I heart Warren Buffett

I recently watched a one hour documentary on television that talked about the life of Warren Buffett.  I had been meaning to learn more about him, and was glad that the task of learning more about him just fell into my lap without me having to do more work than turning on the television =)

Let’s just say that the more I learn about Warren Buffett, the more I heart him.

He’s the third wealthiest person IN THE WORLD for 2010, just in case you were living under a rock and hadn’t heard of him.

He’s estimated to have $40 billion dollars net worth, which primarily started in investing.  $40 BILLION!!!

Here are some reasons that he’s so cool:


  • He still lives in the same house in Omaha that he’s lived in for 50 years
  • He still drives an old chevy truck even though he’s the third richest man in the world
  • He still eats at the same diner style restaurant regularly (no caviar or fois grois for him!)
  • He seems really down to earth and friendly
  • He joins in on Geico ads and looks really cute and enthusiastic doing so
  • His children aren’t spoiled and he told them he doesn’t plan to give them any inheritance and they 100% agree with that (they seemed really down to earth too, from the documentary)
  • He plans to donate the majority of his assets to charity (AND it’s not even a charity funded in his name e.g. The Warren Buffet foundation)
  • He plays bridge with Bill Gates
  • Bill Gates admires him, kind of like a mentor
  • He bought 40 acres of Nebraska farmland at the age of 14 for $1200 (dude, at the age of 14 I was too busy being self absorbed!)
  • He became at millionaire at the age of 31
  • He doesn’t believe in active trading, he buys and holds, and buys some more
  • His affair with investing started by reading The Intelligent Investor and befriending the author.  It’s sitting on my bedside and I have yet to read it, but very excited to read it.
  • He’s an adorable 80 year old!

There’s another biography on Buffett by Alice Schroeder called The Snowball: Warren Buffett and the Business of Life so I hope to check that out soon.

Do you heart Warren Buffett too?  Any other factoids on him that I should add?

About

Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

25 Responses to I heart Warren Buffett

  1. One of the things I love about Buffett is his dedication. The amount of time and energy he put into researching and seeking out investment opportunities was/is amazing, especially since there was no internet.

    If you are a Buffett fan, The Snowball is a must read.

    • @Money Obedience- Ooh more books to read. Thanks for the heads up. I just found it amazing that Warren Buffett told his children not to expect anything, to pave their own way in life, and I find it even more amazing that his children agree to that philosophy and appreciate him even more for it, instead of most children “expecting” to be given some inheritance.

      @Dan- Yes- totally agree. He spends all day researching, reading financial reports, in his cute little Omaha office! He’s so awesome!! =) I will get my hands on The Snowball once I finish my ‘reading pile’ that is getting ever so tall.

  2. I am with you. I always liked Buffet and his no-nonsense, pragmatic approach to anything in life. I like him even more since his son Peter Buffet wrote the book called, “Life Is What You Make It: Find Your Own Path to Fulfillment”.

  3. Personally, I might have to disagree, I think that buy and hold can be as successful as ever. I think the volatility might make buy and hold even more attractive. More opportunities are created when businesses are unjustly punished in the markets by those same swing traders, uninformed retail investors, and money managers with a quarter-by-quarter time horizon. Volatility is your friend, especially being young and thirfty, where you can hold for Buffett’s favorite period…..forever. :)

    • @Dan- thanks for your input, Dan. I’ll let you know in about… 15-25 years time which strategy worked well for me. I do have a bit of both strategies in my portfolio. In my RRSP and TFSA’s I buy and hold (and add, add, add) but in my non-registered, I am a bit more reactive, especially with equities that don’t hand out dividends. We should do a “control” experiment one day (if I’m still blogging 15-25 years from now lol).

  4. He does seem like a great guy and seems to be the numero uno resource to model when it comes to making money via investing.

    With all of the tools available, I can’t see the buy and hold strategy being as successful as it was when he got started. There is just so much more volitility and drivers of information that I think you have to be more reactive.

    • @Money Beagle- Yeah, me too.. I’m not a big fan of the buy and hold strategy during these times. I think the volatility has much to do with the advent of the internet, and how people can do day trading, swing trading, and investing from home….

  5. Cute post :) I read Snowball. You’d like it Y&T. My wife got it for me for Christmas a couple of years ago. Great read. I’ll be posting my favourite quotes from that book, within the next week. Stay in touch.

  6. I am also a big fan of Buffett, my favorite characteristic is his impeccable track record for honesty. There was one time that the SEC tried to prosecute him because he did something soooooo honest that they were sure he must have been dodgy! He and Munger wanted to acquire Wesco because it was trading far below what they though it was worth. At the same time the board of Wesco wanted to use their stock to acquire another company that was trading far above what it was worth – using an undervalued stock to buy overvalued stock, not a good deal.

    Buffett couldn’t acquire enough shares to stop the deal so he convinced another major investor to vote against it. On news of the merger not going through Wesco stock dropped significantly. The next day Buffett went in and purchased large quantities of Wesco at the inflated pre-news price so that he wouldn’t be seen by the other investors to have capitalized in the drop in price that he was responsible for. The SEC however saw this as stock manipulation and misuse of his investors funds. In reality he did this because he saw no benifit in making a quick buck but saw great value in solidifying the favor of his fellow shareholders for the long term. If only more people would conduct themselves with thought to the long term effects of their actions thenthe world would be a much more prosperous place.

