year with no stock options, which is among the lowest
CEO salaries in the U.S. among larger companies. He lives
in the same house in his Omaha, Nebraska, neighborhood
that he bought in 1958 for $31,500today valued around
$700,000. He does not carry a cell phone, does not have a
computer at his desk, and drives his own car. Not one for
dining out at fine restaurants unless absolutely necessary, Warren Buffett is reputed to usually
eat burgers; he drives himself to McDonalds for mealssteaks and Cherry Cokes.
When Buffett plays golf with his friend, Bill Gates, whos on his board, their typical bet is $1.
He chooses to fly coach rather than first class. His children will not inherit a significant
proportion of his wealth. Buffett once commented, I want to give my kids just enough so that
they would feel that they could do anything, but not so much that they would feel like doing
nothing.
Philanthropy
Buffett is a noted philanthropist. He also announced plans to contribute additional Berkshire
stock valued at approximately $6.7 billion to the Susan Thompson Buffett Foundation and to
other foundations headed by his three children.
In June of 2008, e-Bay conducted a five-day online charity auction for a Power Lunch with
Warren Buffett. It was won with high bid of $2,110,100 allowing the winner to dine
with Buffett, at New Yorks Smith & Wollensky Steakhouse, along with up to seven companions
for the private lunch. They were allowed to ask Buffett anything at all, except what hes buying
or selling. Auction proceeds benefit the San Francisco Glide Foundation.
In 2006, he auctioned his 2001 Lincoln Town Car on eBay to raise money for Girls Inc. Also in
2006, Buffett announced a plan to give away his fortune to charity, with 83% of it going to the
Bill & Melinda Gates Foundation. The donation, which will come from his Berkshire Hathway
shares, will amount to about $31 billion, based on current values, making it the largest charitable
donation in history.
Sense of Humor
Often called the Oracle of Omaha, he was listed in 2007 among Time Magazines 100 Most
Influential People in the World. Buffetts speeches are known for mixing business discussions
with humor. Each year, Buffett presides over Berkshire Hathaways annual shareholders
meeting in the Qwest Center in Omaha, Nebraska, an event drawing over 20,000 visitors from
both United States and abroad, giving it the nickname Woodstock of Capitalism. Buffetts
writings are known for containing literary quotes ranging from the Bible to Mae West, as well as
Midwestern advice and numerous jokes.
Berkshire Hathaway
In 1962, investor Warren Buffett began buying stock in Berkshire Hathaway. After some clashes
with the owners, he bought up enough shares to change the management and soon controlled the
company. Buffett initially maintained Berkshires core business of textiles, but by 1967, he was
expanding into the insurance industry and other investments.
Today, Berkshire Hathaway is a holding company headquartered in Omaha, Nebraska, whose
core business is insurance, including property and casualty insurance, reinsurance and specialty
nonstandard insurance. However, it also oversees and manages a large variety of subsidiary
companies which include: International Diary Queen, Benjamin Moore & Co., The Pampered
Chef, H.H. Brown Shoe Group, Helzberg Diamonds, GEICO Auto Insurance, Sees Candies,
Fruit of the Loom, Star Furniture, Nebraska Furniture Mart, Boat U.S., Buffalo NEWS,
NetJets, and the Acme Brick Company to name just a few. It also has a controlling stake in
Anheuser-Busch, Coca-Cola, and Wells Fargo.
Early Years
Buffett, son of a Nebraska politician, was the second of three children, and displayed an amazing
aptitude for both money and business at a very early age. He delivered newspapers and would go
door-to-door selling chewing gum and Coke from his grandfathers grocery store. He
purchased six packs of Coca Cola for a quarter and then sold them for a nickel a bottle. He
bought his first stock at age eleven and filed his first tax return at age 13, claiming a $35
deduction for his bicycle. He bought a 40-acre farm at the age of fourteen, using money he had
saved from his paper route. Acquaintances recount his uncanny ability to calculate columns of
numbers off the top of his heada feat Buffett still amazes business colleagues with today. In
his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine,
which they placed in a barber shop. Within a few months, they owned three machines in different
locations.
