Early Life and Education
Buffett's business talent emerged in childhood, while his academic background laid a solid theoretical foundation for his later value investing system.
Birth and upbringing: Born on August 30, 1930, in Omaha, Nebraska, Warren Buffett's father, Howard Buffett, was a U.S. Congressman. From an early age, Buffett was fascinated by numbers and business; as a child, he delivered newspapers, sold chewing gum and Coca-Cola.
Early business ventures: At age 11, he bought his first stock (Cities Service Preferred), and at 14, he used his newspaper earnings to purchase a farm.
College education: In 1947, on his father's advice, he enrolled at the Wharton School of the University of Pennsylvania, but transferred two years later to the University of Nebraska–Lincoln, earning a Bachelor of Science in Business Administration at age 19.
Studying under Graham: After being rejected by Harvard Business School, Buffett entered Columbia Business School, which became the most important turning point of his life. There, he became a student of Benjamin Graham, the "father of value investing," and earned a Master of Science in Economics in 1951. Graham's book The Intelligent Investor has been called by Buffett "the best book about investing ever written."
Investment Career
Buffett's career is a history of "snowballing," from an early partnership to building the Berkshire empire.
The partnership period (1956–1969): After working for Graham for a few years, Buffett returned to Omaha and in 1956 founded Buffett Partnership, Ltd. Employing Graham's "cigar butt" strategy (buying stocks trading below their liquidation value), he achieved remarkable returns, with an annualized return exceeding 20% during the partnership's existence.
Taking control of Berkshire (1965): In 1962, Buffett began buying shares of a textile manufacturer called Berkshire Hathaway. By 1965, he had gained control of the company. He later admitted that buying the textile mill was his "most expensive mistake," but he used it as a platform to begin a transformation.
Transformation and expansion: He gradually divested the textile operations and transformed the company into an insurance and diversified investment conglomerate.
Insurance float: He acquired National Indemnity and GEICO (Government Employees Insurance Company), using the massive "float" from insurance operations to invest at low cost.
Classic acquisitions: Under his leadership with partner Charlie Munger, Berkshire wholly acquired BNSF Railway, See's Candies, Dairy Queen, and other operating businesses.
Stock investments: In the secondary market, he built long-term concentrated positions in companies with strong moats, such as Coca-Cola, American Express, and Apple.
Achievements: Under his stewardship, Berkshire's share price rose from single digits to hundreds of thousands of dollars per share (Class A), creating a compounding miracle in the annals of business.
Investment Philosophy
Buffett's philosophy is a fusion of Graham's "value" and Fisher's "growth," further evolved under Munger's influence.
Value investing: The core principle is "Buying a stock is buying a piece of a business." He seeks companies trading below their intrinsic value.
Circle of competence: He insists on investing only in businesses he understands, which is why he long avoided technology stocks.
Economic moat: He favors businesses with durable competitive advantages, such as brand monopolies (Coca-Cola), high switching costs (Apple's ecosystem), or low-cost advantages (GEICO).
Margin of safety: The purchase price must leave a sufficient buffer to weather future uncertainties.
Long-termism: His famous quote: "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes." He advocates harnessing the compounding effect over time.
From "cigar butts" to "crown jewels": Under Charlie Munger's influence, he shifted from "buying fair companies at wonderful prices" to "buying wonderful companies at fair prices."
Personal Life
Despite being one of the richest people in the world, Buffett is known for his extremely frugal and simple lifestyle.
Simple living: He still lives in the same Omaha house he bought in 1958 for $31,500. He has no chauffeur, has driven ordinary Cadillacs for years, and enjoys McDonald's breakfasts and Cherry Coke.
Marriage and family:
His first wife, Susan Thompson, married him in 1952 and they had three children: Susan, Howard, and Peter. Susan passed away in 2004.
His second wife, Astrid Menks, married him in 2006. She was a former waitress who had been his long-time companion before their marriage.
Philanthropy (The Giving Pledge): In 2006, Buffett pledged to donate the vast majority of his Berkshire shares (about 99%) to charity, primarily to the Bill & Melinda Gates Foundation and four foundations run by his children. In 2010, he and the Gateses launched the Giving Pledge, calling on the world's billionaires to give away at least half of their wealth during their lifetimes or upon death.
Hobbies: He is an avid bridge player (often partnering with Bill Gates) and enjoys playing the ukulele.
Books and Writings
Buffett has never written an autobiography or a traditional business book himself, but his annual Shareholder Letters are widely regarded as the "bible" of the investment world.
Key works (compiled):
The Essays of Warren Buffett: Lessons for Corporate America: Edited by Lawrence Cunningham, this book organizes Buffett's letters over the years by theme (corporate governance, finance and investing, mergers and acquisitions, etc.) and is the most authoritative collection for studying Buffett's thinking.
Shareholder letters: Since 1965, he has personally written a letter to shareholders each year, made freely available on Berkshire's website. These letters not only analyze company performance but also contain his deep insights on economics, management, and investing, delivered with humor and candor.
Recommended reading: He often recommends Graham's The Intelligent Investor and Security Analysis, as well as Fisher's Common Stocks and Uncommon Profits.
