Warren E. Buffett
Warren E. Buffett is a legendary investor whose folksy image and crafty acquisition strategies have given Berkshire Hathaway a unique cachet among the nation’s largest companies.
While Berkshire is best known for its insurance operations, its holdings include such varied interests as Benjamin Moore paints, See’s Candies, Dairy Queen and NetJets. Its stock is not priced for the fainthearted — in excess of $100,000 a share — and those who hold it have become devoted followers of its chief. His management style is noted for a homespun annual letter to shareholders and a yearly investor gathering that some came to refer to as Buffettpalooza.
In the wreckage left by the housing bust, Mr. Buffett emerged in 2008 as the banker of choice to embattled blue-chip companies during the credit crisis that ensued. In September he made what may be the boldest play of his career, investing $5 billion in Goldman Sachs in the midst of a Wall Street panic.
And eight days later, he announced that he would invest $3 billion in General Electric. The industrial giant had been potentially vulnerable to the credit squeeze because of GE Capital, whose global portfolio spans aircraft leasing, commercial real estate, credit cards and home mortgages.
For both investments, Mr. Buffett drove a hard bargain and extracted favorable terms. His investments, analysts say, are based on the assumption that the companies would come through the financial turmoil in good shape.
In 1990, a profile in The New York Times said of Mr. Buffett:
“His discipline as an investor, his devotion to a rational, coherent strategy, are legendary. As a shrewd purchaser of stock and, on occasion, whole companies, he has compiled a record of unparalleled success. Yet in many ways, he is very different from the popular image of the financial titan.“With his off-the-rack suits and unruly, thinning hair, Buffett resembles nothing so much as a mildly eccentric clerk in a discount shoe store. He lives in a middle-class Omaha neighborhood in the house that he bought in 1958 for $31,500. He collects model trains. In fact, he has sometimes been portrayed as the quintessential cornfed, ‘aw-shucks’ hick. Nothing could be further from the truth.”
Mr. Buffett’s investment philosophy owes much to Benjamin Graham, regarded as the father of modern securities analysis, who saw the stock market as a highly irrational place where a disciplined, rational investor could thrive. Mr. Buffett looks for what he has called “sleeping beauties” — stocks selling substantially below book value. Notably, he has made large stock purchases in companies threatened by takeover, receiving financial concessions in exchange.
As Mr. Buffett’s wealth has soared, he has become perhaps the most widely admired member of the financial community.
He has won plaudits for what he has done with his wealth — donating the bulk of his fortune, about $37 billion, and not to a foundation with his name on it, but to the Bill and Melinda Gates Foundation, an arrangement he saw as more efficient. He has also won praise for what he has not done — notably, for avoiding both the tech bubble of the late 1990s and the housing/mortgage bubble that followed. (Oct. 9, 2008)