Warren Buffett is the best investor in the world ... He started with $ 100 to become the third richest man in the world

Warren Buffett is the best investor in the world ... He started with $ 100 to become the third richest man in the world


Warren Buffett is the best investor in the world
Warren Buffett is the best investor in the world

Warren Buffett is considered the best investor in the world and CEO of Berkshire Hathaway, where he became part of it in the early sixties, and continued to develop it into one of the largest companies in the world.

According to Forbes, Warren Buffett is the second richest man in the world for 2017 after Bill Gates, with a fortune of $ 75.6 billion, and his fortune as of February 2018 amounted to $ 87.5 billion.
His company is one of the five highest profitable companies in the world. Buffett didn't get that wealth from one simple source, he did not inherit it, and he didn't even use any magic powers,Rather, he relied on investment in companies he deems worthy of investment, and he worked on developing them out of his belief in the possibility of achieving a lot of profits in the future.He has always emphasized that success in investing and generating wealth is not complicated and not always associated with risk and anyone can achieve the same.

But the most prominent in Buffett's career is he always owns cash in crises and this helped him a lot in adjusting prices if the market fell significantly from the prices that he had, and this is what distinguishes him from other big investors and speculators because he is famous for commitment in the financial markets.
He often stated that when he buys something without his value he buys as if he will sell after many years, and does not pay attention to anything else, and this idea succeeded with him strongly during the global crisis when the markets collapsed, and in that era you must have the cache at the time and the audacity to enter the middle of this Chaos.
Buffett was a prominent player in it despite the fact that he sometimes bought at high prices and then prices fell, and he was buying with every major decline, and after years the market rose again and erased all the losses of the global crisis, then he entered a new wave in which he investigates successive record highs every time.

The early beginnings of Warren Buffett's investment business

Warren was born in 1930 in the city of Ohama, in the United States of America. Buffett's father was a stockbroker.Warren worked in that market in the brokerage house where his father worked. Warren Buffett bought his first shares in Cities Services, and later sold them for a small profit, and learned from this the importance of investing in good companies.

Buffett's first partnership

Before working for Benjamin Graham, Warren worked in the field of investment management, as he was one of his most favorite businesses, but he stopped that business after a drop in the value of shares and was about to cause the loss of his clients ’money.
Warren then began to partner with his family and close friends. And for that partnership put distinct restrictions associated with it, for example, Buffett invested only $ 100 while the partnership capital was $ 11,1000, and he can increase his share in the partnership through the reinvested administrative fees.
Warren will receive half of the partnership’s profits, more than 4%, and will repay in favor of that partnership if he incurs a loss. Moreover, the partners should not have any contribution regarding the investments in the partnership.

By 1959, Warren opened a total of seven partnerships and his stake amounted to 9.5% or more than $ 1 million in the assets of that partnership. Three years later, Warren Buffett became a millionaire to merge all of his partnerships into one company.

Buy Berkshire Hathaway

In 1962 Warren saw an opportunity to invest in a New England textile company called Berkshire Hathaway and bought some of its shares. Warren began buying shares strongly after a dispute with the company's management to persuade her that the company needed a change in leadership.
Through his understanding of the importance of owning Insurance Companies - where customers pay the premiums today to obtain those payments after decades -Warren used Berkshire Hathaway as a holding company to buy the National Indemnity Company (the first insurance company to buy Warren) and used their large cash flow to fund more Acquisitions acquisitions.

Warren is a value investor, seeing that this company was low priced and he bought it, regardless of the fact that he was not an expert in the textile industry.Gradually, Buffett shifted Berkshire's focus away from its old traditional endeavors, using it as a holding company to invest in other companies.
Over the following decades, Warren purchased a variety of companies in various industries. Among the most famous Berkshire Hathaway subsidiaries are GEICO, Dairy Queen, Net Jets and Benjamin Moore * Co.

All of these are just a small fraction of all the Berkshire Hathaway holding the majority stake. In recent years, Buffett has worked as a fund and facilitator for major transactions. During the Great Recession, Warren invested and loaned money to companies facing financial disaster.Almost 10 years later, the effects of those transactions began to appear, with huge results. Below are some examples:

  • Loan led to Mars Inc. To a profit of 680 million dollars. 
  • American Express Co. AXP has nearly five times its size since Warren invested in it in 2008.
Recently, Warren partnered with 3G Capital to merge J.H. Heinz and Kraft Foods, and the creation of Kraft Heinz Food Company.This new company is the third largest food and beverage company in North America and the fifth largest in the world, with annual revenues of $ 28 billion.


Investment philosophy

Buffett's business investment philosophy is a mutation of the investment in value approach developed by his teacher, Benjamin Graham. Graham bought companies because they were cheap compared to their intrinsic value.
If he believed that as long as the market lends the company he buys with a value that is less than the company’s intrinsic value, he makes a meaningful investment decision when he purchases it.
He justified this by believing that the market would later realize that he had given the company a value that was less than its real value, which pushes it to correct this value regardless of the nature of the business the company does.

Here are a number of questions to be answered before arriving at a decision regarding the company’s purchase, according to Buffett’s author, "Pavitologi":

* Is the company located in a sector that has a good economic base, and not in a sector that witnesses price competition? 

* Does the company have a consumer monopoly or a loyal brand? 

* Can any company with a wealth of resources successfully compete with the company being thought of human

* Are the owners ’revenues in an upward direction with good and continuous profits? 

* The debt to assets ratio is low or is the income to debt ratio high? That means, can the company pay off its debts within years when revenues are below average?

* Does the company have high and continuous returns on invested capital?

* Does the company maintains revenues allocated for growth? 

* Does the company reinvest its revenues in good business opportunities? 

* Does the management has a good record of making profits from these investments?

Buffett also focuses on buying longing. He does not want to invest in businesses that are unable to understand their value.It is preferable to wait until the direction of the correction in the market or during the downward trends until he can buy at reasonable prices, especially since the downward trends in the stock markets provide opportunities for buying.
Buffett is also known to be conservative when speculation is rampant in the marketplace and to be the exact opposite when others are concerned and fearful for their money.
Buffett is also known to be conservative when speculation is rampant in the marketplace and to be the exact opposite when others are concerned and fearful for their money.

Some investment advice from Warren Buffett

  • Avoiding the risk of investing, in other words, avoiding investing when the market price increases or when it reaches its peak.
  • Focus on long-term investment, and avoid waiting for the stroke of luck, meaning you have to rely on the investment that returns from the profits the company makes after its development.
  • He used the right people to run your business, and Warren himself did not interfere with the management of his companies but rather entrusted them to specialized managers who made him huge profits.
  • Read on, as it opens up a lot of thought areas.
  • Work within the field you love, because it will motivate you to creativity that will definitely lead you to make profits.
  • Be fearful when others are greedy, and be greedy when others are afraid.

Finally, many observers believe that Warren Buffett is better than stock trading and holds several titles including Hakim Nebraska, but undoubtedly the title closest to him is the best investor in history.Of course, Buffett became famous for many deals in which he not only achieved high profits, but also contributed to amplifying his personal wealth and becoming among the 5 richest people in the world.



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