The Warren Buffett Business and Investment Documentary - (A post for every Investor)
If you are an investor or a prospective investor in the stock market and business, then Warren Buffett should not need an introduction to you. Unlike Bill Gates, Jeff Bezos and Mark who made money by innovation or like Jim and Alice Walton who inherited money, Warren Buffet made his wealth from winning in the stock market for over half a century.
Born in Omaha in the year 1930 when the great depression was telling on everyone, into the family of a stock broker Howard Buffett. Buffett started investing in shares from before graduating from high school which you might say is expected of a stock broker’s son but this time, his father was into politics and a congress man. He bought 3 stocks of Cities Service Company. He bought Coca-Cola in packs at wholesale prices and sell them to his fellow students at a retail price. He delivered the Washington post around the neighborhood in 1944, this was his first job. For a 14 year old boy, delivering papers wasn’t enough. He took the money he made from selling papers to buy pinball machines which he placed in different areas of the neighborhood to increase his wealth generation. In 1948, his father lost his rerun election and Warren had to sell his pinball machines for a sum of $1200. The young entrepreneur used the money to buy 40 acres of land in Nebraska which he rented out to people and he used the rent pay to support himself through the University where he studied business administration after which he furthered at the Columbian business school.
Meeting with Benjamin Graham was the game changer in the life of Warren Buffett. Graham taught Buffet how to invest by buying companies that were decent at a price that were not cool as well as buying stocks that are supposed to be on the high at a low price. In 1954, Warren Buffett went to work for Graham in his investing company Graham-Newman Corporation where he understood how to value a company by looking through its numbers. With Graham retiring Buffett had to use the cash he had with him to invest. He had $175,000 valued at $1,600,000 in today’s market. He started looking for companies that were not actually doing great but still had better numbers compared to what the market had which means they were undervalued. From 1958, Buffett started investing in companies like the Sanborn Map Company, Western Insurance security, Common wealth trust company and Dempster mill.
At 32 years, Warren was already a millionaire. In the same year he bought a textile company which was facing issues and had to close down 9 out of 11 mills and lay off 8700 workers. Its stocks were trading at $7 while its asset was worth around $11. The company’s CEO at that time Seabury Stanton was buying back its stock with the company’s funds. Warren bought the company’s stocks and got the highest shares in the company. Warren started using the company to buy other companies which he used to buy a major stock at American Express and started buying insurance companies like National Indemnity Company, Central state indemnity, Gieco, Gen Re, Medical protective. He did this because insurance companies had excess money in cash as people wanted to get insured but will only be able to withdraw their money whenever there is an accident. This made Berkshire Hathaway portfolio increase drastically.
