Warren Buffett

Warren Edward Buffett never started a company in the usual sense. He bought one — a failing textile mill — and spent sixty years using it to buy other businesses, until it was worth more than a trillion dollars. Along the way he became the most famous investor in history and promised almost all of his fortune to charity.

Omaha, 1930

He was born on 30 August 1930 in Omaha, Nebraska. His father, Howard Buffett, was a stockbroker who later served four terms in the US Congress. His mother was Leila Stahl Buffett.

He was fascinated by money and numbers from early childhood. He sold chewing gum and Coca-Cola door to door, delivered newspapers and, with a friend, put pinball machines in barber shops. At eleven he bought his first shares: three shares of Cities Service preferred stock, for himself and his sister. They fell, then rose, and he sold them for a small profit — shortly before they rose much further. He later said it taught him patience.

By the time he finished school he had saved several thousand dollars, a large sum for a teenager at the time.

Benjamin Graham

He studied at the Wharton School of the University of Pennsylvania for two years, then transferred to the University of Nebraska and graduated in 1950. Harvard Business School rejected him.

That rejection turned out to be lucky. He had read The Intelligent Investor by Benjamin Graham, and learned that Graham taught at Columbia Business School in New York. He applied, was accepted, and took a master’s degree in economics in 1951.

Graham’s idea was simple: a share is a piece of a real business, and an investor should buy it only when its price is well below what the business is worth, leaving a “margin of safety”. Buffett offered to work for Graham’s firm for nothing. Graham turned him down. He was eventually hired in 1954 and worked there until Graham retired in 1956.

The Partnership

Back in Omaha, in 1956, he started the Buffett Partnership with about $105,000 from family and friends. It was spectacularly successful. Over thirteen years it beat the stock market by a wide margin every year, without a single losing year.

In 1958 he bought a house in Omaha for $31,500. He has lived in it ever since.

In 1969, believing the stock market had become too expensive, he closed the partnership and returned the money to his investors. Many kept their holdings in one of the companies it owned: a textile maker called Berkshire Hathaway.

The Mill

Berkshire Hathaway was an old textile company in New Bedford, Massachusetts, losing ground to cheaper competitors. Buffett began buying its shares in 1962 because they were cheap compared with the company’s assets — a classic Graham investment.

The story he has told is that the company’s chief executive offered to buy his shares at one price, then sent a formal offer at a slightly lower one. Angry, Buffett bought more shares instead, took control of the company in 1965, and fired him. He later called it the worst investment decision of his life: he had tied his fortune to a dying industry out of pride.

He did not close Berkshire. He kept the company and its name and turned it into a holding company. The textile mills struggled on until 1985, when they were finally shut down. By then Berkshire had become something else entirely.

Insurance and Float

In 1967 Berkshire bought National Indemnity, an Omaha insurance company. This was the real turning point. Insurance companies collect premiums up front and pay claims later. In between, they hold the money — what Buffett calls “float” — and can invest it.

Float became Berkshire’s engine: cheap money to invest in shares and whole companies. Berkshire later bought all of the car insurer GEICO in 1996 and built one of the largest reinsurance businesses in the world.

Charlie Munger

In 1959 he met Charlie Munger, a lawyer from Omaha living in Los Angeles. Munger became his closest friend, his business partner and, from 1978, vice-chairman of Berkshire.

Munger changed his thinking. Graham had taught him to buy mediocre companies at bargain prices. Munger argued that it was better to buy wonderful businesses at fair prices and hold them for a very long time. The 1972 purchase of See’s Candies, a Californian chocolate maker, for $25 million was the first great example. It kept raising its prices, needed little new investment, and sent billions of dollars of profit to Berkshire over the following decades.

That thinking led to Berkshire’s huge investments in Coca-Cola from 1988, American Express and, much later, Apple, which became its largest holding. It also led to whole-company purchases, most notably the railway BNSF in 2010. Munger died in November 2023, aged ninety-nine.

The Oracle of Omaha

His annual letters to Berkshire shareholders, written in plain, funny English, became required reading for investors. The company’s annual meeting in Omaha grew into a gathering of tens of thousands of people.

He was not infallible. He avoided technology stocks for decades, bought an airline he regretted, and made large mistakes, including buying the shoe company Dexter with Berkshire shares that later became worth billions. He admitted them in his letters. In 1991 he briefly became chairman of the investment bank Salomon Brothers to save it after a trading scandal.

Giving It Away

In 2006 he announced that he would give away most of his fortune, most of it in annual gifts of Berkshire shares to the Gates Foundation, and the rest to foundations run by his children. In 2010 he and Bill Gates launched the Giving Pledge. He has said that more than 99 per cent of his wealth will go to charity.

He married Susan Thompson in 1952. They had three children, Susie, Howard and Peter. They separated in the 1970s but stayed married until her death in 2004. In 2006 he married Astrid Menks, his companion for many years.

The Handover

At Berkshire’s annual meeting in May 2025, aged ninety-four, he announced that he would step down as chief executive at the end of the year. Greg Abel, who ran Berkshire’s non-insurance businesses, became chief executive on 1 January 2026.

On 18 September 2026, shortly after his ninety-sixth birthday, Buffett stepped down as chairman as well, becoming chairman emeritus and remaining on the board. His son Howard G. Buffett became chairman. “Father Time always wins,” he wrote.

How Berkshire Works

Berkshire is unusual in how little it does from the centre. Its headquarters in Omaha has long had only a few dozen staff. The businesses it owns — insurers, a railway, energy companies, manufacturers, retailers — are run by their own managers with very little interference, and Buffett’s main jobs were to choose those managers and to decide where to invest the cash the businesses produced.

It has paid a cash dividend only once, in 1967, preferring to reinvest its profits. When sellers approached Buffett, he promised them that Berkshire would keep their company and its people, which made Berkshire an attractive buyer for family firms that did not want to be broken up. That reputation became one of its biggest advantages.

His own habits never changed much. He famously ate at McDonald’s, drank Cherry Coke and read for most of the day, and he said that the most important investment anyone can make is in themselves.

The measure of him is patience. He bought businesses he understood, held them for decades and let the returns compound. It sounds simple. Almost nobody else managed to do it for sixty years.

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