Buffett graduated from Columbia Business School. While working as a stockbroker on Wall
Street, he purchased a Sinclair gas station as an investment. During that time, Buffett also took a
Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a
night class at the University of Nebraska, Investment Principles. The average age of the
students he taught was more than twice his own. His investments and partnerships continued to
grow until his destined relationship with Berkshire Hathaway. The rest is history.
Major Weakness
He admits his inability to put up with bureaucracy and inefficiency. Though Berkshire has about
190,000 employees, he runs the $141-billion company with 17 employees at its Omaha
Headquarters. He says, We delegate almost to the point of abdiction.
Leadership Traits
NEW YORK ( TheStreet) -- If we can define a leader as an individual with the ability to
influence others, then there is no other leader in U.S. business such as Warren Buffett. In fact,
Buffett may be the most trusted leader in the corporate world today. The Wall Street Journal
reported that Buffett, along with pal Bill Gates, spoke at Columbia University last week telling
the students that there was no better place to invest than the United States. In term of influencing
and being trusted as a leader these are some of his traits.
Transparency: Just a little while ago, Buffett offered to buy the remaining shares of Burlington
Northern Santa Fe that Berkshire did not already own. When asked why he invests the way he
does, Buffett is usually not shy in explaining his thinking, even if it is contrary to the public
view. At a time when many investors are trying to figure out new technology sectors that are
hard to understand and even harder to predict, Buffett explains his investment in Burlington in a
straightforward way.
Railroads are efficient, they are proven and he believes they will become even more valuable as
factories look for the best transportation deals. That's it. You can agree or not, but that's a pretty
straightforward perspective.
Consistency/stability: Of course not everybody loves Warren Buffett. He is not only known as
the Sage of Omaha, but also as an icon for capitalism. He describes his investment philosophy as
"Never lose money," which is why he also causes such consternation in the finance world when
he makes counterintuitive moves like his most recent ones. In fact, Buffett can almost be defined
by his consistency.
Justin McHenry, in his multi-part "How to Think Like Warren Buffett" blog series points out that
Buffett's letter to shareholders in 1977 describes an investment strategy that could be the same
letter he would send today (if you update the sectors). Buffett doesn't chase after the latest and
greatest but uses a consistent formula for making his decisions.
However apart of his consistency, it is never too late to innovate. Buffetts having fun with his
new partnership-purchase of Heinz. The structure of the deal: Both Berkshire and a Brazilian
private equity firm bought the companys common stock, and then Berkshire, as the financing
partner, bought a preferred stock paying 9% interest with the ability to exchange it for even more
common shares later. Early results of the takeover have been encouraging and Buffett seems
tickled by the creativity of the transaction. With the Heinz purchase, moreover, we created a
partnership template that may be used by Berkshire in future acquisitions of size. Including
Heinz, Berkshire now owns 8 1/2 companies that would be included in the Fortune 500 if they
were standalone entities, we are told. One could envision Berkshire doing a Heinz-like
transaction once a year!
Integrity: Another reason we don't suspect Buffett of lots of ulterior motives is that he has
proven his integrity over the decades. Combined with the transparency and consistency
mentioned above, it boils down to the fact that we trust him. He acts the same way he speaks. He
does what he says he is going to do. And perhaps even more important, he holds others to the
same high standards. This is why he has been so outspoken about the need for greater sacrifice
on the part of CEOs of bailed-out companies like Bank of America and Citigroup.
Some of above traits can actually describe Warrens personality as a leader. His
consistency/stability represent Adjustment while his integrity can be best categorized as
conscientiousness which represent credibility and conformity in organization. Other things,
his willingness and try new thing can be categorized as Openness to Experience.
Resources:
www.biography.com
www.achievemax.com
www.thestreet.com
www.thereformedbroker.com
www.wikipedia.org
