Born - August 30, 1930 Omaha, Nebraska, USA / Lives - United States of America – Omaha
Buffett's father, Howard was a stockbroker and also became a member of congress.
Warren Buffett showed early signs of being entrepreneurial through being involved in various business dealings as a child, including purchasing bottles of cola cheaply and selling them for a profit. He also made his first investment in the stock market when he was just 11 years old.
Buffett began studying at the Wharton School of Finance at the University of Pennsylvania, but transferred to the University of Nebraska where he graduated. He then went on to the Columbia University to do a Masters in economics.
Is the company in an industry with good economics? That is, is it not in an industry competing on price?
Does the company have a consumer monopoly or brand name that commands loyalty?
Can anyone with an abundance of resources compete successfully with the company?
Are the earnings on an upward trend with good and consistent profit margins?
Is the debt-to-equity ratio low, or is the earnings-to-debt ratio high? Can the company repay debt even in years when earnings are lower than average?
Does the company have high and consistent returns on invested capital?
Does the company retain earnings for growth?
Does the business have high maintenance cost of operations, high capital expenditure or investment cash outflow? (If so, that’s not good.)
Does the company reinvest earnings in good business opportunities? Does management have a good track record of profiting from these investments?
Is the company free to adjust prices for inflation?
In short, he makes companies jump through a lot of hoops before he considers putting them in his portfolio.
Warren Buffett’s Investment Strategy & The Economic Downturn
First, he knows that nobody can accurately or consistently predict something as big, diverse and dynamic as the global economy.
Secondly, he knows that even if you somehow knew what was going to happen in the economy, you still wouldn’t necessarily know what is about to happen in the stock market. Perversely, stocks sometimes fall during good times. They often rally during bad times.
Thirdly, Buffett knows that the stock market is a discounting mechanism. It takes the news and reflects it into stock prices immediately. Who in their right mind would sell their stocks today because he realizes the economy is slowing down? We’ve known that for months now.
He still lives in the same small 3-bedroom house in mid-town Omaha , that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.
Don't buy more than what you "really need" and encourage your children to do and think the same
His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.
Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.