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- Herausgeber: GRIN Verlag
- Sprache: Englisch
Seminar paper from the year 2015 in the subject Business economics - General, , language: English, abstract: Warren Buffet, the architect and CEO of Berkshire Hathaway is one of the world’s most successful investors with unique investment principles and management culture. He is an American businessman, investor and philanthropist ranked the world’s richest man in 2008 with an estimated net worth of $62 billion. Over the past 37 years, Buffet has consistently grown Berkshire’s market value at an annual compound growth rate of over 25%, an almost impossible feat. Putting into perspective the consequences of such sustained compound growth rate for long periods, an investment of $10,000 with the company when Buffet took charge would translate more than $40 million today. Buffet’s unique principle and approach of value investing where he indentifies undervalued companies with good potential for future growth by analyzing their financial statements, makes him perhaps the most successful stock market investor of the past three decades.
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Veröffentlichungsjahr: 2015
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Table of Contents
Background
Personal Profile
An Outstanding Investor
Growth and Expansion
Entrepreneurial Methodology
Buffet’s Approach to Investment
Company Valuation: Six Key Principles
Learning Outcomes
Conclusion
References
Background
Warren Buffet, the architect and CEO of Berkshire Hathaway is one of the world’s most successful investors with unique investment principles and management culture. He is an American businessman, investor and philanthropist ranked the world’s richest man in 2008 with an estimated net worth of $62 billion. Over the past 37 years, Buffet has consistently grown Berkshire’s market value at an annual compound growth rate of over 25%, an almost impossible feat. Putting into perspective the consequences of such sustained compound growth rate for long periods, an investment of $10,000 with the company when Buffet took charge would translate more than $40 million today. Buffet’s unique principle and approach of value investing where he indentifies undervalued companies with good potential for future growth by analyzing their financial statements, makes him perhaps the most successful stock market investor of the past three decades.
Personal Profile
Warren Buffet was born on August 30, 1930 in Omaha, as the second of three children to his father, Howard, who was a stockbroker turned congressman. Buffet showed aptitude for numbers, money, and investment at an early age. He amazingly filed his tax return at the age of 13 deducting $35 for his bike as a business expense. His interest in the Stock market was also from an early age. He purchased his first stock; Cities Services preferred shares, at the age of 11 for $38 but later sold them for $40 not speculating that the price would soon rocket to $200 within a few years. This was an invaluable lesson, as he got to understand the importance of investing in good companies for the long term (Hagstrom, 2000). Buffet graduated from Woodrow Wilson high School in 1947 and attended the Wharton Business School at the University of Pennsylvania. He returned home and transferred to the University of Nebraska-Lincoln after his father was defeated in the 1948 Congressional race and managed to graduate in three years while working full time. While a student, he read The Intelligent Investor by Benjamin Graham, a book that had such a profound influence in his outlook that he went to study at the Columbia Graduate Business School where Graham was tutoring. Being the only student who scored an A+ in Graham’s security analysis class, he was offered a job to work for Graham-Newman upon graduation but instead chose to work for his father’s brokerage firm as a sales representative (Hagstrom, 2005). While working as a salesman, he pushed for investment in GEICO stock after noticing that Graham was a director in the company. In 1954, he was recalled by Benjamin Graham and offered a job at his partnership with a starting annual salary of $12,000 (Hagstrom, 2000).
An Outstanding Investor
