The Story of The God of Investing | Part 1- Businessman at young age | Warren Buffett

" Be fearful when others are greedy and be greedy when everyone is fearful. " - Warren Buffett

"Donate my 99% of wealth to charity" stated by Warren Buffett who believes that the man should be worthy to create his own wealth and so he leaved much less behind for his children. If you know a little bit about stock market then you must know about Warren Buffett whom the stock brokers from all over the world have been following. And now we are going to figure out how this man has became the biggest investor in the world and still earning great money.

The Story begins... 

The story started with the big economic depression of 1930 when he was born. His father was a stock broker at a stock broking firm and due the economic depression he had lost his job. Later started his own stock broking firm.

Let's start with the thing that matters the most, how did he start at early age?

The Productive start in business at early age

Warren had started reading business books at his early age and was greatly inspired from the book One thousand ways to make $1000. He was influenced from an idea from the book and decided to implement it. Following the idea he bought an old pin ball machine and kept near barber's shop. People in waiting had started playing games. Warren earned good money from this business. Despite of spending them he invest it to buy more machines and grew up the business. After making the business successful, he sold it for $1200. Also did some of other business like selling newspaper, magazines, door to door coca cola and chewing gum. He filed his first taxation at the age of 14 and at the age of 18 he bought 40 acres land and gave it on rent to earn more money.

Mentorship by Prof. Benjamin Graham.

After the rejection from Harvard University Warren decided to take admission in Columbia University where he could get guidance of professor Benjamin Graham whom he had admired the most. He had read his books. At the Columbia University he had learnt valuable lessons of Investing from Prof. Benjamin Graham and started following his philosophy of value investing. Warren Buffett said Graham's book 'The Intelligent Investor' is the best book to learn investing and still he agrees that it is the best book to learn investing.

Benjamin Graham - image source

What is the philosophy of value investing?

Prof. Benjamin Graham's philosophy of value investing says that the investor should study the financial statements of the company and find the real value of stocks and should buy the stocks when they are undervalued.

Stock Market journey 💰

Following the philosophy of real value investing he started buying stocks after doing research and reading financial statements of companies. He bought the stocks of Berkshire Hathaway in 1962 which was in bad condition and the stocks were undervalued. He continued buying more stocks of this company. The company wanted to buyback the shares from Warren and offered him the value of $11.5 per share. He agreed at this value but when there was time to deal, the company presented the value of $11.375 to him. Warren found that the company had tried to cheat him. He refused to sell stocks. He was annoyed by the wrong people from the management of the company. Angry Warren continued the buying of stocks of Berkshire Hathaway until he became the owner. After getting all authorities in his hands he fired all bad managements. But then he realised that he had flown in emotions and bought a loss making company. He found himself in rut.

What could an intelligent investor do next ? 

What Warren Buffett did next ? 

What would you do next ?  

Find out more other investment philosophies and rest of the journey of Warren Buffett in our next blog. Will be published soon. Subscribe Mindly Sapiens to get email notification about our next blog.

Coming next...

• The philosophy of  Philip Fisher
• Warren's own philosophy
• Rules to earn from investing
• Investing traits of Warren Buffett
• Future plans

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