    However he is not a buy and hold investor, he is a value investor. This involves stock picking where he looks for companies that he hopes to never have to sell. Many of these companies he actually takes over and controls which is one reason why he is unlikely to have to sell them and also why it is very difficult for the average investor to emulate his strategy and results (better off buying BRK.B). Often the reality is quite the opposite in fact twice in his career he has sold nearly everything in his portfolio. On the first occasion he returned all the money to his investors saying that he had nowhere to put it because there was no value to be found. This was before he used Berkshire Hathaway as a holding company and it is now so big that he can’t be so nimble. He has said however that due to Berkshire’s size and the state of the world economy he does not expect to be able to return more than 10% annually moving forward.

    Buy and hold as it is promoted by the financial media involves buying a mutual or index fund and not selling it (no matter what) so that they can collect the most fees. Such an approach is likely to produce disappointing results without the addition of luck – http://etfhq.com/blog/2010/02/19/buy-and-hold/

    Cheers
    Derry

    • @Derry Brown- Yeah, I remember seeing that in the documentary. He was saying that the period during the Wesco scandal was such a dark period in his life. He said he felt he had a very heavy heart during that time. He’s such a good person- doesn’t look like there’s a mean bone in his body. Interesting- I didn’t know that he sold his portfolio twice. He is definitely a value investor, and DID buy out most of the companies that he invested in. Yeah, I don’t think any of us “regular joe” investors are able to emulate what Buffett did. We don’t have enough capital! Your blog post about the buy and hold strategy is very insightful and so credible. It makes sense. It could BE a marketing ploy to get us to buy mutual funds where they can make $$$ off of our MER’s!! The gall!!! (That really does make sense). I feel depressed and duped now! =(

  7. It is interesting that the governments in each country set up tax laws to encourage people into the investments that they choose.

    In New Zealand where I am from, almost no one is involved in the stock market, it is all about property because of the attractive tax laws.

    In America it is not just Wall St that wants us to buy and hold. (I know that you are from Canada don’t worry), but the American government wants the public to buy into the stock market and hold until retirement for many reasons only a few of which are in the best interests of the general public.

    Bottom line – We must do our own research to find the truth.

    “They must find it difficult…those who have taken authority as the truth, rather than truth as the authority.” Gerald Massey

  8. Interesting comments on “buy and hold”. My view is “buy and hold ” works if you do the research. Don’t be fooled by Buffett’s “aw shucks” mannerisms. He is probably the Lebron James of the company research world. When he researches companies no stone is left unturned, he tears the numbers apart as well as if not better than anyone, and he is a superb judge of people – an awesome, rare combination of talents. Throw in unrivaled patience.
    He’d probably be just as happy/satisfied over in a corner making $75,000/year with a stack of annual reports as he is as one of the world’s wealthiest men. It’s called being comfortable in one’s own skin.

  9. I’ve always been in awe of Buffett. I think that what makes him unique is that he is so down to earth, a true “millionaire next door.” I’ll have to check out that investment book. My husband started dabbling in investing earlier this year and has taken the approach of buy and hold. He has his “dream team” that he’s working on. Similar to the way Buffett buys stocks, buy what you believe in.

    • @Derry Brown- LOL thanks for acknowledging Canada (I come off as quite patriotic, don’t i?) anyway, that IS very interesting that New Zealand focuses on property instead of equities. Do you think it could be a time zone factor too (Wall street is 14 hours behind?).

      @DIY Investor- Warren Buffett= the Lebron James of investing- awesome. Yes, in the documentary, he said him and his partner were really good at investing, and they do it more as a hobby, rather than for personal financial benefit. Warren Buffett does have an aura about him that shows he is very comfortable in his own skin. I suppose he shows that amassing wealth isn’t life’s lessons, that working hard to be good at what you do, teaching your children about values, and having good relationships (him and his ex-wife are on really good terms) is what life is all about.

      @Little House- Warren Buffett is more like the Billionaire next door =) That’s great that your husband is interested! My boyfriend was interested, but lost some money, and then took a break from it.

  10. Little old NZ has its own Stock Market LOL. Actually four years ago the Government set up a program called Kiwi Saver that is a retirement savings scheme. A good portion of that money is invested in the stock market but most people don’t realize it. So times are changing but our perceptions are not.

    BTW you forgot to mention that one of the most awesome things about Warren is that his wife and girlfriend knew about each other and got on well. Now that is style!

  11. I’ll have to check out that documentary!

    I’m about 1/4 the way through reading “The Snowball”. It’s a great book, the real nitty gritty. It’s one of the better biographies that I’ve read!

  12. I think Warren Buffett is great. I enjoy his take on investing and the fact that he only really invests in companies that he understands. He is also now producing cartoons for kids to teach them how to invest! http://www.smckids.com/

    • @dyadigs- Wow, thanks! That is the coolest website EVER. If I was a kid I would love it- I hope they show those episodes on T.V. or something… the secret millionaires club- cute! Now I heart Warren Buffett even more. =)

  13. I too think Warren Buffett is a fascinating individual. We are not alone in these thoughts, thats for sure!

    Someone I once worked with told me that in her MBA program, she and a few others were selected to meet Buffett in Omaha for lunch. Apparently he took them to a cheap diner type of place, absolutely no frills whatsoever. Which, of course, fits with the perception of him. And it’s the mentality which has helped get him to where he is. Very cool.

    Apparently, he was also very gracious and showed interest in the students.

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